A short history of Special Benefit

The Royal Commission on Social Security in 1972 and the report of the Royal Commission on Social Policy in 1988 reinforced the need for Special Benefit provisions within the Social Security Act for the following reasons: 

• Social security is a social responsibility for the community as a whole.
• Adequate provision for income is a necessity to ensure that all members of the community can live with dignity.
• Provision for assistance should be made where there is a demonstrable need.
• Everybody must be able to participate in the community with an appropriate level of the communities resources.
• There must be an ability to provide relief to an immediate need where a need reasonably exists.
• Children must be protected from economic restraints beyond their control.

The safety net mechanism that ensured that all of the above factors were able to be met has historically been by way of s61G of the Social Security Act, 1964, the provision of a special benefit where individual circumstances warranted. 

Over a period of time restrictions to the open ended nature of s61G have been imposed by way of Ministerial Directions promulgated by way of s5 of the Act. The Ministerial Directions have evolved to meet the financial restrictions considered appropriate by the particular political administration of the day BUT the important aspect of a Ministerial Directive is that the discretion to consider all of a person’s circumstances has remained inviolate. 

Regulated rules remove entirely any discretionary ability to assist a person whose needs are genuine. What does this mean …. No matter how genuine the need, if the rules make no provision the TOUGH. You can guarantee that it is a physical impossibility to create rules to cover every genuine contingency hence the historical development of the unique legal concept applicable to a wide and varied legislative portfolio of the principle of the application of discretion power. 

It is accepted by reasonably thinking persons that without restrictions the open ended provisions of s61G of the Act can lead to an abuse of an appropriate political approach to the management of social welfare benefits by the Crown. The Crown has a responsibility regardless of its political leanings to ensure that it operates to an appropriate budget that meets the social norms of the day; however, morality determines that any such direction cannot be at the expense of the poor and disadvantaged of society. 

Under the previous Labour Party Government the now Minister for Finance, the Rt. Hon. Mr Cullen was the Minister of Social Welfare. Under his direction the then Social Welfare Department restricted the ability of a beneficiary to access a Special Benefit by placing a minimum shortfall of income of $50.00 or more. In other words if a person was having financial difficulties of up to $50.00 per week that person was prevented from accessing a Special Benefit. Such a direction was draconian and patently unreasonable according to the norms of the day. 

The following National Party Government made further Ministerial Directive’s that introduced other limitations and reduced in stages the minimum shortfall amounts down to $5.00 per week. Limitations such as the type of expenses that might be considered were not set in stone, as the ability to employ discretion when considering entitlement to a Special Benefit remained.  

The exercise of discretion was reasonably limited by an applicant having to demonstrate special or unusual circumstances before a discretionary benefit could be empowered. Such a mechanism protects the Crown from an reasonable fiscal blowout. Where discretion is available and is appropriately applied any fiscal blowout confirms that the basis on which a primary benefit is established must be flawed otherwise a fiscal blowout can not ensue. 

During the 1990’s when the National Party was in power the policy directions of what became the Income Support Service toward Special Benefit more often than not led to breaches of the law governing Special Benefit. 

Advocacy groups throughout the country fought a running battle with the ISS and ultimately WINZ, as the business orientated profile of these organisations was engineered from a political perspective with a determination to circumvent the lawful application of the legislation governing Special Benefit. 

In 1993 following a campaign by the author that lasted for 12 days and nights outside Parliament the then minister of Social Welfare, Mr Gresham, instructed the ISS to administer special benefit applications more fairly. Mr Gresham was replaced as the Social Welfare Minister by Mr Roger Sowry. The ISS service and ultimately WINZ was soon back into the previous groove of unlawfully declining Special Benefit entitlements to thousands of low income workers and beneficiaries. 

In 1994 the National Government sought to introduce Regulations in place of a discretionary Special Benefit to permit a rules based approach to providing safety net assistance to low income workers and beneficiaries. Advocates throughout the country sought the assistance of the Labour Party and other opposition parties including the present Prime Minister, the present Minister of Finance and the present Minister Mr Steve Maharey, to mount opposition in Parliament to diffuse the determination of the National Party Government to remove the discretionary element that Special Benefit provided. 

The Labour Party opposition pointed to the immorality of the National Government’s proposals and assisted with enough public support to dissuade the National Party from removing the discretionary factor from the consideration of Special Benefit assistance. 

We now have the situation of the same political entity that previously opposed the National Party’s determination to introduce a seriously limited form of safety net assistance, now passing legislation that is exactly the same that they opposed just a few short years ago. 

Why the change of heart? 

In 2000 following an appeal to the Social Security Appeal Authority a ruling was made by the Authority that determined WINZ had been unlawfully restricting the application of the Ministerial Directive on Special Benefit. 

