National | Employment

Auckland Action Against Poverty calls for end to benefit sanctions

In May the Ministry of Social Development removed sanctions for solo mothers who refused to name their children’s fathers.

But many other sanctions remain on drug users, people who don’t look for work, or those who miss appointments with mandatory service contractors and could have their benefits reduced and eventually terminated.

Auckland Action Against Poverty (AAAP) want these sanctions removed. It believes the sanctions don’t achieve what they are set out to do, and that they make bad situations worse.

Removing sanctions

Brooke Fiafia from AAAP - Photo / File

Brooke Fiafia, speaking for the anti-poverty group, says the new job subsidy and support payments are a good model for the future.

“AAAP believes all sanctions should be removed from the welfare system. They create further hardship and they don’t work as intended.”

Fiafia says AAAP sees drug use as a health issue, and so reducing benefits for drug users is unnecessary. She says AAAP want increased funding for health and addiction services instead.

“For example, people in paid employment, or even people receiving superannuation - they’re not routinely drug tested, and punished for what we say is a health issue,” Fiafia says.

Yet to stop drug testing

Prime Minister Jacinda Ardern - Photo / File

AAAP believes sanctions on drug users on welfare are unfair and discriminatory. Furthermore, it says the cost of drug testing is high, and it wants the tests to stop.

"We don't believe people should be criminalised for trying to survive in a system that is extremely hard for people," Fiafia says.

She recalled that, when Jacinda Ardern was in opposition, she opposed drug testing for beneficiaries. But, after three years as prime minister, she has yet to change the laws that make these sanctions mandatory.

MSD responds

Ministry of Social Development client delivery general manager Kay Read explains the rationale for drug testing.

"We work closely with our clients to support them into employment," Read says.

"In some cases where employees are required to be drug-free to take up the job, they are required to take drug tests at the request and cost of a prospective employer, or contract service provider."

Read says if beneficiaries fail the drug test, they are given the opportunity to be retested within five days. If they fail for a second time, they are required to pass another drug test within 25 working days.

She says reducing or stopping someone's benefit due to failing a drug test is a 'last resort' measure when everything else has failed.

"People who have been identified as having a drug dependency will not be sanctioned under this policy and will receive support to help them stop engaging in drug use," Read says.

The WINZ website says pre-employment drug tests are common in industries such as fishing, horticulture, transport and forestry.

73 beneficiaries fail drug tests

Data provided by Read show the number of drug test sanctions has both risen and declined in the past six years.

She says in the 2019/2020 financial year MSD referred 37,066 clients to drug testable work positions. Only 73 of those beneficiaries failed their drug tests.

Out of those 73, only 44 drug-related sanctions were issued. This is the lowest since 2014.

The highest was the 2017/2018 financial year, when 112 drug test sanctions were issued. The sanctions are counted as opposed to beneficiaries because in some cases, multiple sanctions are issued against the same person.

There are three types of sanctions: graduated (a percentage reduction in benefit amount), suspended and cancelled. Sanctions can be withdrawn if a person then complies with the criteria or successfully appeals the decision.

Two-tier welfare system

Susan St John expresses her concerns - Video / Tapatahi

Fiafia compared the way businesses were treated when applying for wage subsidies to the way welfare applicants are treated.

She noted businesses could have access to hundreds of thousands of dollars with little if any scrutiny. Despite some of those businesses defrauding the system, Fiafia says welfare applicants are treated with far more suspicion.

"With the income relief payment, they used a high-trust model," she says.

"This is a very different model from what they use on people who have been in the system for a long time."

Associate Professor Susan St John acknowledges the government needed to act fast to stop the economy and financial system from falling over.

But she wonders what will happen, once the wage subsidies stop.

"The danger might be we end up developing something which is 'two-tier', rather than fixing the problems already in the welfare system," St John says.

Corporate vs individual welfare

Te Ātiawa and Ngāti Tama economist Matthew Roskruge doesn't see a two-tier system. He sees two different approaches, to fix two different problems.

"I think it is a difficult comparison to make between a welfare system and a fixed-term business support policy," Roskruge says.

But he acknowledges that beneficiaries are being treated differently to a worker whose life has been upset by Covid-19. There's definitely a gap between how the rich, poor, and working class are treated.

"We see that story play out in justice, health and education systems as examples," Roskruge says.

Instead of comparing how beneficiaries and displaced workers have been treated, he asks a poignant question.

"If we had a good enough welfare system, would we have needed the wage subsidy?"