Sunday 10 September 2017

A Policy A Day: Relationship Testing for Benefits

In the lead-up to the election, we are examining a policy a day. We're exploring a variety of policy areas, explaining the background and analysing some of the policy options, with a mixture of technocracy and values-based approaches. Inevitably, some opinion will make its way in and we make no apology for that - after all, we're voters too. A list of all the articles is available hereEnjoy!

Today's post is written by Charlotte Austin

Last year, I wrote a dissertation on social welfare fraud for the honours component of my law degree. When I first talked to people about it, quite often the response I got was one of mild bemusement. Why was I spending time researching social welfare, when I could be spending my time researching more exciting or worthwhile things? [By which I think people usually meant things that would lead to a career where I would earn more money]. It seemed the level of interest in talking about social welfare was pretty low. Now, Metiria Turei has changed that. All of a sudden, in this election, everyone cares about welfare fraud, and by extension, welfare itself. Everyone has an opinion about whether Metiria is a hero or a villain. Social welfare suddenly matters to a much broader portion of New Zealanders than it did just some short weeks ago.

I don’t want to talk about Metiria’s story specifically. I don’t even want to talk about welfare fraud here. What I do want to do is to look at an element of the Green’s welfare policy that was being announced when Metiria decided to share her story, because I think some of the policy detail got lost in the subsequent media frenzy. Whatever your thoughts about her actions, let’s take the sudden interest in social welfare and use that productively and actually look at one of the things the Greens are proposing to do – change the “relationship in the nature of marriage” (RINM) test for benefit entitlement eligibility.

The proposed policy
The Green Party are proposing to scrap the RINM test, and instead, bring relationship testing in line with other areas of law. Instead of a subjective, confusing, and ultimately harmful test, the Greens are suggesting that a single parent receiving Sole Parent Support (SPS) would be entitled to remain on the SPS until they have been in a de-facto relationship for three years. This would be consistent with how de-facto relationships are treated under the Property (Relationships) Act 1976. I’ll explain why this is important soon.

Wait, what is the relationship in the nature of marriage test?
Well, first of all, it’s probably worth giving a broad overview of how benefit entitlements work for those who have been fortunate enough not to have experienced the system themselves. Benefit entitlement is governed by the Social Security Act 1964. It’s a very messy Act, thanks to 50+ years of amendments, and navigating it can be quite difficult. Essentially, when it comes to determining someone’s benefit entitlement or the rate at which the benefit will be paid, the “conjugal status” of the applicant needs to be determined. Section 63 of the Act provides the Chief Executive of the Ministry of Social Development (MSD) with the power to treat an applicant who is legally married or in a civil union, but living apart from their partner, as being single. Additionally and more relevantly for this policy, the Chief Executive can treat two people as being married, even if they are not in a legal marriage or civil union, as long as they have entered into “a relationship in the nature of marriage”. Obviously, this may seem rather broad and subjective, but as a result of this determination, the applicant’s benefit entitlement or the rate at which the benefit is paid can be altered. The likely outcome is that if someone is determined to be in a RINM, then their benefit will probably at the very least be reduced, if not cut entirely (depending on the financial status of their partner).

“Relationship in the nature of marriage” is not defined in the Social Security Act. This has meant that the Courts have been tasked with defining the parameters of the RINM test, and as a result, the test for determining whether a relationship meets the RINM standard has undergone some change over time. Prior to 1997, the determination was made in accordance with a “checklist” of factors (see Excell v Department of Social Welfare and Thompson v Department of Social Welfare), however, since 1997 the case of Ruka v Department of Social Welfare has been the leading case. The Court of Appeal in Ruka removed the checklist of factors to be considered, instead preferring a two-stage enquiry: emotional commitment and financial interdependence.

