Sex and beneficiaries – 19th century morality in 21st century



I never thought at this stage of my rather dull economics career I would be writing a blog about SEX.

But I am trawling through all the cases I can find on relationship fraud and it is making me very, very cross indeed and very sad to observe the moralistic 19th century veneer on our so-called civilisation.

Imagine if it made no difference whether you were having SEX or not, as to how you were treated. But, hold on, you don’t have to have imagination, you just need to think of that other three letter word TAX. The IRD don’t care whether you are having SEX or not, so long as you pay the individual tax you should.  They don’t peer into your bedroom to see if they can charge you more tax for having SEX. They don’t string you up, humiliate you, put you in jail and otherwise ruin your life for having SEX.

The sad fact is the benefit system, backed up by courts and judges who have no training in these matters, treats those who have SEX like they are seriously deviant. They need to be severely punished and often have their lives ruined by prison terms, community service, home detention to say nothing of adverse publicity and long-term repayments schedules that are crippling and cruel.

Exactly what is different between flatting or sharing and de-facto or married?  You got it, SEX.

Here is an example of what I am seeing and I will alter the identifying detail in the interests of not further recriminalizing the victims of this terrible system:

A mentally disabled man is on the unemployment benefit for 10 years and then shifts in with a woman for the next 10 years who provides him some support with his daily living problems.  This woman is in ill-health herself, eking out a bare subsistence on a benefit with some part-time work.

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Under the current benefit rules living arrangements make no difference for single people. He is entitled to the single rate of jobseekers benefit even if he is sharing accommodation. He considers himself unmarried and continues on the meagre single rate of jobseekers supplemented by a few hours of odd jobs a week. Work and Income detects a whiff of SEX and comes down like a ton of bricks accusing him of having been in a de facto relationship for the last ten years.  He is prosecuted in the courts and branded a ‘benefit cheat’. The judge actually refers to there being an “intimate” relationship so this must be different to flatting and must be punished.  He is told he is lucky not to be sent to jail and gets a reduced sentence on account of his mental disabilities, his need for a caregiver and the fact he pleads guilty. However, he will still do many months of community sentence and lengthy home detention making it impossible to do any paid work at all. For the next 15 years he will repay $20 a week out of his meagre benefit and has a reduced capacity to ever again earn extra as now he has a criminal conviction.

We are not talking about a life of luxury. The Single Jobseeker weekly rate is only $210 but the ‘married’ or ‘de facto’ person rate is even less at $175.  The result is that two single people flatting together are entitled to $420 per week, which is $70 more per week than if they are deemed to be in a de facto relationship.   Worse, as singles they can each earn up to $80 a week before this additional income sharply reduces their benefit entitlement, whilst a de facto couple can earn only $80 between them.  There are other complications with accommodation assistance.

But what kind of a test is used to say two unmarried people are actually in a de facto relationship and therefore can be treated as if they need less money to live on? Despite a long checklist on Work and Income’s website, it boils down to SEX.  Keep out of each other bedrooms is prudent advice!

The welfare provisions are perverse in the extreme but clearly the faster a relationship can be found to be in ‘the nature of a marriage’ the more the state saves.  The so-called ‘benefit cheat’ is usually said to be ‘remorseful’. A plea of guilty to ‘relationship fraud’ can take up to 6 months of a jail sentence so a guilty plea can be expected in a situation of clear power imbalance. What alternative does an accused beneficiary have without the legal resources to fight it through the appeal process?

What are we thinking of when we differentiate between single sharing and de facto married and then criminalise people for not getting the difference? If we are honest we should acknowledge we have a system that taxes SEX. The very first change that MUST occur is alignment of the rates so there is no difference between single and married as is the accepted practice in our tax system. The second change that is beyond urgent is to remove the joint income test so each is treated as an individual when there is any extra earned income.




  1. People have to share accommodation because they cant afford to live alone and pay the rent, so the government sees another way to take from struggling people.
    I suppose if someone is in the back of a car getting it on maybe they could get them that way,the government looks for any way it can to deprive people of a decent life.
    Government gives tax breaks to their cronies and that’s acceptable to government ,but allow the beneficiaries enough for food ,cant have that.
    .This government is sickening,but they are not alone, UK is the same ,Australia and other countries with puppet leaders,who are corporate led ,the rules are the same in all countries that have or are being ruined by overseas interests,and its going to get a whole lot worse if TPP is signed on Wednesday,and the lobbyists are working like mad for their corporate bosses to get the trade deals signed.

  2. Well, this and many other issues with the present “benefit” system could be easily resolved by introducing a universal basic income, which is set at a rate that enables each person to live off by covering all basic, essential living costs.

    At the same time the annual amount of the ubi could be treated as tax free income for all, so that an incentive to work would exist for those wanting to earn and save more to buy and “invest” in things like their own cars, their homes, in various consumer goods, in travel and what else they may desire or deem “necessary” for a lifestyle they may wish to pursue.

    The otherwise progressive tax system could ensure that enough tax is earned by government to fund the services and infrastructure government needs to fund.

    People would be entitled to certain top-ups for disability needs, for perhaps study and training, and accommodation, if the rent or mortgage costs they have are high and unaffordable otherwise.

    We would save hundreds of millions in annual admin costs, save in legal prosecution costs, in the spying and surveillance that WINZ and MSD also engage in, and those receiving the ubi would not be punished for the lifestyle they choose.

    I think the Nats will never go down this way and introduce such a system, so there is an opportunity, Labour and Greens, to offer a real ALTERNATIVE, that makes sense and could win votes across the board, as long as it is all well researched, well calculated and well presented.

  3. How much does it cost the taxpayer to spy on people to see if they are in a relationship, plus the cost to the legal system, and the prison system if they are locked up, or to supervise them on community service. Wouldn’t it be easier just to give them the $25?

