MINISTRY OF SOCIAL DEVELOPMENT. Te Mnnntii Whaknhinto Orn

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1 MINISTRY OF SOCIAL DEVELOPMENT Te Mnnntii Whaknhinto Orn Bowen State Build ing, Bowen Street, PO Box 1556, Welling ton 6140 Telephone: Facsimile: October 2015 IN CONFIDENCE Simon O'Connor Chairperson Health Committee Parliament Buildings Wellington Dear Mr O'Connor Petition 2011/122 of Rachel Noble on behalf of the Disabled Persons Assembly and 1,491 Others This letter responds to the questions raised by the Health Committee during the Ministry of Social Dev elopment's (MSD's) appearance before this Committee on 9 September The questions and MS D's responses to t hem are out lined below. Question 1 What advice did the Ministry provide during the development of the Family Carer Policy (including recommendations around the numbers)? In 2012, MSD participated in a Senior Officials Group which prov ided whole-ofgovernment adv ice on t he development of options for prov iding a payment for family ca rers, in response to the outcome of the Court of Appea l's consideration of Th e Ministry of Health v Atkinson & Ot hers (the Family Ca rers case). In mid-2012, MSD provided input into a risk assessment Initial advice on the Government's response to the Family Carers case was prov ided to the Cabinet Social Policy Committee (SOC) in July This adv ice included an assessm ent of the extent of potential legal risk arising from the particular decisions m ade by the Court in the Family Carers Case. MSD provided input into this risk assessment in relation to the main forms of welfare support it provides t o carers - MSD's input included t he numbers of recipients of these forms of support and the total amount spent on ea ch of these forms of assist ance at that time. ~ child, youth ~ B and family (;ltnaiti, te- rnnga1ahr, lac atul;i tewhiinau ~~fam ily & community services ~ ratonga ci-whcinau, ci-hapori I... STUDYLINK -~ Hoto Akoranga ~: 1 IIi Work and Income.-~ Te Hiranga Tangata

2 Over the remainder of 2012, MSD provided specialised advice on the development of a possible welfare payment option One of the options in response to the Family Carers Case explored by the Senior Officials Group for the remainder of 2012 was the possible introduction of a flat-rate (or two tier) carer's allowance that would be paid through the welfare system. MSD provided specialised advice on this option. The allowance option was modelled on MSD's Child Disability Allowance (CDA), which is a non means-tested flat-rate allowance that is available to the principal caregiver of a dependent child with a serious disability. It would have involved making a relatively modest payment to family carers to recognise the role they play. The level of support would not have been tied to the specific level, or amount, of care provided by individual carers. Over the second half of 2012, MSD estimated the impact of introducing a carers allowance along these lines, based on a range of different scenarios covering different rates of payment and different eligibility criteria. We advised that an allowance of $50 per week, paid to an estimated 26,400 informal carers, would cost about $68.6 million per annum. This estimate reflected a range of assumptions about the eligibility criteria used and the potential take up. The carers allowance option was one of the options included in the public consultation carried out from September to November It was the least favoured option in the consultation (only one in four submitters supported this approach). MSD provided advice to assist in the development of the preferred policy option of a family carer payment MSD's input into the Government's eventual preferred option of a family carer payment centred on how such a payment would interface with the benefit system. In December 2012, SOC agreed that if the policy of paying family carers under the Funded Family Care Policy were to result in savings to Vote Social Development (e.g. through the abatement of any benefits being paid to these carers due to them receiving the family carer payment), these savings would be transferred to Vote Health through fiscally neutral adjustments. MSD has been unable to estimate whether any such savings have been generated since the introduction of Minstry of Health's family carer payment, due to a lack of relevant available data. Question 2 Can MSD provide information about what income support a person can get through MSD if they are receiving the family carer payment (including identifying what they would not be eligible for if they access the family carer payment)? The main form of income Support is the Supported Living Payment for carers The main form of income support a person receiving a family carer payment may be able to receive from MSD is the Supported Living Payment for carers (SLP (caring)). 2

