How Winz tramples over rights

By SEONAID ABERNETHY*

Charlie Chaplin and Marilyn Monroe were welfare children. Social welfare found them an orphanage or foster parents.

Some doctors and medical specialists who are practising in our hospitals were on income support 10 years ago.

Then there are permanent beneficiaries with disabilities who are not able to survive independently in a competitive marketplace.

The task of providing for those who are temporarily or permanently unable to provide for themselves is entrusted to the Department of Work and Income, commonly known as Winz. Its operation should be governed by the 1964 Social Security Act.

But Winz is out of control in terms of its powers under the act. It behaves as if it is a business that needs to generate income, and gains that income by establishing debts against beneficiaries. In particular, Winz is failing to exercise its duty to hold hearings into debts when requested to do so.

Take this scenario, which is typical of the Winz debt and criminal process. It is replicated all over the country, probably in epidemic proportions.

Let's assume that our Marilyn is dyslexic and has great difficulty writing. This means work opportunities are limited. Her son has gone to live with her sister, but she remains on a domestic purposes benefit while she hammers on the doors of talent agencies.

Let's also assume that Winz has decided that because JFK is visiting Marilyn during the week and weekends, she is living in the nature of marriage and her waitressing income of $6000 a year is undeclared work.

"You have not been entitled to the domestic purposes benefit for two years," says Winz, and a debt of $32,000 is established against her. At the same time, Marilyn is prosecuted for benefit fraud.

The future looks bleak. She faces imprisonment. JFK will not phone her and her sister will not let her son see her. She needs to escape a criminal conviction and annul the debt.

Her first obstacle is the million-dollar club, a club to which Winz officials can belong if they collect $1 million from beneficiaries in a year. The club is described in the Joychild report released by the Government last month.

The report, the work of Auckland barrister Frances Joychild, raises concern that Winz investigators are rewarded with performance pay for establishing debt against beneficiaries.

The report says performance pay is based entirely upon the amount of money benefit crime investigators take back from beneficiaries. And the culture is not just reflected in performance pay: there is also the million-dollar club. Investigators who collect that sum are publicly affirmed and valued by management.

Marilyn is unlikely to get out of her hole by simply explaining to the investigators that JFK is married to someone else and that her three-month, full-time waitress job at the film studio comes almost within the $4160 annual allowance for part-time work. Investigators have a financial incentive to nail her.

In the criminal court, Marilyn (or rather her lawyer) brings medical evidence to show that her learning disability was closer to Asperger's syndrome. As a result, she was on the wrong benefit. Moreover, criminal intent was practically non-existent.

The fact remains that she ticked "yes" on the DPB form to the question, "Is your child still living with you?" knowing this answer was wrong. But she did not know that she could get a sickness benefit and thought she would have to become a nightclub singer (something her foster mother had warned her against) to survive if she did not get some kind of benefit.

Technically, she had made a false statement. There is a plea bargain. Winz reduces the debt to $4000, Marilyn pleads guilty to the false statement charge and is convicted and discharged.

Once outside the court, however, she finds Winz wants the $32,000 debt paid. "You pleaded guilty and you were convicted," it says. "We want the full $32,000."

Under the act, Winz has a momentous power to create itself a creditor and the beneficiary a debtor. It can do this unilaterally. It can also recover the debt by going into bank accounts or deducting from wages.

Marilyn now faces a second legal journey through the review process set out in the Social Security Act. She has to exercise her power to compel a hearing into the debt. This is heard before a benefit review committee.

Getting a committee to consider a review can be tricky. In two recent cases, it took me, as legal counsel, more than 2 1/2 years of requests to get a hearing. In both cases, I had to file proceedings in the High Court to compel Winz to exercise its duty to convene a committee.

The committee, consisting of three members, is constituted afresh with each review. Two members come from Winz and the other from a local community board. The committee is semi-independent. It is not answerable in law other than by way of appeal to the Social Security Appeal Authority.

The challenge to the debt must be made within three months of the decision. After that time, a beneficiary must establish a case for a review out of time. Winz, however, has no statutory time limit in response. It seems that it can take as long as it likes to convene the committee. I have seen beneficiaries wait for years.

There is, however, the 1990 Bill of Rights Act. This says that "every person has the right to the observance of the principles of natural justice by any tribunal or other public authority which has the power to make a determination in respect of that person's rights, obligations or interests protected or recognised by law".

Procedural fairness and the right to a hearing are fundamentals of natural justice. The Bill of Rights Act is an ideal tool for Marilyn and hundreds like her.

But it is a hard road. I have had to ask the High Court to compel Winz to convene a committee hearing to review a debt. That person, who had severe disabilities, had been on the wrong benefit, was prosecuted and was assessed with a debt of $59,000 when the notional entitlement - the real loss - was only $700. For most of two years, the $59,000 debt was being collected at $47 a week.

Winz has a policy of not holding to the notional entitlement. That is hardly surprising, given the existence of the million-dollar club. But it has a duty to convene a committee when asked. Failure to do so is a breach of the Bill of Rights Act.

Our Marilyn should be able to call upon the Bill of Rights Act to get Winz to convene the committee. If she cannot, our country is in poor constitutional shape.

And if the benefit review committee cannot recognise that what she should pay back to Winz is its true loss - the notional entitlement - she has to plod on to higher levels of tribunal.

Best of Luck, Marilyn. Next time you enter the Winz world of benefits, wear an invisibility cloak.

* Seonaid Abernethy is an Auckland barrister.