What’s the deal with benefit sanctions and sickness?

Wednesday, 21 February 2024

Is the Government really going to make cancer patients go back to work?

Social Development Minister Louise Upston caused a stir this week when she said that the Government would be asking the Ministry of Social Development to begin checking in on people who had been on Jobseeker Support for more than six months.

She said sanctions should be applied as appropriate to those who did not meet their obligations, such as attending job interviews, completing pre-employment tasks and taking work that was available.

That prompted some to ask: Does that mean cancer patients are going to be asked to work?

Most cancer patients probably aren’t getting Jobseeker Support anyway.

There is a designation of Jobseeker Support - Health and Disability - that is designed for people who are temporarily unable to work due to something such as sickness. This is usually for a term up to two years, and includes situations where people have to take leave from work and have run out of sick pay.

But because there is a household income test applied, few people with a working spouse qualify. The amount that is paid is reduced by a rate of 35c per $1 earned once household income passes $160 a week.

Craig Renney, policy director at the NZ Council of Trade Unions, said this meant many people would qualify for very little. “It helps explain one of the great inequities - you get ACC for an accident but you don’t get ACC for a health or disability condition.”

People who are sick for a longer term might qualify for a supported living payment, and there is also the accommodation supplement and other support, depending on their household income, but these are not the types of payments being discussed in relation to sanctions.

Many people who become unwell end up working reduced hours, using sick leave or other leave from their employer or calling on income protection and trauma policies from private insurers.

What are the obligations for someone on a health and disability Jobseeker benefit?

People on Jobseeker are generally expected to look for at least 30 hours’ work a week, except if their health condition means they cannot work full-time.

If they can only work part-time, they are expected to look for 15 hours’ work a week.

They are not required to meet work obligations if they can only work fewer than 15 hours a week. But they might be required to show that they are taking reasonable steps to plan for work in the future, attend work preparation interviews or attend seminars.

Health conditions have to be certified by a health practitioner, who has to indicate that a person’s capacity for work is affected, how long the effect might last and the extent to which the person is affected.

The Government can also ask for a person receiving this benefit to undergo a medical examination at any point to check their capacity for work, including by someone nominated by the Ministry of Social Development.

Jayne Russell, client service delivery at the ministry, said if a cancer patient was receiving chemotherapy for the next three months they would likely be exempt from work obligations on the advice of their doctor. “In which case, we would not be engaging with them on work obligations, they would not be required to actively look for work.

“If, in the rare circumstance they did have work obligations, MSD would be supporting them to find work that they are able to undertake, determined by their doctor in their medical certificate.”

She said the ministry would only initiate an “obligation failure” if it were satisfied that someone did not have a good and sufficient reason for failing to meet their work or work preparation obligations.

Sanctions already exist

The ability to sanction beneficiaries who are not seen to be keeping up their obligations already exists.

In 2017, 60,588 sanctions were applied to people who were not sufficiently looking for work, a number which droppped to 25,239 in 2023.

The Government is just taking a harder line on what already exists.

Upston said the previous Government had wanted them kept as a last resort but that dampened their effectiveness as an incentive.

“I’ve written to the chief executive of MSD to make this Government’s view clear that we want to see all obligations and sanctions applied. If job seekers fail to attend job interviews, to complete their pre-employment tasks, or to take work that is available, then there needs to be consequences.”

Some of the concern comes from people who wonder if it will be up to individual ministry officials to determine whether someone has done enough to avoid sanctions, and different people could take a different view.

Upston said it was likely the new check-in system would result in an extra 2500 people reporting on their work-seeking progress every month.