- Date published:
7:10 am, February 27th, 2020 - 122 comments
Categories: benefits, disability, economy, wages, welfare - Tags: chloe king, precariat, SLP, Supported Living Payment, ubi, WINZ
There seems to have been an upswing in New Zealand UBI discussions recently. While many progressives see value in a UBI and want to be rid of the punitive and soul destroying aspects of MSD and WINZ, we hardly ever talk about what would happen to disabled people (or their carers, or solo parents and others) who can’t work. Time to put welfare in the middle of the UBI debate. What we need is a UBI with welfare bolted on*.
Who wants a UBI?
Here’s what a UBI is good for, across the political spectrum.
The right: an opportunity to remove welfare (think the Bennett reforms on steroids), and control workers.
The liberal centre: an opportunity to push liberal reform of right wing economics while resisting social democracy and the left.
The centre-left: an opportunity to prevent the worst impacts of automation on the work force, by providing guaranteed, steady, low income, and to encourage better security for low income and precariat workers.
Lefties: an opportunity to provide for the precariat, and to get rid of the horror show that is WINZ without having an actual plan for people who cannot work.
Beneficiaries, the precariat, low wage workers: an opportunity to do away with punitive welfare culture, and enable fairer and higher income streams.
Of the UBI models routinely discussed in New Zealand, none I am aware of adequately solve the problem of income for people who cannot work. Either the UBI would have to be set very high, or we would be pushing tens of thousands of people into poverty.
Comparing a UBI to Welfare
To make it clear what the problem is, here’s a comparison between the current main benefit for long term disabled people who are assessed as unable to work, and the main UBI model most often discussed in NZ as a replacement for welfare.
The Supported Living Payment is $273/wk or $14,196/yr, after tax, for a single adult with no children. A UBI rate often referenced is around the same as the dole/Jobseeker rate, at $11,000/yr. That’s a 22% drop in income right there.
In addition, anyone on SLP currently also has access to the non-taxed supplementary benefits – Accommodation Supplement, Disability Allowance, and various hardship and emergency grants – that most long term beneficiaries rely on to survive. Please bear in mind that for many on SLP, existing welfare is already not an adequate amount to live on. With the supplementary benefits gone most disabled people who are unable to work would lose a large portion of their income.
My back of the envelope calculations:
That’s a difference of $15,000, or a drop of 57%.
(Have to stop here and point out that while people on SLP get $14,000/yr base benefit, there are people with the same level of long term disability on Jobseeker at $11,386. This is because of successive governments’ punitive approach to welfare and it’s a gross injustice).
Many on SLP can’t work any regular hours at all. Some people on SLP would be able to earn part time, but not enough to make up the shortfall. That $15,000 is $288/wk or 16 hours at the minimum wage of $17.70/hour. The eligibility criteria for the 93,600 people on SLP is they are unable to regularly work 15 hours or more a week.
New Zealand’s UBI models
Of the professional people promoting a UBI in NZ, Keith Rankin acknowledges the issue, but I can’t see where his solution is.
In his Big Kahuna model, Gareth Morgan actively sought to kill welfare for ideological reasons, expected that some beneficiaries would be worse off, and had no plan for disabled beneficiaries who couldn’t work apart from some vague hand wave in the direction of the state somehow providing services directly to make up for the missing Disability Allowance. But no more Accommodation Supplement, or food or hardship grants either.
The Opportunities Party followed Morgan’s lead, including designing a Youth UBI that actively discriminated against youth who are disabled and unable to work. I have been told TOP are in the process of reviewing their UBI policies, so hoping there is some change there.
Of the quick read around I did to check the current state of UBI debate in NZ, the only piece I found that stated categorically that welfare should be bolted on is this 2017 article from Danyl McLauchlan.
Managing disability support payments
The idea that the shortfall for disabled people can be made up by the Ministry of Health providing services directly is missing two critical aspects: what Disability Allowance currently covers, and the right of disabled people to have their own income just like everyone else. The key thing to understand here is the difference between having income and having access to services.
Disability Allowance is capped at $64/wk but additional costs can be partially met by the hardship grant TAS. DA is for a range of costs including things like phone rental, counselling, power and firewood, or travel to a doctor. The Ministry of Health isn’t in a position to provide for many of those things via services. It would be very odd for them to become firewood merchants for instance. If they instead provided funding, how is this different from welfare via WINZ? Or would they pay a third party (private agency or NGO) to organise provision?
For the people who think the MoH would be an improvement on WINZ, please start listening to disabled people dependent on the department about what it’s like to deal with the MoH, because they often tell a different story. Transferring management to the MoH would require recreating WINZ but in a bureaucracy with its own set of serious cultural problems.
It’s discriminatory to remove income from disabled people and expect the shortfall to be made by the state deciding what services disabled people should be allowed to access. Imagine if your boss held back 1/2 your wages and told you which budget cafe you would be allowed to get dinner from instead of being able to buy your own groceries. There is a basic principle here that people have a right to income and to make choices about how they spend that, rather than an agency being in that role. The neoliberalisation of welfare that has harmed so many has included policies trying to control what under-65 welfare recipients spend their money on, and this is something we should be absolutely resisting in a UBI model.
Disability Allowance is paid out on the basis of GP support. Were that to transfer (either as income or services) to the MoH, it’s akin to letting WINZ staff make assessments i.e. someone who doesn’t know the person or their situation. The MoH’s disability needs assessment processes are already fraught, and tied into capped budgets and restrictive eligibility criteria, as well as the internal cultural issues.
Finally, the emergency grants that most beneficiaries rely on would be gone. Need a new washing machine because the old one suddenly breaks down? Or an urgent car repair so that you can still get your kids to school? Or need help with getting to a parent’s funeral, or urgent dental work? These ‘non-disability’ things would now be expected to be met from the reduced income.
Changing the UBI debate
There are of course many benefits to a UBI, including for beneficiaries. The underlying concept of a progressive UBI is sound. A UBI with welfare bolted on meets the needs of the precariat in having steady income, as well as people who for whatever reason are unable to work (or where no suitable work is available). It has the potential to bring great benefit to disabled people who cannot work regular hours but could do intermittent work if freed up from the WINZ abatement and reporting traps.
But we are still a ways from designing a model that is fair, feasible, and tory-proofed. I support a full debate around a UBI, but let’s remember that the right want one too, and not for good reasons. The best approach I see so far is from the Greens, who want to investigate a UBI with welfare bolted on, but would reform WINZ in the meantime to remove the punitive aspects, raise benefit levels, and address pressing issues like the abatement rate (a 30 – 100% deduction rate applied to beneficiaries’ earnings) and the massive elephant in the living room that is the housing cost crisis.
I don’t know if WINZ are the right department to manage the bolted on welfare, but the MoH or IRD certainly aren’t. Ideally we need a new department, starting from scratch with none of the punitive culture that currently exists in WINZ/MSD. One that starts with the premise that humans have the right to a core standard of living and to access that without punishment or degradation.
Because of this, the UBI debate needs to centre how to design a fair and efficient welfare support system to run in tandem with the basic income. Instead of starting the conversation with the economists’ view of tax rates and maybe trying to tag on welfare as an after thought, let’s start with the full range of people who a UBI is meant to be helping.
*Thanks to Chloe Ann King for consistently voicing the need for welfare alongside a UBI, bolted on, and for being able to advocate for working people and beneficiaries at the same time.
And then from there governments implement a UBI with welfare bolted on. You wanna pull people out of poverty? The answer is simple: GIVE PEOPLE MONEY. (With no strings attached).— Chloe Ann-King (@GGrucilla) February 27, 2019