It is worth quoting directly from Ruka to show the criteria for a RINM, at least for the purposes of the Social Security Act:

“In our view a relationship in the nature of marriage for the purpose of the Social Security Act is one in which an essential element is that there is an acceptance by one partner that (to take the stereotypical role) he will support the other partner and any child or children of the relationship if she has no income of her own or to the extent that it is or becomes inadequate. The commitment must go beyond mere sharing of living expenses, as platonic flatmates or siblings living together may do; it must amount to a willingness to support, if the need exists. There must be at least that degree of financial engagement or understanding between the couple…

Where financial support is available nevertheless there will not be a RINM for this purpose unless that support is accompanied by sufficient features evidencing a continuing emotional commitment not arising from a blood relationship. Of these, the sharing of the same roof and of a sexual relationship (especially if it produces offspring) are likely to be the most significant indicators. But, since the amendment to s 63 in 1978, the sharing of a household is not essential. And, particularly in the case of older couples. The absence of sexual activity will not in itself deprive the relationship of the character of marriage.”

From this, we can draw out a few key points. Firstly, the two requirements for a RINM to exist are that there is both financial interdependence, and emotional commitment. Secondly, it is not necessary that the couple are actually living together for a RINM to exist. Thirdly, financial interdependence can be demonstrated by a willingness to support if needed and is not limited to actual present financial support.

Ruka represented a shift in the way RINM should be interpreted and applied, and accordingly to a shift in beneficiaries eligibility. However, despite this shift in the legal test, a report released in 2001 criticised the Department of Social Welfare for failing to implement the changes to the RINM test in the four years following the Court of Appeal’s judgment. The issue now is not so much that MSD are still failing to apply the correct legal test, but rather the effect of the legal test on benefit entitlement and how this affects people’s lives.

So what’s the problem?
Even when the Ruka test for a RINM is applied correctly, whether a relationship meets the standard of a RINM still fundamentally comes down to a subjective determination by a Ministry official – something MSD has recognised can cause “differences of opinion as to the correct outcome or decision”. This decision has a huge impact on beneficiaries’ lives, as whether a relationship is a RINM or not can drastically alter how much money they will receive, or if they will receive any at all.  In a 2014 report, Child Poverty Action Group noted that the RINM inquiry is “inconsistent and iniquitous” and “it has been a contributing factor to increased income poverty, and to gender inequality.” The threshold for a RINM is not always applied equally, and in many cases is set too low. This means that a relationship that entails something like (to use Work and Income phrasing) “liv[ing] separately but stay[ing] overnight at each other’s place a few nights a week” is sufficient to constitute a RINM and therefore result in a benefit entitlement cut.

The negative impact of the way the RINM standard is used also disproportionately affects women, and can have a particularly negative impact on people experiencing domestic violence. Women are prosecuted for benefit fraud on the basis of not disclosing a RINM at more than twice the rate of men. Even if the relationship is declared, a person receiving a benefit is held liable for an overpayment if their partner earns more than expected, and this also disproportionately negatively affects women. In the case of an abusive relationship, as the Child Poverty Action Group report points out:
“When a mother has an abusive relationship, a Sole Parent Support benefit can represent the only means of security for her and her children. Her ‘partner’ may even force her to apply for it. Her failure to declare her relationship status is seen as an act of dishonesty on her part rather than an act of survival.”

Additionally, the RINM standard is also problematic because it still fundamentally reflects the outdated and sexist gender presumptions that the welfare system was originally founded on from the original Social Security Act 1938. The system was built upon the assumption that male husbands should be financially responsible for their wives, and that wives would not have independent financial means. While the gendered language is no longer included in our current legislation, the gendered assumptions are still present, and the RINM test fails to take into account the fact that women (and well, everyone) has a right to be recognised as individuals, separate and independent from our relationships.

So basically, the current test is subjective, confusing, based on outdated gender norms, it disproportionally negatively affects women, and is particularly damaging if someone is the victim of domestic violence. Replacing the RINM test with the ability to still remain on SPS until you have been in a de-facto relationship for 3 years would not only be consistent with other areas of our law, but it would allow for more independence for beneficiaries, and go some way towards reducing New Zealand’s depressing poverty rates by providing families on a benefit with more resources. Our welfare system as it stands is punitive and degrading. Replacing the RINM test wouldn’t solve it completely, but it definitely would be a step in the right direction.

Charlotte Austin is in her final year of a Bachelor of Laws with Honours and Bachelor of Arts conjoint degree at Victoria University of Wellington. She joined the Green Party in the wake of Metiria’s confession. For what it’s worth, Charlotte is very grateful that Metiria was brave enough to share her story, in order to shine a light on the reality of the welfare system.

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