Inequality: even Treasury cares…

Written By: - Date published: 9:21 am, February 16th, 2013 - 64 comments
Categories: equality, treasury - Tags:

There’s a book I’ve heard about that I’m hoping helps push the inequality awareness barrow a little further this year.

Inequality: A New Zealand Crisis by Max Rashbrooke is due out in May.  The ideas surrounding the inherent unhealthiness (social, but also actually physical & mental) is slowly (much slower than the UK) getting traction here.  The Living Wage campaign will no doubt feed into that as well.  I hope this book pushes things a bit further so we can start making sure that all parties present policies that are socially sustainable, rather than just about maximising GDP and minimising government debt.

Max seems to have been doing some good work – looking at how even Treasury is starting to think about inequity and things beyond GDP generally.

Treasury’s thinking would appear to need a bit more work, as they seems to equate equity with social mobility.  Social mobility is in itself a good thing, but having some people up high and some people down low is still injustice, even if they can switch places with their parents.  The greater point that increased mobility is always (so far) a consequence of improved inequality also seems to have escaped them – despite the obviousness that the wealthy will be able to afford better education, nutrition, societal participation and all those other lovely -tions that mean you’re far more likely to succeed in life.

But hey, it’s great to see that neo-liberal bulwark start to think a little outside the square…

64 comments on “Inequality: even Treasury cares… ”

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  1. RedLogix 1
    16 February 2013 at 9:42 am

    Great to see this being taken up by another professional writer here in New Zealand. Gordon Campbell has been a pretty reliable voice, but a book length work is specific to New Zealand is to be greatly welcomed.

    Another problem with the (Treasury) paper is that it gives an extremely biased account of why inequality has risen in New Zealand, discussing technological change and different household patterns, but not mentioning little things like lower taxes on the very wealthy and reduced benefits for the poorest. Nor does it mention the decline in union membership, which some overseas research suggests is responsible for up to one-third of rising inequality. The failure to even mention this factor is just staggering.

    My take is that there is has been a confluence of factors that have enabled this change. .. but the root cause was entirely political.

    • Draco T Bastard 1.1
      16 February 2013 at 12:06 pm

      The root cause of the increasing poverty that we’ve seen over the last 30 years is the adoption by the politicians of an economic theory that put the wealthy ahead of everyone and everything else and that is also completely disconnected from reality.

    • Rogue Trooper 1.2
      16 February 2013 at 2:48 pm

      Entirely Political and Cultural (we have been our own worst enemies oddly enough, and it may be all over bahh the shouting from the rooftops)

  2. Colonial Viper 2
    16 February 2013 at 10:03 am

    But hey, it’s great to see that neo-liberal bulwark start to think a little outside the square…

    Don’t get too excited, this is probably just them discussion scenarios. Increasing social mobility probably came right after “managing the budget deficit after a hypthetical Martian invasion”.

  3. Afewknowthetruth 3
    16 February 2013 at 11:04 am

    Ben, I suggest you read The Easy Way. Then you would not keep posting idiotic things on this website.

    Oops, I forgot! The name of the game is to remain uniformed: that way you can don’t have to deal with any of the real issues, and keep babbling on.

    [Ben Clark: 1 week ban for self-martyrdom. Pointless abuse of authors, no attempt to argue your point.]

    • Colonial Viper 3.1
      16 February 2013 at 11:30 am

      The name of the game is to remain uniformed

      Funny typo.

      Don’t be too tough on Ben (and others). They’re not used to having to think of every thing, even taxation and social security policies, in terms of the end of growth, climate disruption and energy depletion.

      [Ben Clark: don’t encourage AFKTT CV. And don’t misrepresent my views – there’s nothing in this post on my views on GDP growth beyond my pleasure that Treasury is looking beyond that; and my failing to mention climate change in a post doesn’t mean I’m unaware of it or its effects. Unless you think greater inequality will help our climate change problem?]

      • Colonial Viper 3.1.1
        16 February 2013 at 11:46 am

        Also, I bitch about the size of Auckland and the craziness of fitting 30% of the population in 0.3% of NZ’s land area.