3 A person receiving a family carer payment under the Funded Family Care Policy could be eligible for SLP (caring) if they are 18 years or over, and caring "full-time" 1 for someone at home who is not their husband, wife or partner. 2 The person they are caring for must also otherwise need to receive hospital or residential-level care, which is defined as one of the following: rest home care residential disability care extended care services for severely disabled children and young people inpatient or residential hospital care. Receiving a family carer payment under the Funded Family Care Policy would not make a person ineligible for the SLP (caring). However, the rate of payment of SLP (caring) abates with income. This means that a person receiving both a family carer payment and SLP (caring) may receive a reduced rate of SLP (caring), or no payment of SLP (caring) at all, depending on the amount of income they are receiving from the family carer payment. The abatement rate is set as follows: for beneficiaries who receive income (before tax) in excess of $100 a week their benefit is reduced by 30 cents for each $1.00 of income they receive between $100 and $200 per week for beneficiaries who receive income (before tax) over $200 per week, their benefit is further reduced by 70 cents for every $1.00 of income they receive in excess of $200 per week. The "cut-out point" where SLP (caring) abates to zero for a single person, without children, aged 18 years or over is when their additional source of income reaches $533 per week (before tax). This means, for example, that a single person over 18 who is being paid to care for someone under the Family Carer Policy (at $17.91 an hour) for 30 hours or more a week would be unable to receive the SLP (caring). Some scenarios illustrating the interface between the family carer payment and income support from MSD are outlined in Annex One. 1 Caring "full-time" means the carer must be available if required. The carer could for example, be in part-time employment or study. MSD must be satisfied that the person is able to provide the necessary care and be available if an emergency arises. Arrangements on how the patient is being cared for at times when the carer is not present, and their availability and accessibility to the patient if an emergency situation arises, are all factors that are taken into account when determining entitlement to SLP (caring). 2 They would also need to be a New Zealand citizen or permanent resident who normally lives here, and who has lived here for at least two years at one time since becoming a New Zealand citizen or permanent resident. 3

4 People do not need to be single to receive Supported Living Payment (caring). However, there is no married/couple rate of payment for this form of support. The client's partner may instead qualify for a benefit in their own right, or may have some other form of income. 3 Older carers may be able to receive New Zealand Superannuation, which is paid at a higher rate than SLP (caring) A person receiving a family carer payment under the Funded Family Care Policy who is aged 65 years or over would be likely to be eligible for New Zealand Superannuation (NZS). This is paid at a higher rate than SLP (caring)_< NZS is not subject to means testing 5, which means that someone receiving a family carer payment would receive the full rate of NZS regardless of how much they earned via the family care payment. A person who is receiving the family carer payment may also be able to receive other forms of main income support, depending on their circumstances MSD provides many different forms of main income support other than SLP (caring) and NZS, which are tailored to different situations - for example, Jobseeker Support (JS) for unemployed people, Sole Parent Support (SPS) for sole parents, and the Supported Living Payment (SLP) for people with a health condition, injury or disability, or total blindness. A person who is receiving a family carer payment under the Funded Family Care Policy may be able to receive one of these other forms of income support. However, as with SLP (caring), the rate paid for these benefits abates if a person has alternative sources of income above a certain level. The receipt of these forms of support is also typically conditional on a person meeting a range of specific eligibility criteria and obligations, which may not be possible for some family carers. For example, people who receive JS have to meet full-time work obligations, which means that they must be available for, and take reasonable steps to find, suitable employment of at least 30 hours or more per week. 6 Also, the rate of payment for some of these other forms of income support- particularly JS and SPS - is generally lower than that for SLP (caring), which means they would be better off to elect to receive SLP (caring). 3 For people with partners, their combined income is taken into account for the Supported Living Payment (caring) abatement, as set out above. 4 To be eligible for NZS they would also need to be a New Zealand citizen or permanent resident. They must also be ordinarily resident in New Zealand on the date of application, and have lived in New Zealand for at least 10 years since they turned 20, with five of those years being since they turned The only exception to this is where a superannuitant chooses to receive the married rate of NZS in respect of a spouse or partner who does not qualify for NZS in their own right - in these cases the couple receive the non qualified partner rate of NZS, which is means tested. 6 A person receiving a family carer payment under the Funded Family Care Policy who is in a relationship may be able to receive the couple rate of one of these benefits, if their spouse or partner qualifies for them in their own right. 4

