Future Directions – Working for Families
This page provides background information on the Future Directions policy work and the Working for Families initiative. The Cabinet Papers and Minutes that contributed to this work are listed below.
Background
In 2001 Cabinet requested that MSD, in consultation with other agencies, provide advice on the medium term reform of social assistance, including reform of Family Income Assistance, working age benefit simplification, and further Making Work Pay measures.
MSD provided an initial report to the Minister on 19 December 2001, which discussed:
- the future process for the working age social assistance reform work,
- thinking around the framework and key issues confronting the social assistance system, and
- possible reform approaches/options.
In June 2002, a draft set of six papers was provided to the Minister of Social Services and Employment for consideration. These papers covered:
- a proposed programme of action for reform of social assistance from 2003 to 2006
- key issues confronting the social assistance system
- initial steps that could be taken to reform Family Income Assistance, Housing Assistance, Hardship Assistance, and
- a proposed Future Vision for the social assistance system.
These papers evolved over the next few months. They were modified in response to feedback and circulated in several different drafts. In November, two draft Cabinet papers were submitted to the Minister of Social Services and Employment:
- Future Directions for Social Assistance: The Case for Change, which presented the case for reforming social assistance to families with dependent children, and
- Future Directions for Social Assistance: Reform of Social Assistance to Families, which sought Cabinet’s agreement to undertake further policy development during 2003 on the reform of Family Income Assistance.
The second paper – Future Directions for Social Assistance: Reform of Social Assistance to Families – was agreed by Cabinet Social Development Committee and confirmed by Cabinet in early December.
The Future Directions project broadened in the 2003 New Year to include work on:
- Accommodation Supplement,
- third-tier hardship provisions, such as Special Benefit, and
- the Invalid’s Benefit.
A set of five draft Cabinet papers was developed by June 2003 for consideration by Ministers. These covered family income assistance and making work pay, reform of the structure of main working age benefits, housing assistance and re-design of hardship assistance provisions.
As a consequence, Ministers asked for a range of high level policy options to be developed for consideration across a broad fiscal spectrum, ranging upwards from $100 to a ceiling of around $500 million a year, which would improve assistance for low income families with children, and encourage families to move into and remain in employment. A paper presented on 30 July 2003 set out a process for developing policy proposals.
A paper was provided on 22 August 2003 to Joint Ministers, which set out eight options for reform, loosely grouped by fiscal cost into three categories: $100 million, $300 million and $500 million a year. Each option had a different focus, varying the balance between work incentives and income assistance. The options were illustrative, as there was scope to vary the design parameters and scale the expenditure. Ministers chose to progress work around Option 2 and requested that officials cost a number of variants above the $500 million per annum threshold to help clarify key parameters.
From October 2003 onwards, a large number of briefing papers were produced to enable decision-making on policy design and details of the reform package. The substantive decisions on the Working for Families package were made on 15 December 2003. At this meeting Ministers agreed to the key components of the package including rates of Family Support, the In Work Payment, the Family Income Assistance abatement thresholds, and changes to the Accommodation Supplement. Ministers agreed to an additional increase to Family Support from April 2007 at a meeting on 5 February 2004.
Work on the Childcare Package continued into early 2004 with substantive decisions being taken in February to coincide with discussions on the Early Childhood Education funding review.
Cabinet agreed to decisions on the Working for Families package on 26 April 2004.
Information sharing
As part of the Working for Families, MSD has entered into an Information Matching Agreement with Inland Revenue. This agreement provides information to Inland Revenue, facilitating better client access to Family Income Assistance and reducing year-end debt with Inland Revenue.
A notice published in the Gazette on Thursday 24 March provides more information on the technical details of the information exchange.
