The government's In-Work Tax Credit (formerly named the In-Work Payment) is part of its Working for Families package, which provides support to families with children on low and middle incomes. The IWTC is worth $60 per week for our poorest families with 1-3 children. However those children whose parents cannot work the required number of hours or are on an income-tested benefit are not eligible for this money.
CPAG says that this is discrimination, on the basis of parental work status, and has filed a legal case challenging the In-Work Tax Credit and its predecessor, the Child Tax Credit. The case is now being heard by the Human Rights Review Tribunal in Wellington. Go to the bottom of this page for the latest updates.
What is the best possible outcome of this case?
For CPAG, the best possible outcome would be for government to increase its Family Tax Credit* by enough to completely replace the IWTC. The poorest children would gain significantly, all families with children would have improved income security in the event of illness or redundancy preventing parents from working - and no-one would be worse off. The CPAG case could then be dropped.
Failing this, a ruling in favour of CPAG would declare that the In-Work Tax Credit is inconsistent with the Human Rights Act. This would have moral force, but could not require government action to remove the discrimination.
Expressions of public support for the case are therefore vital and may do much to help bring about changes in policy and the social environment from which it - and children - are born.
*formerly known as Family Support, FTC supports low and middle income families with children as part of Working for Families.
History of the case:
In 1996, instead of giving an overdue Family Support inflation catchup to boost all low family incomes, the National Party-led government introduced the Child Tax Credit (CTC). The CTC's $15 per child per week was available only to poor families who were not receiving any core benefit. The idea, government said, was to reward work effort - but why was this done at children's expense?
Considerable outrage from the Opposition on its introduction did not change things. Annette King said “..it isolates beneficiaries from other families - treats them like lepers and worst of all it treats their children differently - what is different about a beneficiary child? Does that child look different when she or he goes to school? Yes, that child probably does look different because of the circumstances of the family—but also the government wants everyone to know that he or she is different.”
Worse was to come. In 2006 under a Labour-led government the CTC was replaced by the more generous and even more selective In-Work Payment (now renamed the In-Work Tax Credit - IWTC), designed to reward only those children with employed parents. The rest were, as CPAG has shown, Left Behind.
Employment is central to family life, especially in New Zealand where many parents work long hours for low wages. But CPAG believes it is unacceptable to use children's needs as leverage in the fickle parental employment market. Family income assistance must be stand-alone policy in order to reduce child poverty rates. Children deserve protection from poverty regardless of the source of their parents' or caregivers' income.
In 2002 CPAG laid a complaint with the Human Rights Commission about this discrimination. The complaint went through a number of stages (outlined below) on its way to a hearing in the Human Rights Review Tribunal. CPAG is represented by lawyers from the Office of Human Rights Proceedings.
Three legal decisions, on preliminary issues pursued by the Crown in 2005-06, confirmed CPAG's right to bring the case. They also affirmed the right of similar groups to challenge discrimination in government policy. CPAG's main issue, of discrimination, is now being heard. Watch this space!
Click here for CPAG's initial complaint to the Human Rights Commission about the Child Tax Credit, on 10 October 2002. The complaint alleges discrimination on the basis of parental income source.
Click here for Crown Law's response to the complaint, dated 29 July 2003.
Contact the CPAG Administrator for more information about why mediation did not proceed.
CPAG responded to this impasse by urging that the case proceed to the Human Rights Review Tribunal. Read our response.
From there, the Office of Human Rights Proceedings (OHRP), accepted CPAG's application for legal representation to the Human Rights Review Tribunal. The Office covers all of CPAG's legal costs for the case. Once the In-Work Payment was scheduled to replace the Child Tax Credit (April 1st, 2006), the IWP (now IWTC) was included in CPAG's case as well.
This is the Crown's reply to the OHRP's case on CPAG's behalf, from March 2005. You can also read the Statement of Claim asserting the legality of our case, written May 2005 by OHRP.
A preliminary hearing was held by the Human Rights Review Tribunal at the end of June 2005. The Crown challenged CPAG's right, as a non-affected party, to bring a case to the Tribunal. It also argued that the In-Work Payment (now IWTC), which was enacted but not in force, was not "ripe" for legal challenge. Read the interlocutory submissions which OHRP made on CPAG's behalf at those hearings.
In its decision dated 15 September 2005, the Tribunal found in CPAG's favour on both issues. The decision is an important human rights law precedent because it affirms the right of non-government organisations to challenge policy on human rights grounds, without the organisations themselves having to be affected by any discrimination. The relevant part of the Human Rights Act is Section 1A. Read the decision here, and also CPAG's press release and background material on the landmark ruling. Read press coverage of the decision here too.
The Crown appealed the Tribunal's decision on 14 October 2005, and an appeal was heard at the High Court in Wellington on 2 May, 2006. Read the Crown's appeal submissions (filed 23 December 2005) and CPAG's submissions (27 Feb 2006).
The High Court judge who heard this appeal, in a reserved decision dated 17th May 2006, dismissed Crown Law's appeal. The judge decided the case did not lie within his jurisdiction. This meant the Tribunal's decision in CPAG's favour was allowed to stand, for the time being.You can read OHRP's additional submissions regarding the jurisdictional issues here.
Both of the first two legal decisions indicated that CPAG's discrimination case ought to be heard. In spite of this, the Crown decided to further dispute CPAG's right to bring it, by pursuing judicial review of the jurisdictional issues.
Faced with potentially significant delays while the judicial review and its appeal process took their course, CPAG chose to act not only in its own right as a concerned and responsible public interest group, but also officially on behalf of people directly suffering from discrimination. A class action was brought with the participation of affected people. CPAG's Statement of Claim to the Human Rights Review Tribunal (HRRT) was amended accordingly.
Meanwhile, the judicial review hearing in October 2006 resulted in a judgement in CPAG's favour delivered on 6 November 2006. This decision was not appealed by the Crown and thus cleared the way for CPAG's discrimination case to be heard by the HRRT.
The case is thus being brought directly by CPAG in its own capacity as a public interest group, not indirectly on behalf of specific affected persons. To formalise this, in 2007 OHRP filed a second amended Statement of Claim in the Tribunal. A Statement of Reply to CPAG's second amended statement of claim was filed by the Crown, together with an Appendix.
Abruptly, in March 2007 the In-Work Payment was renamed the In-Work Tax Credit. This was done as part of a raft of name changes in family payments and added a further level of complexity to the already devilishly complex case.
Mid-year 2007, scores of documents were made available to both sides, as part of the document discovery process. Once those were analysed, initial legal briefing papers were drafted.
The case was heard at the Human Rights Review Tribunal in Wellington, from June 3 - July 21 2008.
CPAG presented its case first, including submissions by expert witnesses from various fields including child health, economics and social services. The Crown then presented its case, with senior managers from government departments defending the IWTC policy. If there is any discrimination, which they deny, they argued it is justified.
All evidence given was transcribed for the public record. The Tribunal is now considering its decision, as to whether the In-Work Tax Credit is inconsistent with the Human Rights Act, as CPAG alleges. The decision will likely take some weeks or months, given the large volume of material presented for its consideration.
The case took six years to come to a substantive hearing and there have been several full-time lawyers working on it from both sides of CPAG vs Attorney-General. CPAG continues to present cost-effective ways for government to remove the discrimination and avoid the need for the case at all.