Media Release

Growth In Sickness And Invalid Benefits

Tuesday, October 31, 2006

Just released Ministry of Social Development figures show a further increase in the numbers of people reliant on sickness and invalid's benefits. Totalling over 123,000 the figure is now three times the number on the unemployment benefit.

Asked by Kathryn Ryan, on yesterday's Nine to Noon show, if evidence exists that people are moving from the dole to sickness benefits, welfare commentator Lindsay Mitchell confirmed there is.

"There is a constant flow between benefits. Taking this into account the net gain from the unemployment benefit to the sickness benefit over the five years to April 2005 was 20,870. Over the same period the net gain from the sickness benefit to invalid's benefit was 26,302, bearing in mind the same beneficiary may have been transferred more than once.

The pathway itself is no new thing. But a yearly breakdown reveals that since 1999 the net gain from the unemployment benefit to the sickness benefit has increased steadily and significantly each year, decreasing slightly in 2005.

The increasing duration of stay on these benefits is also contributing to their growth. For instance in 1990 seventy one percent stayed on a sickness benefit for less than one year. Today that has dropped to 47 percent.

Other contributors to the growth are increasing rates of psychiatric and psychological illness (including stress and depression), de- institutionalisation, change in family structure and change in eligibility.

"The fastest growing household in New Zealand is the single household. Fewer people have partners to rely on if they fall sick or have an accident so more people rely on the state. And before the seventies, when the growth began, people not of 'good moral character and sober habits' and those whose incapacity for work was self-induced, did not qualify."

The reason most commonly given for the growth is the ageing population. But given the number of sickness and invalid's benefits have increased eight-fold since the early seventies, while the most relevant demographic, the over 40s, has not even doubled, ageing isn't high on the list of factors. Also, there are 6,800 more under-40 year-olds on these benefits than five years ago.
GP, Dr Richard McGrath, also interviewed on Nine to Noon, remarked on the increasing number of young people needing to go on a sickness benefit due to drug and alcohol problems. Statistics show since 2001 there has been a 50 percent increase in people aged 19 and younger going on a sickness benefit.

A Dominion Post editorial today says that most sickness and invalid benefits are legitimate. The OECD on the other hand estimated that across western countries only one third of people on disability payments were suffering disabilities severe enough to make paid work difficult or impossible.

"The problem for the government is this. When New Zealand last had unemployment as low as today, around 1986, there were 140,000 working age people on benefits. Today there are 282,000 while the population has only increased by a quarter. While they can claim success for overseeing a strong economy providing thousands of new jobs, they cannot claim success in stemming the growth of sickness and invalid benefits."

ENDS

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