Social Security (Financial Assistance for Caregivers) Amendment Bill

Social Security (Financial Assistance for Caregivers) Amendment Bill

Government Bill

308—1

Explanatory note

General policy statement

This Bill amends the Social Security Act 2018 (the Act) in order to implement 2 initiatives that improve financial assistance for caregivers that receive the orphan’s benefit (the OB) and unsupported child’s benefit (the UCB). This will benefit the children in their care.

Background

Caregivers in New Zealand provide day-to-day care for around 22,000 children whose parents are unable to care for them. Many caregivers are members of a child’s whānau or extended family and have stepped up to take on the care of a child when their parents are unable to do this. The majority of children for whom these payments are made are Māori, and a significant proportion of their caregivers are also Māori.

Financial assistance for caregivers consists primarily of—

  • the OB and UCB, which are administered by the Ministry of Social Development, for children living with caregivers outside the State care system; or

  • the foster care allowance (the FCA), which is administered by Oranga Tamariki—Ministry for Children, for those caring for a child in State care.

These payments are governed by the Act and the Oranga Tamariki Act 1989 respectively. While the FCA supports children who are in State care, the OB supports children whose parents have died, are missing, or have a long-term disablement. The UCB supports children who have had a family breakdown.

Changes to caregiver payments have not always kept pace with societal changes, and the payment system as a whole has never been fully reviewed. In May 2019, Cabinet agreed to the first comprehensive review of financial assistance for caregivers. This review was led by Oranga Tamariki—Ministry for Children.

In December 2019, Cabinet agreed to a response to the review, which included setting the strategic direction for the system of financial assistance for caregivers through a set of overarching objectives and principles. The initiatives in the Bill seek to make progress towards the following principles:

  • regular, standardised payments should be available to, and accessible by, caregivers who provide the day-to-day care of children whose parents are unable to care for them; and

  • there should be no disparity in the standardised payment rate provided to support a child in the State care system and a child living with a caregiver outside that system whose parents are unable to care for them.

In May 2020, a $210 million package of support was funded from the COVID-19 Response and Recovery Fund to ensure there continued to be safe and stable homes for children living with caregivers.

The Bill makes amendments to the Act in order to implement 2 of the initiatives, which are—

  • extending eligibility for the OB and UCB to caregivers who may provide care for less than 12 months (by removing the 12-month rule); and

  • extending the Christmas and birthday allowances to caregivers receiving the OB and UCB at the same rates as those received by caregivers receiving the FCA.

Extending eligibility for OB and UCB to short-term caregivers (removing the 12-month rule)

One of the current criteria for accessing the OB and UCB under the Act is that the caregiver must be likely to be the principal caregiver of the child for at least 1 year from the date of the application for the payment (the 12-month rule).

In practice, it means there are caregivers who take on the care of a child, often in difficult or short-term situations where there is little other choice, who are unable to access financial assistance to help them provide care. This is despite the fact that they, like other caregivers, have taken on primary responsibility for the day-to-day care of the child when that child’s parents are unable to care for them.

The Bill addresses this barrier by removing the minimum time period requirement for a caregiving arrangement to qualify for the OB or UCB and associated payments. The eligibility criteria for the OB and UCB are outlined in sections 44 and 47 of the Act. This amendment will take effect for all new applications for the OB and UCB on or after 1 July 2021. It will also apply to applications that have been made, but have not been decided under section 301 of the Act, before that date.

Extending Christmas and birthday allowances to caregivers receiving OB or UCB

Caregivers receiving the OB or UCB currently do not receive the birthday and Christmas allowances that are available to caregivers receiving the FCA. This means that caregivers receiving the OB or UCB pay for these costs out of their own pocket or, if they are unable to, the children in their care go without. This disparity in payments contributes to the inequities between the levels of financial assistance provided to caregivers caring for children outside of the State care system, compared with those caring for children in State care.

