The Social Services and Community Committee has examined the Social Security (Financial Assistance for Caregivers) Amendment Bill and recommends that it be passed with the amendments shown.

This bill would amend the Social Security Act 2018 to extend financial assistance for caregivers of children who are unable to be cared for by their parents and who are outside the State care system. It would make two changes to remove disparities between the types of financial assistance available for caregivers.

Caregivers can receive one of three main types of financial assistance: the Orphan’s Benefit (OB), the Unsupported Child’s Benefit (UCB), or the Foster Care Allowance (FCA). The first two are for children living with caregivers outside the State care system. These allowances are administered by the Ministry of Social Development (MSD) under the Social Security Act. The OB supports children whose parents have died, are missing, or have a long-term serious disability. The UCB supports children where there has been a breakdown in their family, so the child cannot be cared for by their parents or their parents cannot fully provide support to the child.

The FCA, in contrast, is for those caring for a child in State care. It is administered by the Ministry for Children–Oranga Tamariki under the Oranga Tamariki Act 1989.

The bill’s changes aim to reduce disparities within the caregiver payment system by bringing the OB and UCB in line with the financial assistance provided by the FCA. For caregivers to be eligible for the OB or UCB at present, alongside other criteria, it must be likely that they will be the child’s principal caregiver for at least one year (the 12-month rule). The bill would remove the 12-month rule. This would allow caregivers to receive the OB or UCB when the expected period of care was short-term, unknown, or uncertain. The bill would also establish a Christmas allowance and birthday allowance for caregivers receiving the OB or UCB. At present, they do not get these allowances. In contrast, the FCA is not subject to the 12-month rule, and includes Christmas and birthday allowances.

As part of our consideration of the bill, we have examined its consistency with principles of legislative quality. We have no issues regarding the legislation’s design to bring to the attention of the House.

This commentary covers the main amendments we recommend to the bill as introduced. We do not discuss minor or technical amendments.

The Social Security Act requires that recipients of the OB or UCB must be considered the child’s principal caregiver.¹ MSD must believe that the person has “the primary responsibility for the day-to-day care of the child, other than on a temporary basis”.² We see some difficulty with this provision as it requires that the period of care must be long-term or permanent. It could prevent caregivers from being eligible for the OB or UCB if they are caring for a child who is unable to be cared for by their parents for a short-term, unknown, or uncertain period of time. This goes against the policy intent of the bill to extend eligibility to short-term caregivers (achieved by removing the 12-month rule).

We recommend amending the bill to ensure that eligibility for the OB and UCB includes caregivers who are caring for a child who is unable to be cared for by their parents for a short-term, unknown, or uncertain period of time. The caregiver would still need to have primary responsibility for the day-to-day care of a dependent child. However, we decided not to suggest amending the definition of “principal caregiver” in Schedule 2 of the Social Security Act. This is because a definition change could create confusion when interpreting eligibility for other assistance available in the welfare system.

Our recommendation would insert a new subclause (1) in clauses 4 and 5 of the bill. Clauses 4(1) and 5(1) would add “or principal temporary caregiver” in sections 44(d) and 47(d) of the Social Security Act. These sections set out the eligibility criteria for a person to receive the OB or UCB. We also recommend inserting clause 5A into the bill to define “principal temporary caregiver” in Schedule 2 of the Act.

Our change would not extend eligibility for the OB and UCB to voluntary additional care arrangements made by the caregiver—where the caregiver retains the primary responsibility for the day-to-day care of the child. For example, situations that may be excluded are:

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  private arrangements for care while the parents are employed overseas or in another region

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  arrangements where a child is being raised by family members or extended family

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  care where the child is staying for short-term visits with friends or family members

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  care related to school holiday programmes and early childhood education.

We understand that MSD would provide guidance to frontline staff about how this change would work in practice.

Under the bill as introduced, a principal temporary caregiver who is entitled to and receiving the OB or UCB may not be entitled to supplementary assistance that is available to principal caregivers. The types of supplementary assistance are Childcare Assistance, Child Disability Allowance, and Temporary Additional Support in respect of the OB or UCB child.

We propose some amendments to ensure that a principal temporary caregiver who is entitled to and receiving the OB or UCB can also receive the supplementary assistance that principal caregivers currently receive. To do this, we recommend inserting clause 6A and Part 1 of Schedule 3 into the bill, to amend sections 77, 78, 82, and 424 of the Act. We also recommend inserting clause 6F and Part 2 of Schedule 3, to amend the Social Security Regulations 2018. This would ensure that a principal temporary caregiver who is entitled to and receiving the OB or UCB could also receive the supplementary assistance that principal caregivers currently receive. We also recommend inserting clause 5A into the bill, to define “temporary OB or UCB caregiver” in Schedule 2 of the Act.

We recommend changing the name of the Christmas allowance to the holiday allowance. This would more appropriately recognise that Christmas is not celebrated by all families, and would be more inclusive of other cultural and religious celebrations. We note that the payment of the holiday allowance would still be linked to the date of 25 December and paid in advance of that date.

We understand that MSD would communicate with OB and UCB recipients about when they would receive the holiday or birthday allowance, the amount that they would receive, and what the allowance is intended to cover. Recipients would be told that if they do not celebrate Christmas or birthdays, they can use the money in other ways that benefit the child. We note that the payment could be saved for other holidays that the family celebrates, such as Matariki (Māori New Year) or Chinese New Year.

