Splitting to double benefit doesn’t add up

Another sign that something’s rotten in the welfare state: couples are splitting to get extra benefit.

A community leader in New Zealand’s “DPB capital” of Kawerau says 70 per cent of those claiming the benefit in the town have partners “round the back door”.

Kay Brereton of the Beneficiary Advocacy Federation said couples who might be getting $200 below their living costs on the $324 weekly couple unemployment benefit were being tempted to split.

One could then get $278 on the domestic purposes benefit (DPB) and the other could get $194 on the single dole – a total of $472, and almost $150 extra a week.

“In the current financial reality, more and more couples will be looking to maximise their income,” Ms Brereton said.

People living separately and claiming two benefits would get more than if they lived together. That’s because their outgoings on rent, food, power and other basic costs would be lower for one household than two.” But they’d spend more too because their outgoings on rent, food, power and other basic costs would be higher for two households than one.

Couples who deliberately arrange their affairs by living apart to maximise benefit payments are committing fraud. But as Lindsay Mitchell says: Forget  illegal. What about immoral?

Her post DPB – same story, different decade is also pertinent as is Deborah Coddington’s column time to wake up to reality of child-bashing shame.

The benefit which was designed to give temporary help to women and children leave hopeless relationships,  still does for some. But it’s a trap for others and is one of the factors in our appalling record of child abuse.

5 Responses to Splitting to double benefit doesn’t add up

  1. pdm says:

    HP this has been going on for years. He or she or I suppose these days he/he or she/she moves out and lives elsewhere in a cosy arrangement.

    Then they drop in and stay overnight 3 or 4 times a week for a bit of nookie. WINZ generously adjusts the benefits for both – upwards.

    Money for jam as they say.

  2. Andrei says:

    Couples who deliberately arrange their affairs by living apart to maximise benefit payments are committing fraud. But as Lindsay Mitchell says: Forget illegal. What about immoral?

    Rich people deliberately arrange their affairs to maximize income and benefits – MPs who essentially make the rules are amongst the most egregious offenders.

    What allows the whole system work of course are the people who get up a 5am to milk the cows.

  3. Lindsay says:

    HP, I am slightly confused by your post. You say splitting doesn’t add up but then “People living separately and claiming two benefits would get more than if they lived together. That’s because their outgoings on rent, food, power and other basic costs would be lower for one household than two.” Perhaps you meant to say “would not get more”. An understandable argument.

    However most will get a good part of their rent paid for through the accommodation supplement. They can claim non-recoverable special needs grants and temporary additional support to cover other costs. And they take in other boarders, double up with other families. If you have only ever known overcrowding then it’s not the hardship many might view it as.

    Also, missing from yesterday’s news was that both partners can now claim the DPB. This came about after a Rotorua group of fathers forced an out- of- court settlement with WINZ to allow this to happen if the custody of children was split. What this additionally allows of course is the father (who would previously have been on the unemployment benefit) to avoid work-testing. After National introduces work-testing when the youngest turns six the cynic in me imagines that the mother will be busy producing ‘one for me, one for you’.

  4. homepaddock says:

    PDM – sadly yes.

    Andrei – sadly people on any income will play the game, sometimes within the rules, sometimes not.

    Lindsay: What I meant to say (and have now corrected) was: But they’d spend more too because their outgoings on rent, food, power and other basic costs would be higher for two households than one.

    However, from what you say the benefit system compensates for that so they may be better off apart.

  5. Gravedodger says:

    This is not new news.
    Over 40 years ago I was puzzled by the significantly higher values on corner section properties in poorer areas of CHCH and was alerted to the significant advantage of two possible addresses of the connecting streets either as owned or rented dwellings,for the ability to increase benefit income.
    This naive country boy was quite shocked that people would even think like that.

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