        Just try and operate a city like Auckland on only half or a third of the diesel and petrol of today. That’s happening in the next 20 years.

        • Draco T Bastard 3.1.1.1
          16 February 2013 at 12:14 pm

          I think that was actually one of the better outcomes of the award system. As everyone was paid close to the same amount for the same job no matter where they worked it allowed and encouraged more dispersion in the population.

      • Rogue Trooper 3.1.2
        16 February 2013 at 2:49 pm

        why? some of us do.

      • Colonial Viper 3.1.3
        17 February 2013 at 1:01 am

        And don’t misrepresent my views – there’s nothing in this post on my views on GDP growth beyond my pleasure that Treasury is looking beyond that; and my failing to mention climate change in a post doesn’t mean I’m unaware of it or its effects. Unless you think greater inequality will help our climate change problem?

        Hi Ben, I wasn’t complaining about your post not mentioning climate change every paragraph. (That’s a Jenny approach and one that I dislike as being both repetitive and unproductive).

        If you actually do have a cohesive thinking framework around the end of economic growth, energy depletion and climate change, then I apologise for suggesting otherwise.

        From my way of thinking, congratulating Treasury on taking a step outside the neoliberal box, misses the point that they remain frighteningly silent (or ignorant, or both) on the challenges facing NZ now and in the next 20 years.

  4. Draco T Bastard 4
    16 February 2013 at 12:00 pm

    But hey, it’s great to see that neo-liberal bulwark start to think a little outside the square…

    Well, I suppose even economists can start to realise that their ideological theory is disconnected from reality if the facts start to hit them hard enough.

  5. bad12 5
    16 February 2013 at 12:43 pm

    Yes it is nice to see that Treasury has an inkling about economic inequality, perhaps sensing a ‘change’ in the wind Treasury are attempting to remain relevant,

    For it’s own survival,(not that i am overly enthused about that prospect), capitalism must find the means to redistribute a larger part of it’s profits directly to those in society who possess the least and such a means must constantly identify and provide the mechanism of such delivery on an ongoing basis…

  6. tracey 6
    16 February 2013 at 2:08 pm

    our current system assumes the wealthy will share their wealth. when the top 100 earners pay little or no tax we know the assumption is fallacious.

    couple that with the notion that a billionaire who gives away 100m in pursuit of a knighthood is more generous than the minimum wager who gives 500 bucks a year to charity then what chance we

  7. Maggie May 7
    16 February 2013 at 2:46 pm

    John Key wants inequality.

    I think Nationals plan is to have a pool of uneducated factory workers receiving low wages.

    • Rogue Trooper 7.1
      16 February 2013 at 2:50 pm

      nice photo

    • Blue 7.2
      16 February 2013 at 5:57 pm

      We have that now. The reason that uneducated factory workers receive low wages is because……. they’re “uneducated”, have low skills and perform menial low skill tasks.

    • Colonial Viper 7.3
      16 February 2013 at 6:00 pm

      The market doesn’t care for anyone who can’t make big bucks for capitalist owners.

  8. Mary 8
    16 February 2013 at 3:18 pm

    I remember reading a Treasury report that said “life on a benefit is hard” and then went on to recommend axing a whole stack of benefits and allowances.

    • Colonial Viper 8.1
      16 February 2013 at 3:22 pm

      Well, they wouldn’t want people to think that they didn’t have a social conscience.

  9. Peter 9
    16 February 2013 at 4:53 pm

    If a 20 year old earns $15 an hour and work for 40 years and manages to save 10% of their income all their working life at 5% interest they will have $400,000 or so in savings assuming no tax. If a 20 year old wins $1,000,000 without saving any additional cash during their life they would have a gross amount of some $7,000,000 after 40 years. If 30 something Trevor, the luck Lotto winner, saves $20,000,000 of his $26,000,000 he will “retire” at 60 with $89,000,000 assuming no tax.

