Carer's benefits

Overview

This group of main benefits includes Domestic Purposes Benefits - Sole Parent, Domestic Purposes Benefits - Care of Sick or Infirm, Domestic Purposes Benefits - Women Alone and Emergency Maintenance Allowances. An Emergency Maintenance Allowance is an emergency benefit paid to carers who don't meet the eligibility criteria for a Domestic Purposes Benefit - Sole Parent but who are alone, caring for children and unable to support themselves without financial assistance.

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Eligibility for carer's benefits

Domestic Purposes Benefit

Between 1 April 1997 and 10 March 2003, clients receiving a Domestic Purposes Benefit – Women Alone were subject to a part-time work test.

Between 1 April 1997 and 31 January 1999, clients receiving a Domestic Purposes Benefit – Sole Parent were subject to a part-time work test if their youngest dependent child was aged 14 years or over.

Between 1 February 1999 and 10 March 2003, clients receiving a Domestic Purposes Benefit – Sole Parent were subject to:

• a full-time work test if their youngest dependent child was aged 14 years or over
• a part-time work test if their youngest dependent child was aged 6-13 years
• a requirement to attend an annual interview with a Work and Income case manager if their youngest dependent child was aged under six years (the purpose of this interview was to plan how the client would enter paid work once their youngest dependent child had reached six years of age).

Since the removal of work-test obligations on 10 March 2003, clients receiving a Domestic Purposes Benefit - Sole Parent or a Domestic Purposes Benefit - Women Alone have been obliged to meet the requirements of the Personal Development and Employment Plan process if required to by their case manager. This process involves developing and implementing a plan that is aimed at assisting clients in moving toward employment, and therefore toward economic and social participation in society.

A Domestic Purposes Benefit - Sole Parent is available to the parent of a dependent child aged under 18 years who lives with them when that parent:

• is single, and not living with the other parent or with another partner, or
• has lost the support of the other parent (eg the other parent is in prison or rehabilitation).

To be eligible for a Domestic Purposes Benefit - Sole Parent, clients must meet residency and income qualifications and either:

• be aged 18 years or over, or
• be aged 16 or 17 years and have been legally married or in a civil union.

Applicants for a Domestic Purpose Benefit - Sole Parent are, with some exceptions, required to:

• name the other parent of the child or children they are caring for
• apply for Child Support.

Refusal to name the other parent without good reason results in a lower level of benefit being payable.

Child Support paid by the liable parent, up to the level of the Domestic Purposes Benefit - Sole Parent, is retained by the Crown to offset the cost of the benefit. Please refer to Inland Revenue publications for information on the collection of Child Support.

Domestic Purposes Benefit - Care of Sick or Infirm

A Domestic Purposes Benefit - Care of Sick or Infirm is available to people who are aged over 16 years and are caring on a full-time basis for someone (other than a partner) who is in their home and who would otherwise be receiving:

• hospital care,
• rest home care
• residential disability care
• extended care services provided for severely disabled children and young people, or
• care of an equivalent kind.

Residency and income qualifications must also be met.

Domestic Purposes Benefit - Women Alone

A Domestic Purposes Benefit - Women Alone is available to unsupported women without dependent children who become alone or lose the support of a partner after:

• turning 50 years of age
• either:
  • caring for dependent children for at least 15 years
  • caring full-time for a sick or frail relative for at least five years, or
  • being supported by their partner for at least five years.

Residency and income qualifications must also be met.

Emergency Maintenance Allowance

An Emergency Maintenance Allowance is available to people who don't meet the eligibility criteria for a Domestic Purposes Benefit - Sole Parent but who are alone, caring for children and unable to support themselves without financial assistance. In some circumstances, it can also be paid to clients who are experiencing domestic violence but who are still living with their partner or spouse. Around a third of clients receiving an Emergency Maintenance Allowance are aged 16–17 years.

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Trends in the number of clients receiving a carer's benefit

The number of clients receiving a carer's benefit decreased between 2004 and 2007, before rising slightly in 2008 (see table 3.9). Since 2003, almost all of the working age recipients of these benefits have been receiving a Domestic Purposes Benefit - Sole Parent. Recent decreases in the number of working age carer's benefit recipients largely reflect decreases in numbers receiving a Domestic Purposes Benefit - Sole Parent. Growth over the last year in numbers receiving Domestic Purposes Benefit - Care of Sick or Infirm reflects at least in part the impact of a Work and Income campaign aimed at ensuring that clients are receiving their full and correct entitlements.

