New Zealanders could soon receive both welfare and accident compensation at the same time without being penalised.
A landmark human rights ruling yesterday said a solo parent who only received a fraction of her accident compensation because she was already on welfare was discriminated against.
Social Development Minister Carmel Sepuloni said today that the decision highlighted the difficulty in ensuring two different forms of government support worked well together.
The minister would not immediately commit to changing the discriminatory law. But she said she had informed the Welfare Expert Advisory Group about the issue. The way the welfare system interacted with other government support was one of the areas the group was investigating, she said.
Sepuloni said she would consider the group's recommendations when it reported back this month and if necessary get advice on a potential changes to legislation.
The high-powered working group has been tasked with making recommendations to overhaul the welfare system to make it fairer. That is likely to include the removal of the most punitive benefit sanctions and could include changes to abatement rates - the reduction of beneficiaries' payments when they earn more money.
The Human Rights Review Tribunal made a declaration yesterday on a claim brought by Waikato woman Maree Hennessy.
Hennessy was working part-time while receiving a sole parent benefit when she had an accident at work in 2000 which forced her to stop working completely in 2002.
ACC eventually accepted liability to pay compensation for lost salary between 2002 and 2010. It owed her around $89,000. But because Hennessy received welfare payments over the same period, ACC only paid her $576.
The rest went to the Ministry of Social Development because of a law which led meant it had to deduct the ACC payments from her benefit income "dollar for dollar".
If the payments had come from a source other than ACC, she would have received around $40,000 of the total - after abatement.
For that reason, the tribunal declared the law was inconsistent with the right to be free from discrimination. MSD did not oppose the declaration.
Hennessy said the dollar-for-dollar abatement caused years of severe financial strain for her and her family.
"I was an injured, unemployed single parent, with almost no access to legal help, trying to fight a legal battle," she said.
"I felt I was being treated unfairly and I took offence when it became obvious that governments have been gaining from the losses of injured beneficiaries over the years.
"If the law treated earnings-related compensation as 'income' then there would be no issue. I think people would be surprised if they realised a beneficiary's working income is not protected."