    If we tax the interest earned over these years the 20 year old would pay something like $29,000 in tax. The millionaire about 1.9 million and Trev pays about 20 million.

    Is this unfair? Is it unequal? Who has made the greatest contribution to society?

    • Blue 9.1
      17 February 2013 at 12:18 pm

      Tax doesn’t measure contribution to society, only income. Contribution is based on perception and perspective. A wealthy business owner over 40 years will employ, probably hundreds of people, is his contribution less than those he employs? Your use of a Lotto win scenario is fascile.

      • Colonial Viper 9.1.1
        17 February 2013 at 12:56 pm

        Tax doesn’t measure contribution to society, only income.

        Wrong. Parasitic income and parasitic profits are huge drains on the wider society.

        A wealthy business owner over 40 years will employ, probably hundreds of people, is his contribution less than those he employs?

        He will also have made tens of millions of dollars from his enterprise, after tax. He benefitted the most from society, and should therefore certainly pay the most for that benefit.

      • Peter 9.1.2
        17 February 2013 at 1:55 pm

        Equality and equity are also based on perspective and perception. What’s your perspective?

        Tax is a function of income If you are paying taxes used for the collective good surely it is a measure of contribution to society?

        Lotto is used just to provide a starting point.

        • Colonial Viper 9.1.2.1
          17 February 2013 at 2:03 pm

          Tax is a function of income

          In NZ it should also be a function of wealth 😉

        • McFlock 9.1.2.2
          17 February 2013 at 2:12 pm

          “Tax is a function of income If you are paying taxes used for the collective good surely it is a measure of contribution to society?”

          Tax is a proportion of income.
          The source of that income might be positive or negative to the rest of society.
          Take the Meth producer who earns $3mil/ year. The damage caused by their income source would be greater than the social services funded by the tax on the laundered revenue.

          Similarly, a nun who teaches all her life and owns nothing would pay very little tax. But who makes the biggest contribution?

          Money does not equal worth.

  10. Ad 10
    16 February 2013 at 5:15 pm

    In my coarse view New Zealand now has a set of lives and subcultures that increasingly do not intersect.

    1. The Shareholders
    Those earning over $150,000 per person, with multiple properties and regular trips, who glide over the world and who can be seen in Life and Leisure magazine. Most likely found in Matakana, North Shore, Remuera, and Palm Beach. Or retiring to Cornwall. Frightfully fit, or at least vain.

    2. The Educated bourgeoise property owners.
    Have degrees, salaries, as much mobility as they could wish for, live in inner, East, and Auckland and North Shore and North Auckland, plus the few remaining in Maori Hill, Karori, Khandallah. Best calibrated by the quality of their landscaping and age of their car. Retiring to Wanaka, Arrowtown, Queenstown, Tauranga, and Gold Coast. With standard “economic conservative and moral liberal” values, at least deep into the evening.

    3. The Rural Conservative
    Live in smaller towns, highly sensitive to commodity and dollar-cross shifts. A decreasing strata found in Balclutha, Gore, Hawkes Bay, Bay of PLenty, Waikato, Masterton, and Kerkeri.

    4. The Outsiders
    The strata who live in the black or grey economies, often rural in Northland or North Island East Coast, bumping along the bottom, living from cash job to cash job with no thought for mobility. Often found in the urban-rural villages such as Waikato Heads, Ahipara, Houhora, deep forested enclaves, Golden Bay, and Coromandel village.

    5. The Unstable
    Those one injury or one bad payday away from bankruptcy or credit card default, under incredible daily stress. Found everywhere one cares not to look, but particularly in places such as Mataura, Manurewa, Avondale, Dunedin South, the far north. And out of rural slums, around Kawerau and other dying towns, in all the jails, often out of inchoate desperation or damage to one’s own life.

    6. The Old Poor
    In rest homes of dubious quality, particularly in Auckland’s west, Tauranga, Dunedin’s periphery, utterly beholden to the state’s largesse, quickly draining through their equity if they had any, sustained within incredible solitude and resultant institutionalised neuroses. Often with one partner dead. Have Readers’ Digests in their toilets for reading.