Table 3.9 Trends in the types of carer's benefit received

Type of carer's benefit received at the end of June	2004 Number	2005 Number	2006 Number	2007 Number	2008 Number
	Working age clients receiving a carer's benefit1,2
Domestic Purposes Benefit - Sole Parent	101,579	97,882	93,348	87,601	86,695
Domestic Purposes Benefit - Care of Sick or Infirm	3,538	3,775	4,131	4,485	5,246
Domestic Purposes Benefit - Women Alone	3,031	3,043	2,897	2,838	2,842
Emergency Maintenance Allowance	745	947	1,265	1,543	1,657
Total received by working age clients	108,893	105,647	101,641	96,467	96,440
	Other clients receiving a carer's benefit1,2
Total received by other clients	633	683	690	644	717
	All clients receiving a carer's benefit1,2
Total	109,526	106,330	102,331	97,111	97,157

Notes

1. Carer's benefits comprise Domestic Purposes Benefits - Sole Parent, Domestic Purposes Benefits - Care of Sick or Infirm, Domestic Purposes Benefits - Women Alone and Emergency Maintenance Allowances.
2. Numbers of clients recorded in SWIFTT as receiving carer's benefits at the end of June.

Since 2004, almost all working age recipients of Domestic Purposes Benefits - Sole Parent or Emergency Maintenance Allowances had at least one dependent child aged under 14 years, including around 48% who were caring for at least one child aged under five years (see table 3.10).

Table 3.10 Trends in the age of the youngest child dependent on working age recipients of Domestic Purposes Benefits - Sole Parent or Emergency Maintenance Allowances

Age of youngest dependent child at the end of June	Working age clients receiving a Domestic Purposes Benefit - Sole Parent or an Emergency Maintenance Allowance1
	2004 Number	2005 Number	2006 Number	2007 Number	2008 Number
0-4 years	48,336	46,362	44,263	42,530	43,147
5-9 years	29,218	28,041	26,514	24,296	23,283
10-13 years	15,870	15,248	14,438	13,273	12,934
14-17 years	8,606	8,902	9,077	8,710	8,615
18-19 years	218	195	240	260	232
Not caring for children2	76	81	81	75	141
Total	102,324	98,829	94,613	89,144	88,352

Notes

1. Numbers of working age clients recorded in SWIFTT as receiving a Domestic Purposes Benefit - Sole Parent or an Emergency Maintenance Allowance at the end of June.
2. Clients may continue to receive a Domestic Purposes Benefit - Sole Parent or an Emergency Maintenance Allowance for a short period after the child in respect of whom the benefit was paid has left their care. In addition, clients may be paid a Domestic Purposes Benefit - Sole Parent or an Emergency Maintenance Allowance at a reduced rate while the custody and care circumstances of the children involved are clarified.

Table 8.1 shows trends since 1973 in the number of clients receiving carer's benefits.

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Trends in the proportion of working age people receiving a carer's benefit

The proportion of all working age people in the New Zealand population receiving a Domestic Purposes Benefit - Sole Parent or an Emergency Maintenance Allowance at the end of June each year has decreased over the last four years. Since 2004, 25-39 year olds and 18-24 year olds have been more likely than older working age people to be receiving one of these benefits (see figure 3.4). This reflects in part patterns in the ages of women having children and in the ages of people when relationship breakdown occurs.

Since 2004,people aged between 18 and 49 years have become less likely to be receiving a Domestic Purposes Benefit - Sole Parent or an Emergency Maintenance Allowance, while the likelihood of older people receiving these benefits has shown little change (see figure 3.4).

figure 3.4 Trends in the proportion of working age people receiving a Domestic Purposes Benefit - Sole Parent or an Emergency Maintenance Allowance, by age

Note

1. Proportion shows:
   1. number of people in age group recorded in SWIFTT as receiving a Domestic Purposes Benefit - Sole Parent or an Emergency Maintenance Allowance at the end of June, divided by
   2. Statistics New Zealand final estimate of the resident population in age group at the end of June.

See table A3.6 for a summary of the SWIFTT data underlying figure 3.4.

Since 2004, very small numbers (0.2% or less) of working age people have received a Domestic Purposes Benefit - Care of Sick or Infirm, and a similar proportion have received a Domestic Purposes Benefit - Women Alone.

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Trends in carer's benefits granted

The number of carer's benefits granted has increased in the last year after decreasing over the previous three years. Of the working age clients granted these benefits since 2003/2004 (see table 3.11):

• around 32% had not received a main benefit for at least two years
• between 27% and 30% had transferred between benefits or districts.

