Clark puts card woes down to bad advice

By AUDREY YOUNG political reporter

Prime Minister Helen Clark says the Government will not back down on its community service card decision, which will deny 48,000 low-income workers health subsidies received by pensioners and beneficiaries on the same income.

She also blamed "ministers and bureaucrats" for failing to anticipate the anomaly, citing Health, Annette King's responsibility, and Work and Income, Steve Maharey's department.

"It would be nice to have better advice."

And she said she had been wrongly advised by officials that a small number of beneficiaries might have lost the card if the decision had not been taken.

None will be - all beneficiaries are entitled to the card, no matter how the qualifying thresholds are moved.

The card gives access to subsidies for doctor visits and medicines.

Helen Clark does not believe the Government's decision sends the message that people can be better off on a benefit than in work.

"I don't think it sends that message at all. People in work are generally better off than people on benefits. In fact, the very purpose of the National Party cutting the benefit in 1991 was to ensure that people in work were better off."

The problem would take $14 million to fix, but Helen Clark said the budget was under other pressures.

"We have a contingency fund which could be oversubscribed about 50 times over. You can't say the money is there.

Liabilities for the contingency fund in the next year ranged from the possible extension of East Timor commitments to Maori television.

National leader Jenny Shipley yesterday referred the decision to the Human Rights Commission, saying it discriminated against the employed.

Labour MP John Tamihere said he would raise the matter with his caucus. "I think we're starting to get into some defining moments of the type of Government we are."

The 48,000 potential card holders were "the real battlers at the upper end of it just keeping their head above water."

The Greens met Helen Clark yesterday. MP Sue Bradford said the Greens would be a party to a community service card review, but she was unhappy that nothing had changed. The inequities apparent at the start of the week remained.

Alliance president Matt McCarten said the Government had created a bigger problem than the one it was trying to fix.

Creating anomalies was the risk of having targeted assistance instead of the universal entitlements favoured by the Alliance, he said.

The furore over the card has arisen because, in trying to address one anomaly, the Government has created another.

The cabinet raised the level of income that beneficiaries and pensioners could receive before they lost their health subsidy card.

But it did not raise the level for working people. Previously, the thresholds had been applied evenly.

Working people already entitled to the card will continue to receive it - unless they get a pay increase that takes them over their old threshold.

The main losers are the 48,000 low-income earners who would have received the card if the workers' threshold been raised along with the pensioners' and beneficiaries'.

The Government took the step so that no pensioners or beneficiaries were worse off after receiving a cost-of-living increase on April 1.

If it had not done that, then 1270 pensioners would have lost their cards.

Helen Clark said that the wider effect of the cost-of-living adjustment was not considered. "You could say that's an oversight by ministers and departments."

The community services card was introduced in February 1992. About 1 million cards are on issue, including 250,000 to 300,000 held by people not receiving income support.

The card entitles adults to $15 off the price of a visit to a GP, and a child over 6 to a $20 subsidy. Cardholders pay only $3 for a Government-subsidised prescription.