5 Supplementary and hardship support may also be available A person receiving a family carer payment under the Funded Family Care Policy may also be eligible for supplementary support and/or hardship support from Work and Income, including the following assistance: Supplementary support is available to help a person meet additional costs arising from accommodation needs (Accommodation Supplement) or a disability (Disability Allowance). Employed people on low incomes may be eligible for these forms of support. The rate paid is assessed according to needs. Hardship payments are available to people on low incomes for emergencies and other financial hardship. These are mainly one-off payments (Special Needs Grants and Advance Payments), but some are temporary for a specific time period (for example, Temporary Additional Support). The amount is assessed by need, income and asset tested and also available to low income employed people. Home Help provides additional financial assistance to people who require temporary part-time home help to complete tasks normally performed in the home such as laundry, housework and food preparation. This could be because of a domestic emergency or because the client requires domestic support. To be eligible a person must meet an asset test and have a current Community Services Card, which is itself subject to an income test. A person receiving a family carer payment under the Funded Family Care Policy who is also looking after dependent children under the age of 18, may be eligible for additional payments from MSD depending on their circumstances, such as the Child Disability Allowance, Orphan's Benefit, Unsupported Child's Benefit, or the Foster Care Allowance. MSD also has a role in administering Family Assistance Tax Credits, in cases where these Credits are paid by Inland Revenue to beneficiaries. Question 3 Have we had any feedback from the frontline about the family carer policy? No, we have not received any feedback from our frontline staff about the family carer policy. Question 4 Do we provide any information about the paid family carer payment when people go to Work and Income? As this is not a payment MSD administers, Work and Income does not provide any information about this assistance to people who approach it for financial assistance. If approached, Work and Income would refer them to Ministry of Health for information. 5

6 Question 5 What is MSD's ongoing role in the Family Carer policy? MSD has had no active ongoing role in the Funded Family Care Policy, which is administered by the Ministry of Health. MSD's main current roles in relation to family carers are the payment of benefits to carers outlined above, and its leadership of the New Zealand Carers' Strategy, which was developed through a partnership between government agencies, including the Ministry of Health, and the New Zealand Carers Alliance (a coalition of over 40 national not-for-profit organisations). The purpose of the Carers' Strategy is to improve support for family carers- particularly through the provision of information resources for individuals, families, whanau or aiga who support others who are disabled or have a health condition or injury and need help with their everyday living. A new Action Plan for the Carers' Strategy for 2014 to 2018 was launched in The Government drew on the knowledge and experience of the New Zealand Carers Alliance, international research, and public consultation in developing this plan. The Action Plan focuses on agencies delivering practical, meaningful outcomes for carers. For example, the Minister for Senior Citizens recently launched a suite of new information resources for carers, including enhancements to the carer website. Yours sincerely Sacha O'Dea General Manager Ageing, Disability and International 6

7 Annex One: Scenarios Scenario one Maria is single and 47 years old, and is eligible for both the family carer pament under the Funded Family Care Policy and the SLP (caring) benefit. She is paid the family carer payment for providing care for an adult relative for 27 hours a week. This means that: The amount Maria receives from the carer payment (before tax) is $17.91/ hour times 27 hours = $ /week. After the deduction of income tax (at the secondary tax rate of 18.95%) Maria receives $391.93/week from the family carer payment. The amount she receives from SLP (caring) is: o o o the full SLP rate of $ /week (after tax at "M") less the abatement on account of income of [($100 x 0.3) + ($ x 0.7)) = $ therefore the rate of SLP (caring) paid to Maria is $34.14/week (after tax at "M") Maria also has a long term health condition and has ongoing costs arising from this condition. She is eligible for a Disability Allowance payment of $35/week (non taxable). Therefore the total income Maria receives (after tax) is: $391.93/week + $34.14/week + $35.00/week = $461.07/week Scenario Two John is single and 39 years old. He is providing care for an adult relative for 40 hours a week and is receving the family carer pament under the Funded Family Care Policy. The amount he receives from the carer payment (before tax) is: $17.91/ hour times 40 hours= $ (before tax) /week. John meets the general eligibility criteria to receive SLP (caring). However, his income is above the abatement "cut-out" point for SLP {caring) of $533 (before tax) /week. His income is therefore too high for him to be able to receive SLP (caring). 7

8 Scenario Three Sarah is married and 66 years old. She is eligible for both the family carer payment under the Funded Family Care Policy and married couple rate of New Zealand Superannuation (NZS). Sarah provides care for an adult relative for fifteen hours a week. This means that: The amount she receives from the carer payment (before tax) is: $17.91/ hour times 15 hours= $ /week. After the deduction of income tax (at the secondary tax rate of 18.95%) she receives $217.74/week from the family carer payment The amount she receives from the married person rate of NZS is: $ /week (after tax at "M") Therefore the total income Sarah receives (after tax) is $217.74/week + $288.10/week = $505.84/week Sarah's husband receives the married person rate of NZS of $ /week (after tax at "M") Therefore the total amount Sarah and her husband receive (after tax) is $505.84/week + $ /week= $793.94/ week NB: figures in scenarios above may not align exactly with actual figures due to rounding. 8