Being able to celebrate and enjoy significant events in a child’s life is an important part of being able to provide children who are unable to live with their parents with the same experiences as other children. It also contributes to their overall well-being, identity, and feeling of inclusion within a family, and placement stability and resilience, which are even more critical during this time.

The Bill amends the Act to establish these 2 allowances for caregivers receiving the OB or UCB at the same rate as for caregivers receiving the FCA. The Bill adds the new allowances to Part 4 of Schedule 4 (for the OB) and Part 5 of Schedule 4 (for the UCB) of the Act.

The Christmas allowance will start in December 2021 and the birthday allowance will start for birthdays in January 2022.

Departmental disclosure statement

Oranga Tamariki—Ministry for Children is required to prepare a disclosure statement to assist with the scrutiny of this Bill. The disclosure statement provides access to information about the policy development of the Bill and identifies any significant or unusual legislative features of the Bill.

Regulatory impact statement

Oranga Tamariki—Ministry for Children, in consultation with the Ministry of Social Development, produced a regulatory impact statement on 10 June 2020 to help inform the main policy decisions taken by the Government relating to the contents of this Bill.

Clause by clause analysis

Clause 1 is the Title clause.

Clause 2 is the commencement clause. The Bill comes into force on 1 July 2021.

Clause 3 provides that the Bill amends the Social Security Act 2018.

Part 1Substantive amendments

Clause 4 repeals section 44(e). This repeal removes the 12-month rule from the eligibility criteria for the orphan’s benefit. The current criterion under section 44(e) is that the caregiver is likely to be the principal caregiver of the child for at least 1 year from the date of application for the orphan’s benefit.

Clause 5 repeals section 47(e). This repeal removes the 12-month rule from the eligibility criteria for the unsupported child’s benefit. The current criterion under section 47(e) is that the caregiver is likely to be the principal caregiver of the child for at least 1 year from the date of application for the unsupported child’s benefit.

Clause 6 amends Part 4 (orphan’s benefit) and Part 5 (unsupported child’s benefit) of Schedule 4 (rates of benefits). The amendments provide for a Christmas allowance and birthday allowance to caregivers receiving an orphan’s benefit or unsupported child’s benefit. The allowances are in the same amount or at the same rate as those paid under section 363 of the Oranga Tamariki Act 1989 to caregivers receiving the foster care allowance. The allowances for caregivers receiving an orphan’s benefit or unsupported child’s benefit would be payable as follows:

  • the Christmas allowance is payable for December 2021 and every subsequent December:

  • the birthday allowance is payable for a child’s birthday in 2022 and subsequent years.

Part 2Transitional, savings, and related provisions

Clause 7 amends Schedule 1 (transitional, savings, and related provisions) by inserting the new Part 6 set out in the Schedule of the Bill.

Clause 83 of new Part 6 makes clear that the revised eligibility criteria apply to applications for the orphan’s benefit or unsupported child’s benefit that are made, but not decided under section 301 of the Act, before 1 July 2021, as well as new applications (on or after 1 July 2021).

Clause 84 of new Part 6 makes clear that the Christmas allowance applies to existing caregivers and new caregivers who receive the orphan’s benefit or unsupported child’s benefit.

Clause 85 of new Part 6 makes clear that the birthday allowance applies to existing caregivers and new caregivers who receive the orphan’s benefit or unsupported child’s benefit.

1 Title

This Act is the Social Security (Financial Assistance for Caregivers) Amendment Act 2020.

2 Commencement

This Act comes into force on 1 July 2021.

3 Principal Act

This Act amends the Social Security Act 2018 (the principal Act).

Part 1 Substantive amendments

4 Section 44 amended (Who is eligible caregiver)

Repeal section 44(e).

5 Section 47 amended (Who is eligible caregiver)

Repeal section 47(e).