Table 3.11 Trends in the length of periods since clients granted carer's benefits last received any main benefit

Period since client last received any main benefit	2003/2004 Number	2004/2005 Number	2005/2006 Number	2006/2007 Number	2007/2008 Number
	Carer's benefits granted to working age clients1,2
None (clients transferring between benefits or districts, or transferring from the same type of benefit)3,4	10,954	10,217	9,260	9,447	10,035
Under 6 months	6,738	6,783	6,402	6,559	6,748
6-12 months	3,584	3,586	3,640	3,341	3,819
12-18 months	2,115	2,008	2,169	1,917	2,340
18 months-2 years	1,565	1,433	1,474	1,372	1,598
2-4 years	3,434	3,295	3,162	3,061	3,393
Had not received a main benefit in previous four years	8,214	7,982	8,035	7,774	8,561
Total granted to working age clients	36,604	35,304	34,142	33,471	36,494
	Carer's benefits granted to other clients1,2
Total granted to other clients	842	894	906	940	1,054
	Total carer's benefits1,2
Total	37,446	36,198	35,048	34,411	37,548

Notes

1. Carer's benefits comprise Domestic Purposes Benefits - Sole Parent, Domestic Purposes Benefits - Care of Sick or Infirm, Domestic Purposes Benefits - Women Alone and Emergency Maintenance Allowances.
2. Number of successful applications for carer's benefits recorded in SWIFTT during years ended June.
3. Includes only a minority of transfers of benefits between districts. Most such transfers are accomplished without cancelling and re-granting benefits.
4. Transfers from the same type of benefit may occur when clients receiving hardship assistance become eligible for statutory benefits (eg a transfer from an Emergency Maintenance Allowance to a Domestic Purposes Benefit - Sole Parent), or may reflect a change in client circumstances (eg a client whose dependent children have grown up and left home may transfer from a Domestic Purposes Benefit - Sole Parent to a Domestic Purposes Benefit - Women Alone).

The number of Domestic Purposes Benefits - Sole Parent and Emergency Maintenance Allowances granted to working age clients has increased in the last year after decreasing over the previous three years (see table 3.12). Over this period, nearly all (around 93%) of the working age clients granted these benefits had at least one dependent child aged under 14 years, including around 60% with at least one dependent child aged under five years.

Table 3.12 Trends in the age of the youngest child dependent on working age clients who were granted a Domestic Purposes Benefit - Sole Parent or an Emergency Maintenance Allowance

Age of youngest dependent child when benefit granted	Domestic Purposes Benefits - Sole Parent and Emergency Maintenance Allowances granted to working age clients1
	2003/2004 Number	2004/2005 Number	2005/2006 Number	2006/2007 Number	2007/2008 Number
0-4 years	20,192	19,158	18,555	18,318	19,586
5-9 years	6,956	6,637	6,272	6,060	6,418
10-13 years	4,000	3,793	3,626	3,353	3,762
14-17 years	2,191	2,248	2,255	2,164	2,402
18 years	13	17	24	15	13
19 years or over	1	0	0	0	0
Unspecified	0	0	14	0	0
Not applicable (no child linked to the benefit)2	64	61	59	65	82
Total	33,417	31,914	30,805	29,975	32,263

Notes

1. Numbers of successful applications from working age clients for Domestic Purposes Benefit - Sole Parent or Emergency Maintenance Allowances recorded in SWIFTT during years ended June.
2. Clients have been granted these benefits while the custody and care circumstances of the children involved are clarified. In most cases, these benefits are paid at a rate similar to Unemployment Benefits received by single people with no children.

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Trends in cancellations of carer's benefits

The annual number of carer's benefits cancelled has decreased in the last year, after fluctuating in the previous two years. Reasons for clients cancelling carer's benefits have shown little change between 2006/2007 and 2007/2008 (see table 3.13). Between 2003/2004 and 2006/2007, however, the proportion of working age clients cancelling carer's benefits who:

• entered paid work has increased (from 32% to 41%)
• cancelled their benefits for reasons other than entering paid work or transferring to another benefit, pension or district decreased slightly (from 49% to 45%) (The most common "Other" reason for cancelling a carer's benefit was clients entering another relationship).

