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The New Zealand Social Security Act is meant to provide a government guarantee of financial and social support to ensure people have an adequate income and standard of living when needed. The lives of New Zealanders are varied, so any social security system needs to be able to respond to this. A wide cross section of New Zealanders face life shocks, such as job loss, illness, disability or relationship breakdown, which mean they need to receive government assistance to support themselves and their family. Other New Zealanders need support because their low wages mean they are unable to meet basic costs such as for housing, food, school and work.
Each year over 630,000 people receive payments from the welfare system.
This excludes superannuitants and those in receipt of student loans and allowances.
345,900 families receive a Working for Families tax credit.
Some of those in receipt of the tax credits will also be receiving a payment from the welfare system.
Social security is more than just benefit payments to people not in paid work or who are unable to work. It includes welfare payments to families, students, seniors and others through tax credits, allowances and superannuation and includes help to find work. Funded by taxes and supported by community, this system reinforces our social cohesion and increases the ability of those in receipt of financial assistance to participate in employment, learning, caring or volunteering.
The current social security system was set up in a different time and no longer meets the needs of those it was designed to support. Successive governments have implemented changes to the system with intended and unintended consequences.
Agreement is near universal that the benefit and tax credit systems are unmanageably complex. The level of financial support is now so low that too many New Zealanders are living in desperate situations. Urgent and fundamental change is needed. This change will be challenging because the problems are large and the system complex.
Our recommendations seek to embed a new basis for social security, restoring trust in the system and enabling whakamana tāngata, to ensure people can live in dignity. Adopting this approach will lift outcomes for Māori and others who are particularly adversely affected under the current system.
The Ministry of Social Development (MSD) needs to accelerate its commitment to cultural responsiveness to Pacific People, to take account of the diverse Pacific communities within New Zealand.
The social security system needs to recognise that most New Zealanders are willing to engage, participate, contribute and do their fair share for their communities. Our proposed purpose, principles and values for the system reflect this reality.
At its heart, our approach is about treating people with dignity.