    7. The Old Doughty
    Those who had retired, kept their house, garden towards daily self-sufficiency through a lifetime of frugality, bump along on the NZSuper reasonably, whose parents and they themselves instilled astonishing discipline in to their daily lives, and who have dedicated this same ethic to their children, who have largely left the country. Still bottle their own fruit. Often retired public servants from a bygone age, such as teachers.

    8. The Immigrant Family
    A relentless telic drive to redemption through work that enables at least one of their children to gain
    mobility to at least one of the classes above, keeping at bay the shame of ever returning to the origin country, but largely sustaining multiple jobs, if they get them, on close to minimum wage. Whose children gain some of this drive in turn, or fall into and out of the underworld.

    9. Highly mobile Greeny Liberals
    Found generally in Grey Lynn, Titirangi, Aro Valley, and a few in Ponsonby. The have huge expectations, great hope in the redemptive capacity of New Zealand’s musical digital, and visual arts, and buy everything possible at farmers markets. Subscribe to Good Magazine. Have some intersection with the Outsiders if they are individual contractors to the creative sector.

    You can see by the way I have framed them which cultures are in the ascendant, which in the decline. The census will show this mobility in stark relief. Each one of those is a kind of politics; each crudely drawn. We know who we are, who has been missed out.

    The normative direction to the original post is: who do we want more of? What kind of people are we becoming? Do we like it? Can we really do anything about it?

    For me the deeper questions are along: does MMP and fractal democratic representation simply ameliorate splitter capitalism? Would FPP make mobility-from-poverty and mobility-from-middleclass more stark?

    And after that: is our political system now so weak in its instruments that fewer and fewer will be able to change their strata?

    • karol 10.1
      16 February 2013 at 5:25 pm

      Oh. Interesting, but I must be “The Invisible” – don’t see myself in any of those categories…. maybe a bit of several.

    • r0b 10.2
      16 February 2013 at 5:48 pm

      Interesting Ad. Can I put that up as a guest post tomorrow?

      • Ad 10.2.1
        16 February 2013 at 6:47 pm

        Yes. Add an intro and some links to your inequality stuff as well please; my intent was to broaden out your discussion from straight vertical income calibrations to this kinds of lives we see ourselves within, and how inequality might matter to all of them. One of Treasury’s core missions is to make us all wealthier. But “wealthier” might express itself in different realms and definitions of personal freedom and generative activity.

      • Afewknowthetruth 10.2.2
        16 February 2013 at 10:57 pm

        Apparently several regions of NZ no longer exist, one of them being a prime driver of the NZ economy.

        Just goes to show how little most people know or think.

    • xtasy 10.3
      16 February 2013 at 11:13 pm

      Excellent comment!

    • xtasy 10.4
      16 February 2013 at 11:15 pm

      I am not sure, but I seem to miss the most hated underlings in the country now, being the most discriminated against, the horrible, ghastly, inhuman and untouchable “beneficiaries”, am I right or wrong here?

  11. tracey 11
    16 February 2013 at 6:54 pm

    Infused, reading is a skill. Thanks to those posting the link and reading my entire comment

  12. xtasy 12
    16 February 2013 at 11:05 pm

    Hi Ben, thanks for another post here.

    I am by the way still waiting for some replies from you to some points I made in your earlier post under:

    http://thestandard.org.nz/wrong-wrong-wrong/

    And I am also still waiting for some further explanations from Annette King re the Labour housing plans and policies, which I asked a long time ago, same as answers from dear old David, the Shearer, that is, re welfare, the “sickness beneficiary roof-painter”, and even from Darian Fenton, who paid us a visit not so long ago, commenting on one or two things but also leaving most of us in the dark on what Labour now really stands for.

    Are you now defending Treasury for some odd remarks or comments – one of them may have made or put into a report?

    So apart from that, is Labour then committed to make the “living wage” part of its program now, or is this just another opportunistic bit of jumping on the bandwagon, to get some publicity and “sexy” political appeal?

