Sickness and invalid's benefits: new developments and continuing challenges.

• Author: Lunt, Neil

Abstract

The proportion of the working-aged population receiving an Invalid's Benefit (IB) has increased steadily between 1994 and 2004, and numbers on a Sickness Benefit (SB) rose sharply in the early 1990s and have continued to increase between 2000 and 2005. New Zealand has witnessed considerable policy activity in the field of SB and IB, as well as disability policy more broadly. To date, there has been relatively little attention paid by academic commentators to the increased emphasis on working actively with SB and IB clients. This is despite the fact that the new directions signalled for SB and IB constitute nothing less than a paradigm shift. At the heart of change is the move beyond individuals--beyond focusing on either their disability or their lack of motivation.

This paper outlines the package of measures aimed at reforming Sickness and Invalid's Benefits, including the underpinning rationales. It situates these changes within the broader context of both active labour market policy and disability initiatives. SB and IB reform is a wide and challenging agenda, but one with the potential to deliver important economic and social outcomes. The paper reflects on five fundamental issues that will influence the longer-term success of SB and IB interventions: the social model, issues of partnership, "healthy welfare", mutual obligation, and investment social policy.

INTRODUCTION

From the 1990s, a dominant theme of welfare reform focused on shifting from passive welfare delivery to "active labour market policy". The "active social policy agenda" challenges many of the traditional ideas held by social policy, such as the clear demarcation of life stages (i.e. study, work and retirement), or that policy could be built on traditional gender roles and family forms. Instead, there is recognition of the increasingly multiple and "hyphenated" nature of social and economic life:

Social policies that work need to fit these new realities. They need to place greater emphasis on investment in people in order to help them change their lives for the better, better nurture children, reduce benefits payments, social exclusion and poverty and create a more cohesive society. (OECD 2005) Welfare policy is seen to require a better linkage with economic policy, as well as being in need of some "modernisation" to bring it in line with changed social, economic, demographic and attitudinal realities of the 21st century. A constituent of the realignment between economic and social policy has been the "work-first" approach to reducing poverty, and attempts to widen labour market opportunities as a route to fostering social inclusion.

The rise in numbers in receipt of disability benefits has been of shared concern for many Western governments, and has prompted greater policy attention being paid to those in long-term receipt of such benefits. (2) Measures have included reforming the benefit system and attempts to stimulate innovative service responses. Despite these aspirations, across the OECD, countries spend twice as much on disability related benefit programmes as they spend on unemployment (OECD 2003). (3) More recently, an emphasis on reducing the numbers on disability rolls has been complemented by the growing awareness of the important influence of work on overall wellbeing (for example, the UK White Paper, Department of Health 2005).

New Zealand has witnessed considerable policy activity in the field of Sickness Benefit (SB) and Invalid's Benefit (IB), as well as disability policy more broadly. The (velvet) revolution that has taken place around SB and IB must also be placed in the broader context of changes that have occurred in how "disability", "disabled people", "ability" and "capacity" are conceptualised. Under recent Labour-led governments, there have been significant developments across the field of disability policy and strategy. The first Labour term saw the launching of the New Zealand Disability Strategy Making a World of Difference (New Zealand Disability Strategy 2001). The Strategy was underpinned by a commitment to the social model of disability and was the result of lengthy consultation with the disability sector. The document's 15 key dimensions include education, health, employment, rights and leadership. It makes a broad commitment to a non-disabling society, and addresses the participation of particular target populations within the broader disability community.

One of the key differences between policy before and after 1999 within New Zealand has been the gradual move towards a social model of disability. The social model draws the distinction between ideas of "impairment" and "disability" (Oliver 1990). "Impairment" can be understood as a functional limitation; for example, a person may have limited hearing, not have the use of their own legs, or experience learning difficulties. Such impairments are "neutral" facts and whether they become a "disability"--a disadvantage for individuals who experience them--is contingent on the economic, social, cultural and political organisation of any particular society (Berger and Luckmann 1966, Oliver 1990, New Zealand Disability Strategy 2001).

Further activity within the disability sector in 1999 has seen a Minister for Disability Issues appointed for the first time, with duties set out under the New Zealand Public Health and Disability Act 2000. This has meant a voice within the Cabinet for disability issues and a strong Ministerial advocate who recognises the salience of disability issues, and the importance of a rights and opportunities agenda for New Zealand society. Within the public sector, an Office for Disability Issues was established in 2002, and, in early 2005, a consumer reference group was appointed to assist the Office in its work. The reference group has an advisory role in bringing issues to the attention of the Office and providing advice and feedback on the implementation of the New Zealand Disability Strategy.

It has long been apparent that many disabled people in receipt of disability benefits wish to work. According to Fully Inclusive New Zealand (Office for Disability Issues 2002):

Approximately 20% of people in receipt of Sickness Benefit and Invalid's Benefit also access vocational services. Informal research suggests that up to 80% of people on IB and SB want to work, so existing vocational services are not assisting all those that want assistance. So while SB and IB reform is driven from a social development portfolio, its overall success is inextricably linked to the implementation of the New Zealand Disability Strategy. At present there is a growing alignment in the priorities expressed by many within the disability sector and the objectives of the government around SB and IB. During consultations around the Disability Strategy:

Dominant themes were the need to be flexible in how work is defined, offered and rewarded, and the need to focus on what people experiencing disability can do. (New Zealand Disability Strategy Consultation, Employment/Business Development 2000:9, original italics) Flexible benefits were seen as a key dimension in making progress around employment opportunities--a point echoed by the Disability Strategy Sector Reference Group, who recommended the importance of providing more flexible income support benefits to facilitate work and training opportunities. This synchronicity between the disability communities' views and government priorities is not unimportant when considering the future direction and likely success of disability employment policy.

With a focus on outcomes, Pathways to Inclusion (Department of Labour 2001) made a commitment to phasing out sheltered workshops and reorienting service providers. Vocational services no longer fund services with purely therapeutic intent, such as day centres and related activities, and, in 2002, $44 million was allocated for employment support. It is recognised that such far-reaching changes would involve "a mindshift at all levels - among communities, employers, service providers, families/whanau and people with disabilities themselves" (Department of Labour 2001).

To date, there has been relatively little attention paid by academic commentators to the increased emphasis on working actively with SB and IB clients. This paper seeks to address such a gap and to:

* outline the package of measures aimed at reforming Sickness and Invalid's Benefits, including the underpinning rationales

* situate these changes within the broader context of both active labour market policy and disability initiatives

* assess the continuing challenges that exist within the New Zealand context.

THE BACKGROUND TO REFORMING SB AND IB

Sickness Benefit and Invalid's Benefit were introduced during the reforms of the first Labour Government of 1935. The Pension Amendment Act 1936 saw provision extended beyond war veterans, miners, and the visually impaired to include "invalids", and rates were increased and measures expanded to those with sickness in the Social Security Act 1938 (McClure 1998). "Invalid" beneficiaries were defined as permanently incapable of work and viewed as part of the deserving poor, and who required not only support but also insulation from the rigours of the competitive jobs market. Sickness benefit was payable in respect of temporary "incapacity" for work through sickness or accident, i.e. off work or working at a reduced level.

In contemporary times, the disadvantaged position of disabled people (4) is well documented. Disabled adults are far less likely to be in the labour force than nondisabled adults (36% of disabled adults were not in the labour force compared to 18% of non-disabled adults). Disabled people are less likely to be employed than non-disabled peers (57% compared to 71%) (Ministry of Health 2004). Disabled people are more likely to have no formal educational qualifications (39% of disabled adults in households reported that they had no...