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Benefit application denials based on partner's income skyrocket following pandemic

The number of people being denied benefits because their partner earns too much has skyrocketed.

The Ministry of Social Development (file photo). Source: rnz.co.nz

Job seeker benefits can be cut to nothing depending on partners' incomes - despite recommendations by the Government's own Welfare Expert Advisory Group (WEAG) to scrap the rule.

The number of people being refused benefits because of their relationship status jumped to 414 during April - having been less than 80 for the three months prior.

ActionStation campaigner Ruby Powell said that was just the tip of the iceberg.

"A lot of people will go online to the Work and Income website, put in their details and be told they won't be able to get any welfare support."

Last year, WEAG recommended that benefits be individualised.

WEAG chairperson Cindy Kiro said: "I watch in despair as people are desperate for food and desperate for help, but it was frustrating to watch pre-Covid, because I thought the need is so high out there. It would've been good if we could move that dial earlier".

Covid-19 has put immense pressure on New Zealand's welfare system with more than 43,500 people going on the job seeker benefit between February and May.

The existing jobseeker benefit is set at a maximum of $250 after tax.

'It makes you kind of feel like you're being punished'

Brittany Maclean lives in Rotorua and has rheumatoid arthritis - making it nearly impossible for her to work in most jobs.

But she can't get a benefit because she lives with her partner and he earns around $945 per week before tax.

"After paying a third of our income in rent, another third if not two-quarters on bills, each week we have about $150 for groceries, petrol, medical supplies - all of that other junk that isn't a cost of life."

While jobseeker benefits taper off once a person and their partner earn more than $90 per week, a new $490 weekly payment for people who have lost their jobs due to Covid-19 is not impacted unless their partner earns more than $2000 per week.

Ms Maclean said that seemed particularly unfair.

"I understand losing your job due to Covid is really hard but these are people who have had combined incomes for a long time - they've probably got a lot more savings than we do.

"It makes you kind of feel like you're being punished and I didn't choose to be born with arthritis, it's not something I asked for in my life."

Ms Kiro said now was the time for change.

"I think Covid could actually be a good catalyst for implementing some of the things that needed to be done.

"There has been a shift in public attitude which is good and there is a need to address sustainable and survivable income levels - particularly for the most vulnerable."

In a statement, the Minister for Social Development Carmel Sepuloni said she would begin further policy work on relationship settings in the welfare system later this year.

A spokesperson would not give a timeline for this, or whether it might happen before the September Election.

rnz.co.nz