Hard News by Russell Brown


On benefit fraud

Responses to Metiria Turei's confession of historic benefit fraud have fallen along the lines you would expect. The usual suspects on the right have leapt on it, others have expressed sympathy and the range of opinions on the political wisdom of speaking up so many years later is wide.

My response was yeah, me too.

It was 1991 and we'd arrived back from London with a new baby and not much else. The country was in the midst of a recession and, much as I wanted to earn money, there weren't any jobs.

So we made our own. I joined some friends to work on the revival of a street mag called Planet, and we worked really hard on it. But the problem was that we were all officially some shade of unemployed and were supposed to be available for other jobs should they materialise. Around the time of the second issue I worked on, we applied for funding under the Community Taskforce scheme.

It paid the same as the dole, but it meant we could do it without being hassled. It also meant that I could safely seek out even more work to try and improve the family's position – unlike the benefit, the taskforce income didn't abate if I earned anything else.

This had been a problem. I'd started to get some writing jobs for The Listener, which was great – it meant we could clear unpaid bills and buy the odd thing we needed. But when I dutifully declared the income, the consequences were terrible. Our benefit was sharply cut the following month, we struggled to buy food, and I recall thinking well, I'm not doing that again.

There was no way of spreading the income over a longer period, so if I happened to get paid twice in one month, we'd tip over to the higher abatement rate (from memory, it was triggered at $100 per week) and, between witholding tax and benefit abatement, I would lose nearly all of the income from the second job. We'd go forward only to be hauled back again. I recall hearing some windbag whingeing abut tax thresholds and thinking, mate, I'm paying an effective marginal marginal tax rate of 93%.

So for months, maybe even a year, I didn't declare, or under-declared, my sporadic income. Sometimes, I just declared the after-tax part of the payment. It seemed fairer.

But I was looking forward to going legit – which, unfortunately, took ages. And then, when the scheme was finally supposed to start, someone at Employment New Zealand hadn't ticked all the boxes, meaning we were delayed a further month. This was a real problem. I'd done several jobs in the past month, safe in the knowledge that I'd be free to earn by the time I was paid. And now, I wasn't. I didn't declare the income.

In issue 7 of Planet, in 1992, I interviewed Joan McQuay, a former DPB mum who had become district manager of Income Support. It was significant that someone had gone from a benefit to such a senior role and I liked her. We talked about what I described in the story as "the outmoded declarations system, which simply doesn't fit into the 90s work environment of freelancing and casual work". When I pointed the implications of the system – that 93% marginal tax rate – she was actually taken aback and agreed with me that it seemed onerous.

While we were waiting for the damn scheme to start, a friend who worked at Income Support (this was pre-Winz) tipped us off to a forthcoming amnesty. Great. We'd just make one mighty confession and it would all be sorted. I knew people who did just that. But – I am not making this up – the day before the amnesty was due to be announced we discovered that I was being investigated.

This, I hasten to add, had nothing to do with Joan McQuay. In retrospect, writing in a national magazine just wasn't a very good way of keeping things on the downlow. It simply happened to be what I could do. So I had to go back through all my records and argue down their assessment of the overpayment, from more than $8000 to $5500.

We'd have to pay it back. But the same friend inside the building told us that there was no minimum repayment rate. They could propose one, but we could reject it, offer a lower rate and they'd have to take it. So we did: $5 a week, for years.

By 1996, mindful of there being another baby on board, I'd departed Planet and taken up the offer of a job as a full-time IT journalist, where I was paying more tax than we'd ever received in benefits. I kept the repayment at $5 a week, on principle. My debt to society was only fairly recently cleared.

I don't have any sweeping moral proclaimation to make about fiddling the system. In principle, I don't like it. But I do know, and have always tried to recall, how hard keeping a family fed and housed on a benefit was after the 1991 cuts. And I know that faced with the same choices, I'd probably do the same thing again.

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