Appeal ruling step towards care rethink

Gareth MorganTax and Welfare

The recent Appeal Court ruling about payments to families who provide home-based care for their disabled family members confirms that New Zealand social policies – not just health but early childcare and welfare benefits too – are discriminatory and a breach of human rights.

The immediate implication of the Appeal Court’s ruling is this: where someone’s disabilities are so severe they qualify for government-funded home-based support services (help with shelter, meals, transport, personal hygiene, medications), and the type and level of support services their family provides is on par with what contractors would supply, and the disabled person prefers to be cared for at home by family, then the Ministry of Health cannot refuse to pay the family on the same terms as they would an outside caregiver.

The government could be facing an additional cost of who knows what on this. It looks like big bucks.

In the case considered by the Court of Appeal, the Ministry of Health is funding support services on the presumption that whatever the families of disabled people are doing is what they should be doing, and the role of government is to pay for everything that is needed but not provided by the family.

This is where it’s so unfair – the more you do for your disabled family members in need, the less the taxpayer will help.

Only by doing less and getting outsiders to do it will the work be paid for – really bizarre.

If, say, you do so much for your family member in need that you don’t have the time to earn enough money from an outside job, then you may be eligible for a Winz benefit (DPB – care of sick or infirm, is one example), but caregivers with a partner may not receive much.

A Winz benefit is likely to be a lot less than you could earn by just leaving the care of your family member to a paid-for outside contractor, and going to work.

The Government has been resisting paying the family caregivers of the disabled on the same basis as outside contractors because it’s worried about an avalanche of families “commercialising” the care they provide for family members.

You can imagine unscrupulous types giving rubbish care to their family members and pocketing a nice cheque for their efforts thank you very much – and yes, people like this do exist, child (and elder) abuse is a real problem in our communities after all.

Better, it’s argued, for an arm’s length relationship between carer and cared.

But the court’s judgment is that this is a different problem and it needs addressing specifically, not through blanket measures that discriminate against genuine family-based carers.

Consider now the wider implications.

As a community we agree to provide services to the disabled but we also agree to make sure the elderly and young children are cared for.

Just as for the disabled, the government funds contractors to care for them (in rest homes and early childcare centres) during those hours when the family doesn’t.

But – here we go again – we subsidise rest homes to take care of the elderly, but we don’t pay an equivalent amount to families who look after their elderly instead.

We pay subsidies to childcare centres but not to the parents who look after their children during the same hours at home.

Replacing family by market providers is most obvious in the all-day care bought for young children, and in the childcare bought for those aged under 2.

And arguably in this case, the quality of the care is actually greater when it’s delivered by family at home, certainly reducing the risk of the attachment disorders that institutionalised care engender.

If anecdotal reports are true and one-on-one care for under-2s in childcare centres can be as little as six minutes a day, then we’ve made a giant step backwards for child care in recent times, not forwards. Based on the precedent with the case of family care of the disabled, policies that subsidise rest homes and childcare centres but make no payment for similar work done by families are discriminatory and therefore illegal.

Families who provide care are excluded from government payment purely on the basis of them being family, and are financially disadvantaged as a result.

There should be an awful number of taxpayer dollars due to those families doing DIY care of the elderly and the young.

Bring on the court cases.

Surely the Court of Appeal’s ruling is the death knell for the crude and arbitrarily targeted social “assistance” policies that the country has been battling to perfect for decades, which the Welfare Working Group acclaimed and which the government’s investment approach to benefits, announced last week, heralds.

The problem with trying to target government social spending is something we banged on about in our book The Big Kahuna. We focused on spending by Winz, but the same issues apply.

Why should family status make any difference to whether a carer is paid, or whether someone receives a Winz benefit when they are unemployed for that matter?

The Minister of Health might wring his hands about the potential cost blowouts, but he and colleagues would be better to take a breath and acknowledge that targeted regimes are full of inequities, encourage rorts, trap people in poverty and can be costly to administer.

In pointing to the problems of targeting, we’re not making a value judgment – we’re not suggesting, for example, that everyone stay at home to care for their family.

But targeted policies that discriminate against family, that create incentives for families to opt for institutionalised care (whether parents opt for full-time early childcare for example) are a breach of human rights.

The decision families make should be independent of government funding policies.

A radical rethink of social policy is warranted, starting with a universal, unconditional transfer from the government.

This would provide all adults with a basic income each year enabling all to live in dignity, including those who choose to care for family at the expense of paid work.

This would enable us, over and above that, to continue to target social services, but in a fair way.

In the case of the disabled, for example, we could establish in absolute terms what someone’s service requirements are in order to participate in the community, and then the taxpayer would again front up, but importantly, not caring who provides those services (family or other) as long as a quality standard is met.

If the government continued to provide specific funding for care of the elderly and the young they would again have to make sure families and other contractors were treated equally.

At the heart of the targeting problem is the fact that neither the Ministry of Health nor any other agency has a defensible view of what “normal” is for a family’s responsibilities and yet the whole targeted approach relies on it.

So they default to the silly position of saying that anything a family does is normal, and the Ministry of Health (and other departments) just fills the gap beyond that.

Such a policy of course can influence how much the family provides.

We need to get real about modern family life and recognise that there really is no “normal” anymore.

We need social policies that enable people to exercise choice in the face of widely different options about how they function as a family, but these policies must not discriminate.

In The Big Kahuna, we advocate that our targeted benefit system should be replaced by an unconditional basic income that recognises that unpaid services such as voluntary community work, and caregiving as has been discussed here, have a real benefit for society.

Outcries that such a policy is unaffordable miss the mark – all that is needed to fund this policy are sensible, and overdue, tax reforms that close gaping holes in the tax base.

Certainly payment for any additional services that are needed is appropriate, no matter who provides them, and the government can be expected to continue to have a budget for those purchases as it does now.

But these payments that get allocated across providers need to be fair and equitable – equal pay for equal work.

Discrimination is unacceptable yet endemic in our social policies.

Let’s hope the recent Court of Appeal ruling is the first step on the road towards common sense, ending the abuse of human rights that reliance on the targeting of social assistance implies.

Gareth Morgan and Susan Guthrie are authors of The Big Kahuna – Turning Tax and Welfare in New Zealand on its Head.



Appeal ruling step towards care rethink was last modified: December 15th, 2015 by Gareth Morgan
About the Author

Gareth Morgan

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Gareth Morgan is a New Zealand economist and commentator on public policy who in previous lives has been in business as an economic consultant, funds manager, and professional company director. He is also a motorcycle adventurer and philanthropist. Gareth and his wife Joanne have a charitable foundation, the Morgan Foundation, which has three main stands of philanthropic endeavour – public interest research, conservation and social investment.