Now for a single benefit to tidy up a tangled web

The National party is trying to work out how to use welfare as a big hit in its bid to lead the next government. But is there really a big hit in there?

Don Brash favours lifetime limits on the unemployment benefit. The more worldly Katherine Rich, the social welfare spokesperson, is more flexible.

Rich and ACT’s Muriel Newman want to go the Wisconsin route: get beneficiaries into jobs. But to do that properly, Wisconsin found and both acknowledge, is not a cheap option, which is not good news for tax-cutters in both parties.

And there are tactical complications in the politics. Social Development Minister Steve Maharey has been edging towards their territory. So to get a big hit National will need to go hard right, tough on time limits and other rules.

But National and ACT have probably already vacuumed up all the voters who are susceptible to that sort of message. For the average suburban voters National needs to convert to win power welfare is not the burning issue — with unemployment low and household balance sheets the best they have been for years — that it would be in harder times.

It doesn’t help the National-ACT case that since 1999 numbers on the domestic purposes benefit have dropped by 2500 and the proportion of DPBs moving into work rose from 19 per cent March 1997 to 36 per cent in March this year, according to a curiously low-key statement by Maharey on Friday.

Why the fall? Officials are cautious. In part it is probably just a factor of the humming economy. But it may also partly result from a policy reorientation over the past four years from palliative treatment of beneficiaries to development of “personal development plans”, with what Maharey calls a “balance between parenting and work” and assistance to get into and stay in work.

Maharey this week announces the national roll-out of what he thinks has been a successful pilot programme in Manukau designed to get more sick and disabled beneficiaries into sustainable work.

This involves lower beneficiary-case worker ratios, support into employment through the likes of training and “post-placement” support by way of transport and other assistance and help at “the health-welfare interface” as it is known in the jargon — that is buying operations to get sickness beneficiaries physically able more quickly than via long hospital waiting lists (as ACC does for accident victims) and psychological counselling to deal with such inhibiting factors as depression.

Counselling sounds like comfort politics but Maharey says more money has been going on this than on operations. “It clearly works,” he says, by reducing fears and insecurities, particularly among those with some mental disability.

But Maharey has been cooking up something much bigger. The working title is the “single benefit” and it should clear the cabinet in December after some more work by officials to ensure no beneficiary is left worse off at the changeover and to quantify the national cost-benefit.

There are, Maharey says, 10 “base benefits” (among them unemployment, sickness, disability, DPBs, widows and so on) and 36 “add-ons” designed to meet special needs and difficulties. These grew up during the 1980s and 1990s when the focus was tightened on to individual need.

Fine-tuning needs-based payment is a rational approach. But it has led to frontline welfare staff spending around 70 per cent of their time untangling the web of benefit entitlements for those in need. The complexity has also spawned an “advocacy industry” designed to help beneficiaries actually get from bamboozled staff what the law says they are entitled to.

Maharey wants to cut that 70 per cent to 30 per cent by rolling all but the youth independence benefit (a low rate for teenagers who leave home) into one single benefit and drastically reduce the need for add-ons by incorporating many of them (though not the accommodation supplement) in the proposed “single benefit”.

This is not quite as simple as it sounds because there would be three “premiums” over and above the base benefit: for health status (long-term disability), people caring for others, such as children or aged parents or mentally disabled, and unemployment.

Expensive? Initial estimates were for several hundreds of millions of dollars which had the Treasury quivering. But Maharey claims more recent costings suggest it will be to some extent self-funding.

How come? “We want to move the system from income support to getting on with your life,” says Maharey. The question staff are to ask is to go from “What are you eligible for?” to “How do we help you?”.

Help into what? Into an independent, self-reliant life which turns a tax cost into a taxpayer and, incidentally, moves the individual concerned from depressive dependency into a life worth living.

If that sounds like National and ACT, don�t be too surprised. In this field, as in others, once-mushy Labour has been quietly nudging the centre line. Even Maharey the onetime sociologist.