Hard News by Russell Brown

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Hard News: On benefit fraud

103 Responses

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  • Pete Sime,

    In the spirit of openness, I didn't buy a new PC every year with my course-related costs student loan claim.

    Dunedin • Since Apr 2008 • 171 posts Report Reply

  • Tom Semmens,

    I never had a cash bar job at the cossie club when I was on the dole for a while in the early 1990s either.

    Sevilla, Espana • Since Nov 2006 • 2217 posts Report Reply

  • Scott A,

    Or not telling Work and Income you've found work until you get paid, because otherwise they cut your benefit off immediately leaving you with no money to eat/ pay rent / get to your new job until the first payday occurs.

    The wilds of Kingston, We… • Since May 2009 • 133 posts Report Reply

  • Shane Le Brun,

    I wish I was like my fellow former army folk going to student life, I put my golden handshake into kiwisaver so I didn't have to admit to having a cash asset, my peers however put it into shares etc and made a hefty return while claiming student bennies saying they had no cash assets.

    My true regret was not having the balls to go all in on Bitcoin in 2011 when I left my uniform behind, I had 40k to play with.......

    Since Mar 2015 • 47 posts Report Reply

  • nzlemming,

    The usual suspects are really nasty this time because she's not only a politician, she's female and Maori. Ugh.

    Waikanae • Since Nov 2006 • 2935 posts Report Reply

  • weka,

    One of the issues here is that additional income for long term beneficiaries can be assessed yearly. At the end of the year they look at earnings, divide by 52 and take that off your benefit for the coming year. Relatively simple, although it has some issues too.

    With benefits like the dole, you're not meant to be on them for long, so they assess weekly. This is crazy making for people with variable income. I hear stories from people who work weekends but can't technically report the wages in the timeframe that WINZ insist. They get into these crazy levels of accounting for income that then gets abated. Needless to say, I know people that just figure out what their average income rate is, declare that instead, and hope that if they get investigated they won't end up owning much. Technically that's fraud, but it's also sanctioned by WINZ staff who also think the system is daft and who themselves don't have enough time to administer it.

    Since Dec 2014 • 17 posts Report Reply

  • Emma Hart,

    Yeah, there was a time in the early nineties when my partner, who also had a student loan, explained to his W&I guy that, if he worked another hour a week in his part-time job, he would lose money: his real tax rate would pass 100%. The guy said, that can't be right, did the maths there at his desk, discovered it was right, and was furious.

    How do they not know? How do they not already know?

    Benefit levels were quite deliberately set below subsistence level. Someone did something immoral, and it wasn't Turei.

    Christchurch • Since Nov 2006 • 4651 posts Report Reply

  • Russell Brown, in reply to Emma Hart,

    How do they not know? How do they not already know?

    Isn’t that strange?

    I confess, I did take some pleasure in walking past Income Support every month to sell records at Real Groovy. I’d done a huge blag with the publicists before leaving London and the good money for all those white-label pressings and promos really helped us keep going.

    Auckland • Since Nov 2006 • 22843 posts Report Reply

  • Rob Stowell,

    I did a bit of studying while I was supposed to be looking for work. It paid off - been paying tax more-or-less ever since. But I hate that back then, the system seemed relatively benign, while now WINZ feels like weaponised war on the poor.

    Whakaraupo • Since Nov 2006 • 2110 posts Report Reply

  • Katharine Moody,

    I don’t have any sweeping moral proclaimation to make about fiddling the system. In principle, I don’t like it.

    Someone said on another blog that fiddling the tax/welfare system is a national pastime. The way I look at it – they are one and the same system – and everyone is up to it, and the wealthier you are the more you fiddle.

    Which is why I favour a land value tax, GST and a UBI as the basis of a tax/welfare system – such a package would allow us to all stop fiddling.

    And what a better society we would be for it.

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • weka, in reply to Emma Hart,

    How do they not know? How do they not already know?

    I'd love to know when that system was designed. Does it predate the Lange government?

    I'm think that benefit abatement was seen as different than tax, and it took a long time for anyone to start looking at the whole. You were meant to be on a benefit for a short time, then get off and into full time work. That sounds like 80s rhetoric to me, no longer matched with work reality by the 90s.

    Since Dec 2014 • 17 posts Report Reply

  • Katharine Moody, in reply to Emma Hart,

    How do they not know? How do they not already know?

    I didn't know until I read the Big Kahuna by Guthrie and Morgan. I was appalled.

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • oga,

    Groaned when I saw the video on Stuff. Interpreter is completely obscured by the podium. What's the point of having an interpreter when nobody except those actually in the room can see them speaking?

    Auckland • Since Nov 2006 • 47 posts Report Reply

  • Helga,

    I was standing exhaustedly ironing one day when I was on the DPB and on the radio was Parliament, and there was my PM Rob Muldoon declaring that women on the DPB who took money under the table were worse than tax evaders.
    These were the days when my neighbours were encouraged to snitch if men stayed too many nights with me, and when mortgage interest rates were capped, but not mine because I'd owned a house with my husband and couldn't get an institutional loan - mine was 19%.
    I didn't take Muldoon's assessment of me and my kind - I knew I wasn't trash as he implied - but it was mighty memorable.

    New Zealand • Since May 2012 • 18 posts Report Reply

  • James Littlewood*,

    If you had an unemployment benefit, and decided to apply zero abatements for additional income, would that not be like a baby step towards UBI?

