Louise Upston. Photo: RNZ / Reece Baker
Beneficiaries sanctioned with money management cards will often be unable to pay rent, government data shows, putting them at risk of homelessness.
The sanction for non-complying Jobseekers would lock half their benefit into payment cards that cannot be spent on rent - but official statistics from MSD show the average beneficiary is already spending more than 53 percent of their income on housing costs.
And although total incomes for beneficiaries have increased by 3.8 percent - $18 a week - that becomes a 0.3 percent decrease when inflation and housing costs are taken into account.
One beneficiary RNZ spoke to says it already feels like the system's punishing them for being poor - and the changes will make it harder for them to get back into work.
The minister says that's not the case, that money management cards will only be used as a sanction for non-compliance, and it's easier than the current approach of benefit cuts.
The Green Party says the government could simply not use sanctions, and the money management approach will only force beneficiaries onto the street.
Benefit cards unable to pay rent
The government announced in August it would be bringing in money management cards as a non-financial sanction on beneficiaries, the legislation passing in December.
MSD confirmed to RNZ the cards - being introduced from 26 May - would see beneficiaries' Jobseeker payments split, with half going onto a payment card unable to be used on rent.
"The Money Management card will be able to be used at grocery, transport, healthcare (including prescriptions) and education suppliers ... [it] cannot be used on other expenses such as rent or utilities," general manager income Shannon Soughtton said.
"Clients will continue to receive any supplementary assistance they are entitled to, for example their Accommodation Supplement and Disability Allowance, paid into their bank account."
It will be one of four non-financial sanctions brought in alongside community service, mandatory training courses, or a month of job-search activities and reporting back to the ministry, part of a ramping up of the use of sanctions.
Sanctions are imposed on beneficiaries who fail to comply with Ministry of Social Development (MSD) requirements, like making a jobseeker profile and attending compulsory work seminars. It's an extension of cards already in place for Youth beneficiaries and Food Grants.
But for Sara*, a 30-something beneficiary, more than 80 percent of her benefit goes to rent. Work and Income pays directly into her landlord's bank account, an amount that's still well below the median rent price.
"I was on the housing wait list for a good long time and I never got anything ... the housing lady straight up told me 'you don't have no kids, you're not sick or disabled physically in any way, you're not going to get a house."
On the breadline
After rent and ongoing debt payments including to MSD, Sara's left with less than $50 a week for food, water and phone bills. Some weeks, she said, she was living on two-minute noodles and bread.
"Basically it's kind of like being punished for not having money, punished for being poor, punished for ... living day to day, punished for being not well," she told RNZ. "I could try Marmite but actually Marmite's a bit expensive now, isn't it?"
She is on the medical Jobseeker allowance with depression and PTSD after a traumatic family event. She's since suffered nerve damage, and said despite that she had been told she would face case management if she asked for further food grants.
"I'm really stuck on food this week again ... they've told me that this is the last time they'll help me with food, and if I call back for any help, not just for food, for any help, that I'll be case managed from now on ... because if I budgeted properly, I wouldn't need the help."
Sara said it seemed impossible to her for anyone to live off the less than $50 she was given to each week.
"If someone even in government or MSD can ... week in, week out, for two months, I will bow down and I will say 'oh, don't need any help'. I will not ever ask for help again."
Sanctions at MSD's discretion
Soughtton said money management would only be applied to the small percentage of beneficiaries who did not comply, and MSD would determine which of a range of sanctions was the best option.
"If imposing Money Management could impact their ability to meet these costs, another sanction may be more appropriate," she said.
Under the government's traffic light system for beneficiaries, the vast majority - 98.6 percent - are rated as up to date with their obligations.
Social Development Minister Louise Upston said such a sanction was a temporary measure, and a better one than the financial sanctions currently available.
"This is all about making sure those who are on a Jobseeker benefit are taking the steps, going to an interview, having an up to date CV, taking a job if offered, those are the things that will help more people get off welfare and into work," she said.
"At the moment, the only option available is for somebody to have their benefit reduced in half or cut completely, so it's giving flexibility - but really looking at an individual circumstances to see what will have the greatest impact and what will help them on their job-seeking mission."
Green Party Social Development spokesperson Ricardo Menendez March, however, said that was "a lie".
"Benefit sanctions are a political choice, the government could choose to not implement those rather than going down a path of pushing people into more hardship, more poverty, more homelessness."
The Greens have committed to ending benefit sanctions.
Green Party Social Development spokesperson Ricardo Menendez March. Photo: RNZ / Samuel Rillstone
MSD's annual report in December also showed nearly a quarter of benefit payments were not being made correctly.
Asked how the ministry could be trusted to handle its discretion correctly when applying sanctions, Upston said the incorrect payments were a broader issue and she had been looking into it.
"We do want to make sure that beneficiaries are paid the right amount. In too many cases, they are paid too much, that then leads to a debt which is also stressful for a beneficiary. So there is definitely more work to do and I've asked MSD to look at some options."
Sara said the vast majority of beneficiaries only wanted "a bit of help to get their life back on track".
"I would love to get back on track, but how do I? I would need help to just put food on the table, get myself physio, get myself a little bit of therapy for my other stuff ... have the support to get myself healthy enough to actually get out there, back in work."
Limited spending
Sara said the availability of stores when she got a Food Grant added to her card was very limited.
"They tell me each time I call for any help, 'did you go to the [farmers'] market for veggies? Did you go to a bargain shop for things?'. I can't use the green card in the market," she said.
"There are definitely other places that are better and cheaper ... but you can't use those cards in those places."
In her suburb, the only shops the Food Grant card can be used at are the main supermarkets, the Mad Butcher, a couple of discount meat and fish shops, and one dairy.
Two other stores are listed on the ministry's website, but an internet search shows them as permanently closed.
MSD said the new card would be able to be used with suppliers who already accepted food grants, and the final list was still being finalised ahead of the card's introduction.
'They really belittle you'
It doesn't help Sara that she doesn't have - and couldn't afford - a car. Sometimes she saves up money to pay her neighbour to drive her if she really needs to go somewhere.
She normally would take the bus, or walk, but a recent injury made even that more difficult. Unable to afford to see the doctor, she went to Work and Income for another loan.
It took a week - and a budget report - to get the payment, by which time the injury was worse. Now she will need physiotherapy - another expense she can't afford.
"The system as it stands is not helping me get better. It's helping me get worse. It's making the situation worse week after week, day after day," she told RNZ.
She said the only times she was treated with respect by Work and Income was if she was being supported by advocates or other supporters, or if there had been negative stories in the media.
"They really belittle you and make you feel like you're so insignificant and you're so bad for asking for even the tiniest little, smallest bit of help and empathy.
"Next is it going to be 'can I breathe' if you need to breathe? Or if you need to go bathroom you're going to have to ask MSD ... it shouldn't be so hard to live. I haven't done anything wrong but it feels like I'm being punished."
Upston said the government's approach was about supporting people into work.
"Despite there being challenging economic conditions, we've seen a higher proportion of people leaving the job seeker for benefit for work than we did a year ago. And that's what we're focused on," she said.
"Look ... it's really challenging being on a benefit. I've been on one myself. What we want to do is see more people in work, which is why we've got practical support available to them. But it's also looking at the fact that people do have to take steps themselves, and we expect them to."
* Not her real name, a psuedonym has been used to protect her identity