Our recommendation would amend clause 6 of the bill to change “a Christmas allowance” to “a holiday allowance” in clause 3(b) of Parts 4 and 5 of Schedule 4 of the Act.

The bill as introduced specifies that the birthday and Christmas allowances (which we propose renaming as the holiday allowance) would be payable for the month of the entitlement date, or the month before. We recommend clarifying that entitlement for the allowances is linked to the date of the child’s birthday or 25 December, and is not based on the whole month. For example, if a child’s birthday was 25 August, only the caregiver who was eligible for the OB or UCB on 25 August would be entitled to receive the birthday allowance.

Therefore, we recommend amending clause 6 of the bill to remove clauses 3(b)(i) to (iii) and 3(c)(i) to (iii) in Parts 4 and 5 of Schedule 4 of the Act. We also recommend inserting clauses 6, 9, and 10 into both of those Parts. These amendments would make it clear that eligibility for the birthday allowance is linked to entitlement to the OB or UCB on the date of the child’s birthday, and eligibility for the holiday allowance is linked to entitlement to the OB or UCB on 25 December.

The bill as introduced is not clear about MSD’s ability to recover debt, if necessary. There may be situations when the birthday or holiday allowance has been paid, but the caregiver is not actually entitled to it on the child’s birthday or 25 December. This is because payments for these allowances are made in advance of the entitlement date. For example, if a child’s birthday is 25 August, MSD might pay the allowance two weeks before, on 11 August. However, if the child left the caregiver’s care on 18 August and the caregiver was not entitled to receive the OB or UCB on the child’s birthday, that caregiver would not have been entitled to receive the birthday allowance. We think that changes should be made so that MSD can recover this debt.

Therefore, we recommend amending clause 6 of the bill to insert clauses 8 and 13 into Parts 4 and 5 of Schedule 4 of the Act. We also recommend inserting clause 6D into the bill, to amend the Social Security Regulations. This would make it clear that if a person received the birthday or holiday allowance but was not entitled to it, they would need to repay this debt.

In the bill as introduced, entitlement to the holiday and birthday allowances is based on “a caregiver who is entitled, or is expected to be entitled”. We recommend clarifying that it is the expectation of MSD that is relevant to eligibility for the entitlement, and not the expectation of the caregiver.

Therefore, we recommend amending clause 6 of the bill to insert clauses 7 and 12 into Parts 4 and 5 of Schedule 4 of the Act. Our amendment would ensure that entitlement to the OB and UCB would be based on “a person whom MSD expects to be entitled”.³ This would make it clear that the expectation of entitlement to payments is that of MSD, and not of the caregiver.

MSD may also decide, under section 329(b) of the Act, to continue paying the OB or UCB up to 28 days after a child ceases to be eligible for the benefit. We recommend making it clear that a person being paid under section 329(b) is entitled to the allowances. Therefore, we recommend inserting clause 14 into Parts 4 and 5 of Schedule 4 of the Act. Similarly, we recommend that a temporary OB or UCB caregiver (as defined in our new clause 5A of the bill) would also include a person who is paid under section 329(b) of the Act.

The bill as introduced is unclear about entitlement to the birthday allowance for children born on 29 February in a leap year. We recommend clarifying that the entitlement date for these children would be 1 March. This would help ensure that MSD can make such payments.

Our recommendation would amend clause 6 of the bill by inserting clause 11 into Parts 4 and 5 of Schedule 4 of the Act.

The bill as introduced sets out that the birthday and holiday allowances are payable in advance of the entitlement date. This includes specifying that the allowances are payable for the month of, or the month before, the entitlement date. We believe that this specific wording could cause confusion between the entitlement date of allowances and when allowances are paid out. Therefore, we recommend simplifying the language in the bill to provide for payments of the allowances to be paid in advance.

Allowances are paid in advance so that caregivers can make any purchases or organise celebrations ahead of time.

Our recommendation would amend clause 6 to insert clauses 7 and 12 into Parts 4 and 5 of Schedule 4 of the Act. These clauses would enable MSD to pay holiday and birthday allowances in advance of the child’s birthday or 25 December.

We note that the Social Security Act already provides for birthday and holiday allowance payments to be made after the entitlement date. For example, this might happen if an application for the OB or UCB is pending on the entitlement date.

The OB supports children whose parents have died, are missing, or have a long-term serious disability. We suggest that the name of this benefit be reconsidered. This is because some recipients of the OB are caring for children whose parents are still alive.

The bill was developed in response to a 2019 review of financial assistance for caregivers by Oranga Tamariki. The review identified a range of issues that caregivers face, including Māori caregivers. The bill intends to address the key issues identified by the review.

The review involved consultation with Māori caregivers, as well as iwi and Māori organisations. We were advised that Oranga Tamariki will continue to consult with Māori as part of its long-term work to reform the system of financial assistance and support for caregivers. This long-term work will include consideration of how the system can be designed to take account of the needs and interests of Māori, and the importance of Māori being cared for safely within their whānau, hapū, or iwi.

We are interested to hear how consultation with Māori on this issue looks in practice and we are keen to follow the progress of this long-term work.