AAAP calls for WINZ debt cancellation as debt doubles in 5 years.

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Auckland Action Against Poverty is calling on all debt to the Ministry of Social Development to be cancelled to stop people from missing out on essentials such as rent, food and bills.

Official Information Act figures acquired by Auckland Action Against Poverty show that as of December 2019 a total of 224,479 people have debt to Work and Income as a result from receiving assistance via special needs grants, up from 169,888 five years ago.

The total amount owed by New Zealanders to Work and Income has almost tripled from $117 million to $307 million. The average outstanding debt people have with Work and Income has doubled, from $690 to 1,368.

The weekly repayment amounts are set at the discretion of Work and Income case managers, with women and Māori being made to repay Work and Income debt at a rate of around 30% higher than other groups. 

“Low benefit levels compounded by an increase in rents have led to more people entering debt with Work and Income to cover things like rent arrears, power bills and other expenses. The offset on benefit payments created from this debt means people then have even less money to cover basic expenses and require further special needs grants. This creates a vicious debt trap with Work and Income and loan companies”, says Brooke Fiafia, Auckland Action Against Poverty Spokesperson.

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“We work with families that have offsets ranging Cancelling debt to MSD would give low-income families a reprieve and enable them to get back on their feet. The cancellation of debt to the Ministry of Social Development wouldn’t put the Government’s books at risk but would ensure less families are having to sacrifice putting enough food on the table because of the offsets.

“Work and Income is systemically discriminating against women and Māori by setting offsets at a higher rate compared to the rest of the population. People on the benefit can have these offset amounts reviewed but people often do not because they are not proactively told they have the right to ask for a reduction.

“The Government’s lack of action on benefit levels is creating unnecessary hardship for low-income communities. Until benefits are increased to liveable levels more families will continue to rely on special needs grants to cover basic expenses and be trapped in debt.

“The Government has the tools to free 224,479 people from debt incurred as a result of our broken welfare system, the only thing standing in the way is political will”.

3 COMMENTS

  1. What a sadistic and cruel operation neo liberal “welfare” is. Payments slashed to less than daily dietary requirement levels in 1991, and never restored to liveable levels to this day.

    WINZ/MSD staff apply policy rather than the legislation when they can get away with it, mis inform, omit, stand down, sanction, and lose documents as a matter of course! These judgemental staff can also be personally rewarded for NOT providing the assistance vulnerable people seek. They also intimidate, spy on, and generally make beneficiaries lives a misery. AND then they rub it in by establishing debt incurred by the low level of support in the first place. Plus there is massive societal stigma against beneficiaries, to the point where the Shipley Govt. ran “dob in a bludger” junior Stasi type TV ads, and Helen Clark’s “jobs jolt” restricted freedom of movement around the country for beneficiaries.

    If this Govt is reelected a Basic Income and new social security agency have to be a priority. Perhaps a few of the Two Tier “$490 bennies” from the Covid middle classes, may actually end up supporting such a call once they have been degraded for a few more months by WINZ/MSD.

    • You are correct in the way you describe WINZ. It is good that those workers made redundant by the effect of the virus are getting the extra but it means that a large number of workers will not know how terrible the state is to real benefituries until after the election.

  2. There’s an interesting Class Action suit being wrapped up across the ditch.

    Excerpt:
    Lawyers acting for hundreds of thousands of welfare recipients who have had unlawful “robodebts” raised against them have urged the Government to apologise over its handling of the scheme and promised not to use the apology against the Government in court.

    Government Services Minister Stuart Robert announced on Friday that the Government would pay back $721 million for 470,000 debts raised under the scheme, which matched annualised income data from the Australian Tax Office with income reported to Centrelink by welfare recipients. ABC Article Linked Here
    ———————————

    The voice of Auckland Action Against Poverty (AAAP) is Ricardo Menendez March, a fierce anti-poverty campaigner. He would be a most invaluable person to have as an elected parliamentary representative. In this September election he is standing for Maungakiekie, for the Greens.

    This from Wiki: “The core of Maungakiekie is the suburbs of Auckland clustered around the Southern Motorway, and the most southern parts of Auckland City facing the Manukau Harbour. As at 2008, these include Penrose, Panmure, Onehunga and Royal Oak. In character, the seat is a minority-majority seat, with a large Māori, Pacific Island and Asian population. It is also quite a young seat, with 46.8 percent of the seat’s residents under the age of thirty.” Wiki on Maungakiekie

    In the 2017 election the seat was taken by National’s Denise Lee, with 15,063 votes.
    Labour candidate Radhakrishnan took 12,906, the Greens’ Chloe Swarbrick, 4,060.
    Had the Left combined their votes, they would have won.
    (Chloe is now running for Auckland Central against Nikki Kaye.)

    Ricardo Menendez March by Scoop

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