Do not require recalculation of Temporary Additional Support when income changes

What is Temporary Additional Support?

Temporary Additional Support (TAS) is a payment made to people receiving certain social welfare benefits, such as Jobseeker or Supported Living. It is designed to help cover the cost of rent or mortgage payments. Under the current Social Security Regulations 2018, specifically clause 65, the amount of TAS is calculated based on the recipient's total income. This means if a beneficiary starts earning money from casual or part-time work, their "income" increases, which typically reduces the amount of TAS they receive, as the system assumes they have more money to pay for housing.

Current Situation and Context

This petition arises from concerns about the rising cost of living in New Zealand. Many beneficiaries report that their base benefit rates do not cover essential costs like food and utilities, leaving them reliant on TAS to secure housing. The petition argues that the current rule creates a "benefit trap": if a person takes on casual work to supplement their income, their housing support drops, potentially leaving them worse off financially. The petitioner suggests that while tri-monthly reviews should continue to ensure people are not working full-time, the TAS amount should remain fixed at the current entitlement level despite small increases in earnings from casual work.

Arguments in Favour

• Financial Stability: Keeping TAS at the current level prevents a sudden drop in housing support when someone takes on small amounts of work, reducing the risk of homelessness or poor housing conditions.
• Encouraging Work: It removes the penalty for earning extra income, allowing beneficiaries to improve their financial situation without losing essential support.
• Cost of Living: Given the economic crisis, many beneficiaries struggle to meet basic needs; maintaining TAS levels helps ensure they can afford food and shelter.

Arguments Against

• Principle of Means Testing: Social security systems are generally designed to top up income to a certain standard. If income rises, support usually decreases to reflect the increased ability to pay for housing.
• Fairness and Equity: Critics may argue that allowing TAS to remain unchanged while income increases could create inequities between those who work casually and those who do not, or between beneficiaries and low-income workers who do not receive benefits.
• Administrative Complexity: Changing the calculation method could complicate the administration of benefits and require significant system changes within the Ministry of Social Development (MSD).

Relevant Context

The Social Security Regulations 2018 are the primary legislation governing these payments. Any changes would require an amendment by the House of Representatives. The Ministry of Social Development (MSD) manages these payments and conducts regular reviews to ensure eligibility. Recent discussions in New Zealand have focused on the adequacy of benefit rates in the face of inflation and housing costs, with various groups calling for reforms to make the system more supportive of those entering the workforce.

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