6 Schedule 4 amended

(1)

In Schedule 4, Part 4, replace clause 3 with:

Allowances
3The following allowances in respect of the child:
(a)on and after 1 July 2018, a clothing allowance; and
(b)on and after 1 December 2021, a Christmas allowance that is payable—
(i)for the month of December; and
(ii)for December 2021 and every December after that; and
(iii)to a caregiver who is entitled, or is expected to be entitled, to the orphan’s benefit for the child on Christmas Day in the applicable year; and
(c)on and after 1 December 2021, a birthday allowance that is payable—
(i)for the month of, or the month before the month of, the child’s birthday; and
(ii)for the child’s birthday in 2022 and every year after that; and
(iii)to a caregiver who is entitled, or is expected to be entitled, to the orphan’s benefit for the child on the child’s birthday in the applicable year.
4The allowances are in the same amount or at the same rate as the clothing, Christmas, and birthday allowances specified under section 363 of the Oranga Tamariki Act 1989 for the rates of payment to persons or organisations in whose charge a child or young person is placed under section 362 of that Act.
5The allowances are in addition to the applicable rate in clause 1.

(2)

In Schedule 4, Part 5, replace clause 3 with:

Allowances
3 The following allowances in respect of the child:
(a)on and after 1 July 2018, a clothing allowance; and
(b)on and after 1 December 2021, a Christmas allowance that is payable—
(i)for the month of December; and
(ii)for December 2021 and every December after that; and
(iii)to a caregiver who is entitled, or is expected to be entitled, to the unsupported child’s benefit for the child on Christmas Day in the applicable year; and
(c)on and after 1 December 2021, a birthday allowance that is payable—
(i)for the month of, or the month before the month of, the child’s birthday; and
(ii)for the child’s birthday in 2022 and every year after that; and
(iii)to a caregiver who is entitled, or is expected to be entitled, to the unsupported child’s benefit for the child on the child’s birthday in the applicable year.
4The allowances are in the same amount or at the same rate as the clothing, Christmas, and birthday allowances specified under section 363 of the Oranga Tamariki Act 1989 for the rates of payment to persons or organisations in whose charge a child or young person is placed under section 362 of that Act.
5The allowances are in addition to the applicable rate in clause 1.

Part 2 Transitional, savings, and related provisions

7 Schedule 1 amended

In Schedule 1, after Part 5, insert the Part 6 set out in the Schedule of this Act.

Schedule New Part 6 inserted into Schedule 1

s 7

Part 6 Provisions relating to Social Security (Financial Assistance for Caregivers) Amendment Act 2020

83 Transitional provision relating to eligibility criteria for orphan’s benefit or unsupported child’s benefit

(1)

The repeal of section 44(e) by the Social Security (Financial Assistance for Caregivers) Amendment Act 2020 applies to a person—

(a)

who makes an application for an orphan’s benefit for a child on or after 1 July 2021; or

(b)

whose application for an orphan’s benefit for a child was made, but not decided under section 301, before 1 July 2021.

(2)

The repeal of section 47(e) by the Social Security (Financial Assistance for Caregivers) Amendment Act 2020 applies to a person—

(a)

who makes an application for an unsupported child’s benefit for a child on or after 1 July 2021; or

(b)

whose application for an unsupported child’s benefit for a child was made, but not decided under section 301, before 1 July 2021.

84 Transitional provision relating to Christmas allowance

Clause 3(b) of Part 4 or 5 of Schedule 4 (as inserted by the Social Security (Financial Assistance for Caregivers) Amendment Act 2020) applies to a caregiver who becomes entitled to the orphan’s benefit or unsupported child’s benefit before, on, or after 1 December 2021.

85 Transitional provision relating to birthday allowance

Clause 3(c) of Part 4 or 5 of Schedule 4 (as inserted by the Social Security (Financial Assistance for Caregivers) Amendment Act 2020) applies to a caregiver who becomes entitled to the orphan’s benefit or unsupported child’s benefit before, on, or after 1 December 2021.