Working The DPB System
By Lindsay Mitchell
(Two years ago Lindsay Mitchell launched a campaign calling for a review of the DPB. She has since been contacted by
many people who have told her stories that reveal the ways in which the welfare system is being exploited. )
The welfare state has evolved into is a system of financial incentives for those inclined towards exploitation. This
leaves others who genuinely cannot support themselves under-resourced and bearing the brunt of shifting public
perception.
In 1970, only 30,000 working age New Zealanders were on benefits. That figure has multiplied at least twelve-fold while
the population hasn't even doubled. Only work and income staff can make an educated guess at how many people are
'milking' the system. Various comments from current and ex social welfare workers have included, "Maybe as many as half
are abusing the system," and "these people think it is their god-given right to live off the taxpayer," and "their idea
of success is how much they can get for doing nothing." A report I heard about my petition calling for a review of the
Domestic Purposes Benefit doing the rounds of a WINZ office, says it all.
The DPB, introduced in 1973 under Norm Kirk, has been the fastest growing benefit of the last thirty years, probably
because it is the most open to misuse. This misuse exploits not only the system and the working people who fund it - it
exploits children.
Why won't some 16,000 women on the DPB name the father of their child? It's not through lack of ability to identify him.
If a process of elimination is necessary, DNA testing will oblige. The process might seem draconian but it protects the
interests of falsely accused males. So why aren't fathers named more often? Because, despite a small reduction in
benefit rate applying, it is financially rewarding not to name him.
Unidentified, the father doesn't have to pay the child support that offsets the DPB payment. An average income earner of
$36,000 would be assessed by the IRD to pay around $400 a month, depending on his living costs. Having neglected to
enter the father's name on the birth certificate the couple can now come to a private arrangement whereby he pays her,
say, $200 a month. Although the mother loses $80 from her benefit, she is better off by $200 paid directly from the
father. He is better off because instead of paying $400 a month he is now only paying $200. It's the proverbial win-win
situation. Or is it?
The working taxpayer doesn't feel much like a winner. Does anyone stop to consider whether the child is a winner? It
can't be easy growing up with a father who, for all intents and purposes doesn't exist. How does the child understand
the subterfuge? What are the personal and moral lessons he learns?
Children's interests aren't paramount when it comes to manipulating the system. Take an unemployed couple that separate.
Before the split, they are living on one unemployment benefit between them. If the mother takes the children and goes on
the DPB, the father would be left on a reduced unemployment benefit and with child support to pay out of that, albeit
the payment is only $12.75 a week. But this isn't necessary. If they divide their children, they can now both do better
financially. Although both can't go on the DPB one can claim the "unemployment benefit with dependents" which happens to
pay exactly the same rate as the DPB. They can both claim family support, childcare subsidies, and accommodation
supplement and no longer have to share one benefit. The taxpayer ends up funding two households instead of one but worse
still siblings have been separated. The separation might span a few kilometres; it might span a few hundred.
No one knows how often this happens, but the Department of Work and Income could access the information if they chose to
take an interest.
A more common occurrence is the mother taking the children and ensuring there is no possibility of the father gaining
custody. To qualify for the DPB the parent has to have custody of the child or children sixty percent of the time. Many
men report false accusations of domestic violence or even child abuse made against them by an ex who wants to secure
custody to get the DPB. Around 22,000 applications for protection orders naming children were taken out between 1996 and
2001, nine out of ten by women. Application can be granted without informing the accused or holding a hearing. With the
1995 Domestic Violence Act redefining domestic violence to include "psychological abuse," these orders can be very
difficult to overturn. The growing number of estranged men forming protest and lobby groups, points to a problem of
growing proportions.
When the liable parent, usually the father, is forcibly cut-off from his children he is left wondering why he should
financially support them? After all, his children will receive the same level of assistance, whether he contributes or
not. So to avoid paying child support he has three choices: go on the dole and pay the minimum, hide his true income or
just bugger off.
If these choices sound unworthy, circumstances may make them seem morally defensible. For some liable parents these are
their only options if they want a new relationship to survive. Paying eight hundred dollars a month in child support
rules out supporting a second family. Arranging finances to hide assessable income may be a desperate act of last
resort. Again, public provision has prescribed incentives for both parents to distort the truth.
The problems don't end here. Another father described how his wife had left him and taken their children to live with
her new female partner. Because the Social Security Act 1964 doesn't recognise same-sex relationships, his ex-wife could
go on the DPB whilst living in a partnership 'after the nature of a marriage' with somebody working fulltime.
This 'loophole' is appallingly iniquitous and discriminatory. A female on the DPB who fails to disclose the existence of
an income-bearing male partner living under the same roof would be a criminal. Not so if her partner is the same sex.
Should the current law change to recognise same-sex couples, Jenny Rankine, Lesbian Rights activist, says, "Thousands of
lesbians will lose their only income and become financially dependent on their partners. Thousands of couples who are
both receiving benefits will have their income reduced to 'married' rate." Hello. Welcome to the real world.
The gay community suspects the law will be changed. Green MP, Sue Bradford, speaking at a DPB symposium in November 2001
remembered the days when welfare officers "checked under beds for a pair of men's shoes." She warned the audience of
mainly women, "they may soon be checking under the bed for a pair of women's shoes." Mind you, this was over a year ago
and the anomaly still hasn't been rectified let alone acknowledged despite my public questions to the Minister.
Student allowances or training grants offer yet more opportunities. Start your family before finishing your education
and the chances are you can complete it courtesy of the public purse.
Some single parents make a career of studying. One correspondent described a sister who had been, "on the DPB forever
doing endless courses and university training." It was unclear why as she apparently had no intention of working. It's
not a small problem. Student allowances, which DPB recipients qualify for, have increased from $175 million per annum in
1999 to over $400 million today.
Of course, having more children can always accommodate a strong aversion to paid work. As long as a single parent has
dependent children, they will not be legally required to support themselves. Conceivably a women could produce children
throughout her fertile life and never be self-supporting. Even if she finds herself at 50 with no dependents, she can
then transfer to the DPB for 'Women Alone'. How long will it be before we 'need' a DPB for 'Men Alone'?
So what have we got? The enormous emotional cost to children who lose, never know or can't acknowledge their fathers,
lose their mothers, or brothers and sisters. And, of course, there's the thousands of hurting rejected or ignored
grandparents.
We have the enormous economic cost to the public who pick up the tab. Child support payments fall well short of
offsetting the $2 billion DPB package. The Trapski Committee of 1994 reported that 16 percent of liable parents paid no
support and 58 percent paid the minimum Most recent estimates put the percentage of the DPB bill recovered through child
support at a mere ten percent. Workers, many of whom are struggling to support their own families, pay the rest through
taxation.
Yet, all that I have described is legal; it might be immoral, but it is legal. "I can't believe that the state would
sanction my ex-wife giving up a good fulltime job to go on the DPB and do a course," says another disbelieving Dad. "But
you can't fight the legislation."
The Ministry of Social Development has recently been patting itself on the back for reducing benefit fraud (the
opposition claim this is merely a result of less fraud investigation) but it needs to take a long hard look at benefit
exploitation. Those who must rely on welfare are being short- changed by those who could make better life choices.
Working the system isn't just ripping off the 'rich' - it's ripping off low-income workers and beneficiaries with no
other options.
Lindsay Mitchell can be contacted by e-mailing mailto:dandl.mitchell@clear.net.nz