The financial implications arising from the Appeal Authority’s decision on the then social welfare budget of the National Government were open to a fiscal blow out of huge proportions. The only reason that there was the probability of a blow out to the fiscal strategy of the National Government was because the Government had been unlawfully circumventing low income workers and beneficiaries entitlement to Special Benefit over a number of years. In doing so the Government had been calculating the savings that accrued, as if they had been gained in a legitimate sense. 

It was the old story that suddenly ill gotten gains had caught up on Government and had to be accounted for. 

The Social Security Appeal Authority decision that had brought to light the underpayments to low income workers and beneficiaries was appealed by WINZ to the High Court but the appeal was eventually dropped by the Ministry. Effectively the National Government was placed in the situation of having to face the prospect of paying the piper for being out of tune. 

Before any accountability for the historical Special Benefit intransigencies was able to take place the National Government was defeated at the polls and the present Labour Party administration was elected to Government. 

The Labour Party Government inherited the prospect of having to legally address back dated entitlements of Special Benefit owed to thousands of low income workers and beneficiaries while at the same time address present day entitlements, as the facts and figures derived by advocacy groups validated that many thousands of low income workers and beneficiaries were entitled to Special Benefit that was not being paid to them.  

Literally hundreds of millions of dollars was in the melting pot, which did not paint a rosy picture for the incoming Labour Party administration. To date there has been no serious effort by the present Government to seek out those whom many millions of dollars are historically owed for obvious reasons.  

Since gaining power Minister Steve Maharey has publicly and privately instructed Ministry of Social Development officials to ensure that low income workers and beneficiaries receive their lawful entitlement to benefits including Special Benefit. 

Working parties on Special Benefit at Ministry level were initiated including participation by beneficiary advocacy group advocates. Advocacy groups have also participated as an advisory committee to the Chief Executive of the Ministry of Social Development on social welfare issues and legislation since the election of the present Labour Government. Participation has taken place on agreed levels of confidentiality and has covered many aspects of the workings of WINZ and the amendment to social welfare legislation generally. Advocates agree that as a result of these interactions that social welfare administration has improved dramatically but eventually at the cost of the most disadvantaged who require the protection of the discretionary powers of Special Benefit considerations. 

At no time were the members of the advocacy advisory groups and working parties made aware of the determination by the Labour Government to get rid of the discretionary powers within Special Benefit by legislating Special Benefit out of existence.  

Despite the public admonition of the Minister to ensure that full entitlement to Special Benefit took place the Ministry has failed to proactively employ the information available to it by way of its own computer systems to ensure that Special Benefit entitlements are dispensed where entitlement exists. The Minister has been made aware by the advocacy groups of the lack of commitment by his Ministry but this has not resulted in a change of attitude at Ministry level toward Special Benefit dispensation. 

Advocacy groups have been able to break down the WINZ computer statistics to demonstrate the number of persons held on WINZ files who qualify for Special Benefit assistance, the WINZ offices in which the files are located, the ethnic groups that applicants come within and the percentage of beneficiaries who are presently being underpaid. 

In desperation advocacy groups have had to conduct benefit impacts outside WINZ offices inviting the public to seek the assistance of advocates to apply for Special Benefit. On each occasion the public response has been dramatic yet still Ministry officials have dragged the chain. These Special Benefit impacts have been limited by the resources available to the advocacy groups.  

A recent classic example of Ministry obfuscation toward ensuring entitlement to Special Benefit is the most recent Ministerial Directive on Special Benefit.  

Ministry officials advised advocates in November 2004 that the cost of purchasing a washing machine or refrigerator, which is considered an essential item in the Ministerial Directive on Special Benefit, would no longer be allowed when an applicant was using an advance of benefit to meet this cost. An advance of benefit is essentially a person in desperate straights resourcing their own future earnings to purchase an essential item. It saves the Government an untold amount of money in supporting hire purchase agreements that have an interest quotient.  

Over the years the policy of the Ministry toward these advances of benefit has been to consistently deny the inclusion of advances of benefit that have been used to purchase a refrigerator or washing machine in Special Benefit calculations. The statement that this cost would no longer be allowed became a cynical joke in itself given the historical policy of excluding this form of cost.

This despite the fact the Ministerial Directive clearly provided for such an inclusion. Whenever WINZ was challenged at an individual level that an advance for a washing machine or refrigerator should be included in Special Benefit calculations WINZ would submit to the challenge and include the calculation however unless an individual knew that the policy was unlawful WINZ obviously would not be challenged. WINZ was winning a numbers game to advantage WINZ contrary to the lawful obligations of WINZ toward individual Special Benefit applicants. 

The reasoning given by Ministry officials for changing the Ministerial Directive to outlaw the inclusion of advances of benefit, as a calculated cost toward entitlement was: - 

“A confession that the law had to be changed to bring the law into conformity to departmental policy”. 

Departmental policy is a reflection of the determination of the political entity of the day. Rules based Regulations providing safety net assistance will be at the mercy of the political direction of any present or future Government administration in exactly the same manner as the above example and not to toward the needs of the individual.