This is a part of No Pride in Prisons’ Abolitionist demands. These demands were originally published as a book. To see a pdf of the book, click here. To buy a copy, please email info@noprideinprisons.org.nz
The New Zealand government systematically criminalises people receiving welfare benefits. This occurs both when people deliberately or accidentally draw more than the legally allowed amount of support from the welfare system, and when, due to bureaucratic ineptitude, the Ministry of Social Development (MSD) accidentally overpays[1] them or sanctions[2] them for things often beyond their control. The government is harsher on beneficiaries than white-collar tax fraudsters,[3] despite the fact that benefit fraud cost just $22 million in 2010[4] compared to tax evasion’s more than $7.4 billion in 2011.[5] Further, 60 percent of people convicted of benefit fraud were imprisoned compared to only 22 percent of tax offenders between 2008 and 2011.[6] These practices disproportionately affect women, as women are more likely to be imprisoned for fraud offences than men,as well as Māori, who make up nearly half of those sentenced to imprisonment for fraud.[7] This unequal, punitive, and dehumanising approach commonly leads people from poverty into debt and, sometimes, incarceration.
The current system is also open to abuse as a vehicle for interpersonal control. This is due to the MSD practice of encouraging informants[8] to file fraud reports against people they know.[9] It is MSD policy to act on all allegations of benefit fraud and to seek prosecution for those instances they believe are “premeditated.”[10] The fraud reporting process is designed to be used by informants with a high level of knowledge of the person whom they are reporting.[11] This can, and has, led to the use of MSD reporting as a tool for blackmail or revenge.[12]
People dependent on the Sole Parent Benefit[13] are especially vulnerable to pressure and blackmail because they are in danger of being fined, indebted, prosecuted, or imprisoned for “relationship fraud” if they are perceived to be in a partnership,[14] no matter how financially independent they are from their supposed partner. This grants an unacceptable level of power over people to anyone willing to report, or threaten to report, them. MSD has an obligation not to facilitate the further impoverishment, distress, abuse, or incarceration of those it is tasked to help.[15] Its current approach of criminalising beneficiaries demonstrates its fundamental failure to meet this obligation.
Child Poverty Action Group’s report into the extensive harm done to children, in particular by the MSD’s pursuit of “relationship fraud” by people on Sole Parent Benefits, recommended, a ban on imprisoning mothers with dependent children due to overdrawn benefits.[16] It is No Pride in Prisons’ position that incarceration due to welfare fraud should not be imposed on anyone, and we therefore demand that the practice of seeking criminal prosecution for overdrawn benefits be ceased and outlawed.
[1] YouthLaw Aotearoa, “Fraud & Overpayments,” YouthLaw Aotearoa, 26 January 2016. http://www.youthlaw.co.nz/information/welfare-benefits/fraud-overpayments/.
[2] Social Security Act 1964 s 117.
[3] Lisa Marriott, “Courts More Lenient on White Collar Criminals,” Victoria University of Wellington, 14 April 2016. http://www.victoria.ac.nz/research/expertise/business-commerce/fraud-sentencing.
[4] Chester Borrows, “Tackling Welfare Fraud: Proposed Approach,” Ministry of Social Development, 21 June 2012. https://www.msd.govt.nz/documents/about-msd-and-our-work/work-programmes/welfare-fraud/r-tackling-welfare-fraud-proposed-approach.pdf.
[5] Richard Murphy, The Cost of Tax Abuse: A Briefing Paper on the Cost of Tax Evasion Worldwide, (Chesham: Tax Justice Network, 2011), 11.
[6] Lisa Marriott, “Courts More Lenient on White Collar Criminals,” Victoria University of Wellington, 14 April 2016. http://www.victoria.ac.nz/research/expertise/business-commerce/fraud-sentencing.
[7] Statistics New Zealand, “Annual Remand Prisoner Throughput for the Latest Fiscal Years,” Statistics New Zealand, August 2016. http://nzdotstat.stats.govt.nz/wbos/Index.aspx?DataSetCode=TABLECODE7321.
[8] K. B. Brady, “Part 3: Detecting Benefit Fraud,” Controller and Auditor General New Zealand, 9 June 2008. http://www.oag.govt.nz/2008/benefit-fraud/part3.htm.
[9] Work and Income, “Report a Suspected Fraud,” Work and Income, 15 March 2016. http://www.workandincome.govt.nz/about-work-and-income/contact-us/report-suspected-fraud/.
[10] Ministry of Social Development, The Statistical Report 2012 for the Year Ending June 2012, (Wellington: Ministry of Social Development, 2013), 193.
[11] Work and Income, “Information That Helps Us When You Report a Suspected Fraud,” Work and Income, 11 April 2016. http://www.workandincome.govt.nz/about-work-and-income/contact-us/report-suspected-fraud/info-suspected-fraud-allegation.html.
[12] Catriona MacLennan, Stop Sending Beneficiary Mums to Jail – Our Double Standard on Debt, (Speech, Child Poverty Action Group, 12 December 2014).
[13] Social Security Act 1964 s 20D.
[14] Work and Income, “Are You in a Relationship?” Work and Income, 25 January 2016. http://www.workandincome.govt.nz/on-a-benefit/tell-us/are-you-in-a-relationship.html.
[15] Catriona MacLennan, Stop Sending Beneficiary Mums to Jail – Our Double Standard on Debt, (Speech, Child Poverty Action Group, 12 December 2014).
[16] Susan St John et al., The Complexities of ‘Relationship’ in the Welfare System and the Consequences for Children, (Auckland: Child Poverty Action Group, 2014).