    We all like a more egalitarian society, and I know Labour would like to increase the minimum wage and do a few other bits.

    But apart from that, is Labour committed to do this, to reverse the draconian, unjust welfare reforms that Bennett and Nats are pushing through, are you going to increase benefits also, so that beneficiaries are not forced to start chewing off the soles of their shoes and rims of hats, to fill stomaches?

    • Ben Clark 12.1
      17 February 2013 at 12:00 am

      Hi xtasy,
      I don’t think i’m particularly “defending” treasury, just pleased if they can think beyond GDP growth. I’d personally like it if they vetted all policies for social & environmental sustainability, rather than just “fiscal responsibility”.

      I know David Shearer has been championing the Living Wage from as soon as he became leader, so this is no flash in the pan.

      As far as Labour’s policies, they are in flux as they are every time between elections. The 2011 manifesto stands until superceded. I cannot speak for the leadership, as I’m not part of them – I’m not an MP and I don’t even live in Wellington.
      But I certainly know that they’re unhappy about National’s beneficiary attacks and legislation and have been fighting it. They certainly don’t envisage being a National-lite on beneficiary attacks and legislation. They do want to get people into work – you may have noticed the unemployment figures, there are a lot of people out there who want work who can’t find any currently. We certainly shouldn’t be worrying about forcing the unwell etc into work currently when there are sooo many desperate for work who can’t get jobs. (National’s obsession with this I cannot understand).
      Personally I think the UK situation you mentioned in the other post (sorry missed your later comment) is abominable – the outsourcing to private firms of forcing the unwell into work has not just resulted in terrible corruption but was morally wrong. And yes, introduced by UK Labour (if sped up by the Tories). But UK Labour is not NZ Labour, and I can’t imagine a similar scheme being put in by Labour here.
      So I’m not quite sure of what your worry is.

      On one other issue you’ve raised – reversing Ruthanasia’s nasty benefit cuts in 1991 – I’d love to see that, but don’t know Labour’s policy on this. I know most members would like to see that – it usually comes down to political sellability I understand… which is not to say what’s right, but what’s reality. One could have a long argument about both sides of that, but I’m not going to…

      Good night…

      • xtasy 12.1.1
        17 February 2013 at 12:05 am

        Ben – thanks for your response.

        Not being an MP or in the close circles up there in the Wellington Labour caucus and elite, that seems to allow you to speak a bit more freely. I welcome that.

        I continue to be cautious with Labour, as speeches by Ardern and others have been far too vague for me, despite of “criticism” uttered.

        I will watch this space with great interest.

        Have a good night also!

        X

      • felixviper 12.1.2
        17 February 2013 at 12:35 am

        “On one other issue you’ve raised – reversing Ruthanasia’s nasty benefit cuts in 1991 – I’d love to see that, but don’t know Labour’s policy on this.”

        Seriously Ben, you don’t know? Neither do I, but those nine years in govt and subsequent 4 years in opposition with narry a whisper, a nudge or a wink in that direction gives us both a fair idea, I reckon.

        • xtasy 12.1.2.1
          17 February 2013 at 12:41 am

          “I know most members would like to see that – it usually comes down to political sellability I understand… which is not to say what’s right, but what’s reality.”

          Ben did not respond to my challenge in the other thread, that Labour should not let the media get away with misinforming the public. And I even argued that Labour (as the caucus and leader are at present) may even find it convenient to have the media influence the public as they do.

          NO answers, no reason given to challenge the media, just more alignment with “mainstream talk”, dictated by “mainstream media”, really.

          It is NOT a good sign at all, Felix.

      • Colonial Viper 12.1.3
        17 February 2013 at 12:38 am

        I think Mary over the last couple of weeks has consistently raised pertinent issues relating to Labour’s right wing benefit changes e.g.