    Meanwhile students are positively encouraged to work on a benefit granted them specifically to relieve them of the need to work.

    Auckland • Since Mar 2008 • 410 posts Report Reply

  • andin,

    usual suspects on the right have leapt on it,

    That moral high horse really is getting to be a tired old nag.
    The poor thing needs to be put out to pasture, but the bandits who like riding it will still be trying too make moral capital off its ghost, as they send is corpse to the glue factory

    raglan • Since Mar 2007 • 1890 posts Report Reply

  • Katharine Moody, in reply to James Littlewood*,

    If you had an unemployment benefit, and decided to apply zero abatements for additional income, would that not be like a baby step towards UBI?

    Yes, but the beauty of a UBI is that it is universal - just like super - no means testing whatsoever, hence no abatement regime. Here's TOP's take on the Green's proposal;


    Wellington • Since Sep 2014 • 798 posts Report Reply

  • weka, in reply to Katharine Moody,

    Gareth Morgan's UBI proposal would make the lives of many vulnerable people worse because it has no plan for those people currently dependent on supplementary benefits. Anyone who can't work would be forced to live on less than they get now (most beneficiaries are dependent on supplementary benefits). So that's people with disabilities and solo parents at least. No Disability Allowance, no hardship grant, no Accommodation Supplement, no special needs grants. Any UBI intended to mitigate poverty (as opposed to being an economic tool for managing changing patterns of unemployment) needs to be designed with those people in mind.

    Yes, a UBI can be universal. But TOP's isn't a Universal Basic Income, it's an Unconditional Basic Income, and their current policy is aimed at a limited section of society. You can achieve similar results with a properly managed welfare system that addresses all people in poverty, not just the ones that Morgan deems deserving.

    (in case it's not clear, Morgan's Big Kahuna UBI is different from TOP's, although Morgan claims the TOP one is based on the Big Kahuna. I've not seen an explanation for the difference).

    Since Dec 2014 • 17 posts Report Reply

  • Alice Ronald, in reply to Pete Sime,

    In the spirit of openness, I didn't buy a new PC every year with my course-related costs student loan claim.

    I didn't buy all those brand new textbooks that I got quotes for from the Uni book shop either.

    Christchurch • Since May 2011 • 63 posts Report Reply

  • Hilary Stace,

    I heard recently that about half of all beneficiaries are paying back loans to Work and Income. So they are getting even less that they should be. To survive I suspect there is quite a bit of the black economy going on.

    On the other hand it is actually really hard to be totally honest with W and I. If you earn a little here and there and try to declare it each time they make it really really hard.

    Wgtn • Since Jun 2008 • 3225 posts Report Reply

  • steven crawford, in reply to weka,

    Low-income families with children (under 17) – an additional $72 pw ($3,744 pa) instead of in-work tax credit, no hours test required. Of course they remain eligible for the other current welfare payments (unemployment, disability, sole parent, illness etc).

    And the accomodation suppliment is possibly what the Green Party MP was telling porkies for, and might have given it to the landlord anyway.

    Something I like about the TOPs universal income proposal is that it’s intended to stimulate citizen responsibility. That’s not the same as patriotism, it’s more the sence of value derived from being part of the unpaid workforce. The Tops party has talked about the economic value of citizen responsiblity. Which is not the same as being a tax payer.

    Atlantis • Since Nov 2006 • 4442 posts Report Reply

  • Katharine Moody, in reply to weka,

    The Big Kahuna UBI was a real UBI (i.e., universal) - the TOP one is not (i.e., it's targeted as you say) and all other welfare benefits (outside that targeted group) remain unchanged, as I understand it (aside from super, as that would be means tested).

    In other words, it's a seriously cut down version of the Big Kahuna - reason being that they couldn't introduce a universal one until they understood better what the tax switch to their capital tax (with a corresponding lowering of the income tax rate) would raise.

    Put simply - they didn't go for the Big Kahuna - instead it's a kind of hybrid from what the book proposed.

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • weka, in reply to Katharine Moody,

    yes, that's my understanding. Also it's on top of any benefits, whereas TBK would replace them, which is a massive (unexplained) difference.

    The Big Kahuna would make things worse for many people, because it scraps all welfare and replaces it with the equivalent of the dole. If you need topups, you're out of luck. Very few people can live on the dole rate.

    Mostly I'm pointing out that UBIs aren't inherently good. TBK contains some useful starting ideas, but we shouldn't be looking to it as an exemplar for NZ (likewise TOP's policy).

    Since Dec 2014 • 17 posts Report Reply

  • Katharine Moody, in reply to weka,

    Yes, I know what you mean about the Big Kahuna as proposed in the book delivered a UBI at something around the equivalent of the unemployment benefit to every adult. For those paying that amount (or more) in tax, they got that amount tax free.

    The amount might have needed adjustment or there might have been the need for supplementary benefits based on certain circumstances, but then what it did do was free people up to make their own life decisions. And in this day and age of growing casual/part time and insecure employment, I'm not sure there are many other policy answers to a UBI.

    I read somewhere that within the OECD, we rank as having one of the lowest levels of elder poverty, and to me that speaks volumes about the upside of universality.

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • Paul Campbell,

    I think the big upside to universality is that because it applies to everyone the rich and powerful are invested, they've been paying in all their lives too

    Dunedin • Since Nov 2006 • 2622 posts Report Reply

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