Table 3.13 Trends in reasons for clients cancelling carer's benefits

Reason for cancellation
	2003/2004 Number	2004/2005 Number	2005/2006 Number	2006/2007 Number	2007/2008 Number
	Carer's benefits cancelled by working age clients1,2
Obtained paid work3	12,012	13,622	14,525	16,223	14,754
Transferred to another benefit, pension or district4,5	7,151	6,477	6,096	5,855	5,687
Other3	18,464	18,861	18,077	17,195	16,432
Total cancelled by working age clients	37,627	38,960	38,698	39,273	36,873
	Carer's benefits cancelled by other clients1,2
Total cancelled by other clients	242	304	346	370	351
	Total carer's benefits cancelled1,2
Total	37,869	39,264	39,044	39,643	37,224

Notes

1. Carer's benefits comprise Domestic Purposes Benefits - Sole Parent, Domestic Purposes Benefits - Care of Sick or Infirm, Domestic Purposes Benefits - Women Alone and Emergency Maintenance Allowances.
2. Numbers of cancellations of carer's benefits recorded in SWIFTT during years ended June.
3. Due to recoding of reasons for cancelling main benefits, these figures may not reconcile with those published in previous years.
4. "Transferred to another benefit [or] pension" includes some transfers from main benefits to New Zealand Superannuation, including those shown previously as "Qualified for New Zealand Superannuation".
5. "Transferred to another … district" represents cancellations undertaken so a client's benefit can be administered from a different Work and Income service centre. These changes may reflect a change of address by the client or an administrative decision by Work and Income. A majority of transfers of benefits between districts are completed without cancelling the client's benefit, and therefore are not included above.

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Trends in expenditure on carer's benefits

Expenditure on carer's benefits has decreased over the last three years, following increases between 2000/2001 and 2004/2005 (see table 3.14). This decrease reflects both reduced numbers of clients receiving these benefits and reductions in levels of assistance paid following the shift of the child component of carer's benefits into the Working for Families Tax Credit from 1 April 2005.

Changes between 1997/1998 and 2004/2005 in annual expenditure on carer's benefits (see table 3.14) reflect a combination of changes in the numbers of clients receiving one of these benefit and adjustments in the levels of assistance paid. Between 2000/2001 and 2004/2005, the impact of increased levels of supplementary benefits outweighed that of fluctuating numbers of clients receiving carer's benefits.

Table 3.14 Trends in annual expenditure on carer's benefits¹

Year ended June	Expenditure on carer's benefits2,3,4 ($m)
1995/1996	1,493
1996/1997	1,608
1997/1998	1,706
1998/1999	1,682
1999/2000	1,652
2000/2001	1,637
2001/2002	1,650
2002/2003	1,690
2003/2004	1,777
2004/2005	1,799
2005/2006	1,750
2006/2007	1,706
2007/2008	1,697

Notes

1. Carer's benefits comprise Domestic Purposes Benefits - Sole Parent, Domestic Purposes Benefits - Care of Sick or Infirm, Domestic Purposes Benefits - Women Alone and Emergency Maintenance Allowances.
2. Expenditure on carer's benefits in years ended June, including expenditure on supplementary benefits provided to recipients of a carer's benefit.
3. Expenditure shown is net of taxation, adjusted to payment periods based on a standard 30-day month, and smoothed using a three-month moving average.
4. Expenditure data in this table differs from, and should not be cited as, MSD's official measure of expenditure on financial assistance provided to clients.

Monthly expenditure on carer's benefits shows a small seasonal peak in the latter part of each fiscal year (see figure 3.5). These peaks reflect the Training Incentive Allowance payments and benefit advances made at the start of the school/academic year to carer's benefit recipients who have children attending school or who are themselves undertaking approved training.

A downward trend in levels of monthly expenditure from 2004/2005 (see figure 3.5) reflects both the shift of the child components of carer's benefits into the Family Tax Credit from 1 April 2005 and the decrease in the number of clients receiving carer's benefits.

figure 3.5 Trends in monthly expenditure on carer's benefits¹

Notes

1. Carer's benefits comprise Domestic Purposes Benefits - Sole Parent, Domestic Purposes Benefits - Care of Sick or Infirm, Domestic Purposes Benefits - Women Alone and Emergency Maintenance Allowances.
2. Monthly expenditure on carer's benefits and on supplementary benefits paid to recipients of a carer's benefit.
3. Expenditure shown is net of taxation, adjusted to payment periods based on a standard 30-day month, and smoothed using a three-month moving average.
4. Expenditure data in this graph differs from, and should not be cited as, MSD's official measure of expenditure on financial assistance provided to clients.

Table 8.2 shows trends since 1973 in expenditure on carer's benefits, including expenditure on supplementary benefits paid to people receiving a carer's benefit.¹

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¹ From 1996, the expenditure data shown in table 8.2 reflects deductions for debts established and for clients receiving these benefits as well as an overseas pension. The data in table 3.14 and figure 3.5 doesn't reflect these deductions.