        Many have been asking Labour what its position on social security is now for almost five years, including whether it regrets abolishing the special benefit in 2004 and introducing certain aspects of its Social Security Amendment Act 2007. To date no Labour MP has answered any of these questions. The old adage about how a government treats its poor still holds good today. Labour’s track record on welfare since 1999 and its silence on its current policy has turned a lot of people away from Labour, and quite rightly so.

        http://thestandard.org.nz/living-together/#comment-583820

        I know most members would like to see that – it usually comes down to political sellability I understand…

        Ben I believe that this is the kind of comment which makes people cynical about Labour, and also demonstrates that the majority of politicians and political thinkers aren’t the leaders that they fancy themselves as being, they are followers. I’m going to go so far as to amend your comment to be more complete; feel free to dispute this change if you think it’s incorrect:

        I know most members would like to see that – it usually comes down to political sellability to the right wing Main Stream Media and comfortable middle class swing voters I understand…

        • karol 12.1.3.1
          17 February 2013 at 7:31 am

          CV amendment:

          I know most members would like to see that – it usually comes down to political sellability to the right wing Main Stream Media and comfortable middle class swing voters I understand…

          That’s how I see it, CV. And I also think it’s part of the reason (if not the main reason) so many people have given up voting, with a large proportion of them being Labour voters in the past.

          It’s time that the parliamentary wing of Labour started engaging directly with the whole specturm of potential voters instead of talking to them via the MSM filter, and middle class aspirations.

      • xtasy 12.1.4
        17 February 2013 at 2:25 am

        Ben, one day you will understand, you will see our point, and you may well join us, to lead this country into the right direction. I cannot see it now, but it may well happen. Good night X

      • Draco T Bastard 12.1.5
        17 February 2013 at 8:54 am

        …which is not to say what’s right, but what’s reality.

        Then it has to be sold as being both right and reality. And that means pointing out that we can afford it and that all those that oppose it just want to keep NZ down. None of this compromise BS that leads us to even more deprivation and inequality.

      • Blue 12.1.6
        17 February 2013 at 12:22 pm

        ” reversing Ruthanasia’s nasty benefit cuts in 1991 ” FFS Ben, Labour had 9 years to do that and it never crossed their minds once, because they tacitly agreed with it, but didn’t have the courage to say as much.

        • Colonial Viper 12.1.6.1
          17 February 2013 at 12:33 pm

          According to Mary Labour also cancelled the Special Benefit in 2004, and introduced a raft of changes in their social welfare amendment legislation in 2007 forcing beneficiaries to jump through many more hoops to keep their benefits.

          I’m not familiar with the detail of those above events, but they both sound pretty shit.

        • Descendant Of Sssmith 12.1.6.2
          17 February 2013 at 2:23 pm

          Nah it crossed their minds. They made a conscious and very deliberate decision not to do it.
          They did reverse the super cuts however.

          Cost wasn’t the deciding factor either because it would have been cheaper to put it back on benefits than on super.

          Concern for the poorest wasn’t a factor either cause beneficiaries were poorer than super annuitants.

          That sort of leaves vote chasing and political expediency.

  13. xtasy 13
    17 February 2013 at 12:47 am

    “I know David Shearer has been championing the Living Wage from as soon as he became leader, so this is no flash in the pan.”

    That is what “Ben” just commented.

    Now when Shearer became leader of Labour, I remember well, the “living wage” was considered by many to be around $ 16 an hour, as unions also thought.

    Now that could well mean, Shearer may stick with that, and that level, so that means, his view of the “living wage” is rather at $ 16 an hour, than what the advocates for an increase are NOW proposing ($18.40).

    It pays to watch and read every word carefully, to read between the lines and dissect comments.

    So yes, Shearer will be in favour of increasing the minimum or living wage to that, as that is what he said already years ago, where $ 15 an hour was asked. Nobody would argue with that, but I doubt that Shearer will support close to $ 19 an hour.

    On that I would even agree with Shearer, as such a hike would create real issues in the economy, but at least Shearer should be honest about it, same as Labour members commenting here.

    Clearly they continue to dodge the real questions, issues and asked for answers!