    • For exampole it costs over $100,000 to keep a women in prison for a year. To protect society from what? I am sure that there would be costs savings in just giving them the extra income

  4. Susan

    You failed to mention the discrimination against married people in the provision of state pensions. Strange, considering your position.

    I’m thinking of divorcing my wife at 65 and having an affair with her instead.


  5. When I was on solo parent benefit,it was made clear that I was not allowed to have sexual relations(overnight specifically,however it was moot,as it could be viewed as a relationship unless I produced a receipt)
    ,as I would lose my benefit status.They became a partner legally,..unreal,but nobody cares about beneficiaries…

    • “nobody cares about beneficiaries…”

      Ain’t that the truth? The pool of Lawyers who will take on ACC cases is significant, and under ACC, they are actually “appeals” rather than the “reviews of decision” that you get under WINZ. The pool of lawyers and organisations who will take on WINZ is just about non-existent and the few organisations that do actually “advocate” on behalf of WINZ “clients” are so under resourced it’s not funny. The power imbalance between WINZ staff and its “clients” is immense and nobody seems to care much about it.

      Corrections; Probation staff especially are just as bad, if not worse and for me, it’s a sad, sad indictment on NZ society where Beneficiaries and “Offenders” are so often lumped together in people’s minds and immediately shoved down the very bottom of the pile, expected to kow-tow and ask how high when told to jump, despite in most cases, being grown adults and also expected to be grateful for the pittance the Government deems sufficient for a person and/or their spouse/partner and dependants to live on, never complaining when they have to decide such things as paying something off the Power bill and putting food on the table for the week.

      Each is disgraceful to the nth degree and as a country, we should all hang our heads in shame over this attitude.

      • I work for an organisation that conducts reviews of WINZ decisions; in fact, I attended a kangaroo court last Friday and made legal submissions. I also practice ACC law, although I’m about bankrupt; when I run out of toilet paper, I’ll take my LLB out of its frame and put it to positive use. Of course, Labour doesn’t care about benefficiaries, any more than it cares about low-income workers; the Party set the neoliberal carnival in motion back in 1984 and its elite have done very nicely out of it, thank you. In 2015, nothing has changed: our LEC chair prosecutes beneficiaries for a living and demands prison sentences for sole parents who have sex. The gentleman will probably become our electoral candidate; although he won’t win the seat, he’ll probably get a high enough list ranking to join the next caucus. It’s a funny old world.

    • It is not true that you cannot have a sexual relationship, even with a person you share accommodation with, for WINZ and MSD the criteria they want to look at is, whether it is an ongoing, de-facto kind of “relationship”.

      In the times we live in there are a fair few people, who would rather consider themselves singles, and having casual sexual contacts and short term relationships is not that unusual anymore.

      So Susan raises valid points, but it should not be understood that this means you cannot have any sexual relationship. I really do not get it, what you mean with having to provide a “receipt”.

      The system is out of date, and the matters raised here are just one aspect that needs looking at.

      It was in earlier times so designed to save the state costs, by with all the scrutiny, the rules, the endless applications, reviews and even checking, spying and legal prosecutions, the costs are enormous, and I would argue, the argument to “save” costs is nonsensical, as they do not.

      They employ many staff just administering all this, which are people that could be employed doing things like producing value added, smart products and services, which this country needs to develop, to earn a living in the future world. We have shortages of carers and other staff, but MSD rather seem to be wanting to employ more people administering people and their emergencies, 24/7, instead of redesigning the system.

      Instead they are working on “systems” and “tests” that target certain socio economic groups (potential child abusers and so) considered “at risk”, to observe and control them from the cradle to the grave, also to “reduce risks” and “save costs”. By doing so they put groups of people into drawers, and create an Orwellian society.

      • Although it is technically correct that beneficiaries cannot be prosecuted, convicted and imprisoned merely for having consensual sex, many are because the law facilitates witch hunts against them. Even the phrase “relationship in the nature of marriage” is vague and inchoate when set against “murder”, for example. Even our senior judges cannot define the meaning of “RINM”; it is, therefore, hardly surprising that beneficiaries cannot comply with their legal obligations because they cannot understand them either. Even the existence of substantial domestic violence within a relationship is not enough to save the victim of the violence from a prison sentence. In spite of all the Court of Appeal, and Frances Joychild QC, had to say about domestic violence in the “Ruka” affair, MSD’s lovely prosecutors firmly disregard precedent and learned authority when busting beneficiaries.

  6. Yes…it does seem a little archaic and punitive… I’m sure that we as a so – called enlightened people in a so – called modern age can come up with a better definition of what constitutes a relationship….

    And surely a person should not be penalized for desiring the most basic of human needs…a fulfilling relationship…

    After all…have these people been tried, found guilty and now serving an open – cast prison sentence for simply being solo parents?

    Because that’s what it amounts to.

    The whole situation is totally ludicrous.

    • Wild Katipo
      you are so right- archaic punitive and ludicrous. But it is not just sole parents as the case described in the blog shows. If MSD persecuted those with ‘relationshps’ over the age of 65 as aggressively as they do beneficiaries imagine the outrage and cries of ludicrous interference. They could of course do this as the rules apply just the same to those on NZS too. It would save them heaps of money if over 65 singles sharing were paid the same as ‘married’.

  7. Another advantage to the UBI is that people won’t be forced to work in low paid work with low hours, 2 hours here, 1 hour there. Employers will have to pay living wages and offer decent hours, which is exactly why it will never happen under National, as their political loyalty is to the employers.

  8. Is it still the case that a married couple, each working, pays individual tax, yet if either becomes unemployed they are suddenly Married and ineligible for income support?

    If so, why?

    That seems both archaic and unfair.

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