Source: Child Poverty Action Group (CPAG)
There I was, Sole Parent Beneficiary, lolling on the couch with my low-quality beverage, savouring the luxury of my state-funded holiday, when I found out that simply by securing four to six extra hours of paid work, I could increase my family’s weekly income by $72 (on top of the income earned), through the In-Work Tax Credit (IWTC). Well, I was instantly jolted from my listless apathy into that fixed-term, casual job compatible with my current working and childcare arrangements that I’d been avoiding for weeks!
Obviously, that didn’t happen. I’m not sure which theoretical model is used to legitimise the policy practice of incentivising work through offering financial rewards, but I’m picking it involves rats and switches. Yet the idea that work has to be made more financially attractive is important, because it’s the argument used to justify the existing disadvantage between the children of working parents and kids of beneficiaries. In 2008 the Human Rights Review Tribunal found the IWTC discriminatory but it was justified then – and again in the 2013 High Court Appeal – because of the “legitimate objective” of incentivising beneficiaries into work. That disadvantage manifests as material hardship for some of our most vulnerable population. And that’s somehow ok, because it’s the government’s job to entice parents into paid work by making it more financially rewarding? I can’t see there being any arguments that could justify children’s material hardship, but I don’t believe that the IWTC is an incentive at all, let alone one that legitimates discrimination.
It’s a bit silly
The premise that the lure of additional income suffices as motivation is, well, exactly the same premise you use when you’re looking for a job. As a beneficiary, I was actively seeking work. As far as incentives go, the IWTC is a bit like extra fries.
Is it an incentive or a supplement?
If the income from work is not in itself an incentive, and needs to be topped up by the government to make it worth the effort, then that raises another question. If work isn’t enough on its own, then isn’t the IWTC functioning as a tool to ensure income adequacy? I hope not, because if it is, that means we’re discriminating against children whose income is already below an adequate level.
There’s a counter-incentive at work
If the primary justification for IRD rewarding families in paid work is that it creates an incentive then what is WINZ up to? If IRD is dangling this tantalising treat before your eyes, then WINZ must be hovering nearby like the waiter who clears your glass before you’ve finished your drink. When you’re on a benefit the more you work, the less your payments are. If extra financial reward for work is considered an incentive by IRD, then isn’t WINZ’s abatement scheme a deterrent? Time for a game of incentive-off. Let’s say you’re offered 20 hours a week of ongoing casual work. From a purely motivational point of view, you could take it, so IRD will reward you with fries and a few hours of tinny Split Enz on hold. But there’s a catch. You need to come off the benefit to receive the IWTC. That means that in the weeks you don’t get 20 hours of work (like when your kids are sick) there’s no help from IRD or WINZ support. The other option is just to have your work-free WINZ burger, saving you the scramble to find 20 hours of casual, subsidised childcare at short notice (which, by the way, you’re not eligible for until you’ve been guaranteed the work that you can’t commit to until you arrange the childcare).
There’s an assumption that you don’t want to work (or don’t work already)
One of the problems with the incentive-scenario above is that the main difference between those two weeks was the availability of work. The incentive (carrot/stick) rationale sits within the weary old narrative of “welfare dependency” that National has been doling out since the 1990s. It’s a tenacious story, perhaps because it so neatly packages complex, systemic factors into a simple cause and effect story, ie. lazy people need to get off the dole. It justifies sanctions and incentives to correct individual outcomes. There is no justification, or evidence, to support the assumption that every person receiving welfare support will continue to do so. Yet the incentive is applied across the board. The assumption was that I needed an incentive. I didn’t. I needed a job. In the meantime, my kids missed out, even though they were in no way responsible for a local shortage in permanent positions.
There are many complex, intersecting factors that contribute to a need for temporary or long-term income support – disability, childcare, transportation infrastructure, change in relationship status, local labour markets, mental health, addiction, early offending, geography, education, specialised careers. I had casual part-time work as a disability support worker with an awesome little girl who I had been supporting for four years. I was looking for permanent work but I’d just come off the Student Allowance, it was the summer school holidays (I have two kids with a shared care arrangement) and there wasn’t a single role related to my recent qualification for months.
The criteria for the incentive is hard to meet
Even if finding another part-time, flexible role had been possible, it would have been too much to risk coming off the benefit for casual work, which might fall below the 20-hour threshold.
All those extenuating factors that come into play when you’re a beneficiary with casual, part-time employment – which happens to be pretty much the only work you’ll be lucky enough to get while you are actively seeking permanent employment, or have children in your care – make it hard to continually meet that 20 hour per week target. Casual work is by its nature unreliable, and coming off the benefit leaves you without a safety net in the weeks that you can’t work 20 hours. It only took until March for me to find permanent part-time employment. I then had the choice of staying on the benefit, or moving off it to then qualify for the IWTC, which I did. It wasn’t an incentive – I already had the job – it was a bonus that came with a job that had regular hours.
It reinforces the nuclear family model
If I’d still been married, I would have received the IWTC, because between the two parents, we would have made it to the 30 hour threshold. Instead the kids’ dad received it, because he worked 20 hours, and I didn’t, because I couldn’t.
We don’t really know if it works
The “success” of the IWTC hasn’t been measured qualitatively, by any observed change in people’s willingness to take the work-bait, but instead quantitatively, by how many people left the benefit for paid work.
The argument is weak, the evidence is poor, and yet here we are, busily stocking the supply-end of the labour market while penalising the kids whose parents can’t find work right now. Our welfare should be based on justice, fairness, equality. It isn’t, as long as we have the discriminatory policy of the IWTC. We need to change this. It’s not the kids’ fault.