    • Colonial Viper 13.1
      17 February 2013 at 12:52 pm

      That is what “Ben” just commented.

      NB Ben Clark is known on The Standard as MP David Clark’s brother.

  14. Descendant Of Sssmith 14
    17 February 2013 at 8:11 am

    Remember too there was another nasty little cut in there as well – applying the lower youth rate up to the age of 24.

    All basic benefit rates should be the same and should be the same as NZS.

    There’s no justification for differences in rates based on age.

    • Colonial Viper 14.1
      17 February 2013 at 2:25 pm

      What year did this youth rate age change come into effect?

      • Descendant Of Sssmith 14.1.1
        17 February 2013 at 4:13 pm

        1992 NZ yearbook still shows for want of a better word adult rate at age 20, 1993 yearbook shows that adult rate now kicked in at 25.

        I’d think it was part of the 1991 changes with maybe a kick in at the start of a tax year maybe.

        Yearbook is light on details.

  15. RedBaronCV 15
    17 February 2013 at 9:44 am

    There are parts of the 1991 cutting scenario that are not strictly benefits, that could be reversed, I would have thought without too much political outcry..

    Prior to 1991, child maintenance was paid over to people who claimed the DPB so they received both lots of money. Post 1991 the state took any payments for child support and offset this against the DPB. At best the state has picked up about $75m a year and all of that has come from children.
    Normal Nact attitude of pounding women and children.

    If they went for “pass thr”, handing money over that is collected from paying parents, maybe at a 75% rate rising to 100% this creates some incentive for receiving parents to chase down those who are hiding funds and not paying sufficent. The downside is the judiciary who see the DPB as an excuse for relieving him from paying for his kids.

    Should this money if passed thr’ be used to abate the benefit (as it’s tax paid does it gross up?) I’m not sure how funds like this are currently treated.

  16. Descendant Of Sssmith 16
    17 February 2013 at 12:45 pm

    Child Support replaced two schemes LPC which was compulsory when one parent was getting DPB and maintenance which was a voluntary agreement or I think at times court decided decision on maintenance.

    LPC was to help pay for the cost of the benefit.

    My understanding is that if the benefit abates to a rate that is lower than the child support then the difference should be paid to the parent with the children.

    What I don’t know is how IRD does this or whether things like arrears not paid would be collected first.

    I do know my ex brother in law can build a house and go overseas but doesn’t pay a cent in child support – it’s great to have family trusts ain’t it

    • RedBaronCV 16.1
      17 February 2013 at 2:47 pm

      Hey DoSS.
      I went away and had a slightly better look:

      Yes if the child support exceeds the benefit then the extra is paid over and the number of people who receive extra “drum roll” is 3. out of 100,000.

      While I wasn’t dealing with all the detail, but in 1991 the old liable parent act seemed to be a farce that wasn’t enforced. Most seemed to be getting some form of agreed or court ordered maintenance ( not really labeled as either spousal or child) which was retained whether they worked or were on a benefit.
      This was the money the CS Act took over from and diverted to government coffers in the case of a benefit recipient.
      The courts in a series of dreadful decisions, there was plenty of comment at the time, ignored the scope of the Act ” an act to support a minimum amount of child support payable” .and made it effectively the only amount payable.

      As to your bro in law, the bene bludger, lots of us have one of those. The IRD have the specific power to chase stuff in family trusts but they don’t use it. They spend most of their time arguing that people don’t have to pay.

      • Descendant Of Sssmith 16.1.1
        17 February 2013 at 4:22 pm

        My memory was that all sole parents on a benefit had LPC collected. In the 80’s you pretty much had to get a note from a lawyer plus a visiting Dsw worker to your home to get DPB.

        Fathers were also more likely to be known. I would think most people got hit for LPC. Some of course might only be paying it now as they go on NZS as with their maintenance payments.

        I was talking to a 62 year old women recently who was most surprised that she is now getting what she should have got 40 years ago. Not worth much now but she thinks it must be annoying him tremendously to have to pay it.

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