Discrimination: CPAG vs the Attorney General (2002 - 2013)

CPAG vs the Attorney General (2002 - 2013)

Beginning with an initial complaint to the Human Rights Commission in 2002 and ending with a Court of Appeal decision in 2013, CPAG upheld a case against the government that argued the government was discriminating against children of beneficiaries by excluding their families from receiving the In-Work Tax Credit.

Background

Many of us like to think of Aotearoa New Zealand as an egalitarian place to raise a family, where everyone is given a ‘fair go’. However, in comparison to many other developed countries, we have a discriminatory welfare and tax system when it comes to children.

For example, in Australia, all low-income children receive the same levels of child-related family assistance no matter whether their parents are in paid work or not. This is not the case in New Zealand.

Many low-income families are left out of part of the Working for Families package, a scheme of income support for children that is designed to reduce child poverty. The In-Work Tax Credit, one of two major tax credits as part of Working for Families, requires that parents be in paid work and off benefit to be eligible for these child-specific payments of at least $72.50 per week.

CPAG has long argued that attempting to tie a work incentive to income support for children constitutes discrimination against children born into benefit-receiving households. This discrimination means that children of beneficiaries do not enjoy the same tax-funded support to eat well, keep healthy, live in a warm dry house, and participate in school activities and sports as other children.

The case is complex, and the Court of Appeal hearing represented the culmination of detailed and technical legal work over many years. CPAG is indebted to Frances Joychild QC, Cathy Rogers, and Jenny Ryan for their legal representation. While funding was received for Cathy Rogers and Jenny Ryan from the Office of Human Rights Proceedings, CPAG and its supporters raised money to pay for the services of Frances Joychild QC. CPAG also gratefully acknowledges her additional pro bono contributions.

Context of the case

In 1996 the Government changed its family assistance policies to deny children of beneficiaries the full family assistance package. CPAG was greatly concerned with the impact of these policies on children and their families. At that time, the discriminatory policy in question was called the ‘Child Tax Credit’.

In 2004 the Government announced a package of social assistance for families called ‘Working for Families’. The Working for Families package went through no public consultation process prior to its introduction – no green paper, no white paper, no select committee, and it was passed into law in one day.

One aspect of the Working for Families package was the In-Work Tax Credit (this replaced the Child Tax Credit). The In-Work Tax Credit was intended to alleviate child poverty and provide a work incentive for people receiving a benefit. People were only eligible for this payment if they were ‘off-benefit’ and were working a certain number of hours per week - 20 hours for a sole parent and 30 hours for a couple with children.

CPAG agreed there should be a gap between work and beneficiary income but strongly disagreed with creating such a work incentive by denying children of beneficiaries a significant amount of financial support – in 2021, this amount is at least $72.50 extra each week.

CPAG made a complaint to the Human Rights Commission when the Child Tax Credit was first introduced but unfortunately, at that time the Government was not subject to the Human Rights Act 1993. However, in 2001, an amendment to the Act came into effect which made the Government, its agencies, and anyone who performs a public function accountable for any unlawful discrimination. So, in 2002, CPAG was able to formally challenge the Government under Part 1A of the Human Rights Act.

The Crown tried to stop the case by challenging CPAG’s right to take the case as it was not directly affected by the Child Tax Credit. When the Tribunal rejected the Crown’s claim, the Crown appealed to the High Court and lost there as well. This decision created an important human rights law precedent because it affirmed the right of non-government organisations to challenge policy on behalf of others, without the organisations themselves having to be personally affected by any discrimination.

CPAG believes there are much better ways to create an income gap which would leave plenty of Government funds for distribution to all parents on low to middle incomes. Crucially, CPAG believes in the right of all children, irrespective of the paid work status of their parents, to access income support that will enable them to flourish.

For more information on the discriminatory nature of the In-Work Tax Credit, read CPAG’s Briefing on reform of the In-Work Tax Credit (PDF) here.

Timeline of case history and legal documents

2002

CPAG makes initial complaint to the Human Rights Commission about the Child Tax Credit. The complaint alleges discrimination on the basis of parental income source.

2003

Crown Law responded to the complaint in July 2003.
CPAG responded to the Crown and urges the case proceed to the Human Rights Review Tribunal. The Office of Human Rights Proceedings, accepted CPAG's application for legal representation to the Human Rights Review Tribunal. The Office covered all CPAG's legal costs for the case.

2005

The Crown replied to the Office of Human Rights Proceedings’ case in March 2005.
CPAG filed a Statement of Claim asserting the legality of the case in May 2005.
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 In-Work Tax Credit), which was enacted but not in force, was not "ripe" for legal challenge. Read the interlocutory submissions here.
In its decision dated 15 September 2005, the Tribunal found in CPAG's favour on both issues. This 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 Crown appealed the Tribunal's decision on 14 October 2005.

2006

The appeal was heard at the High Court in Wellington on 2 May 2006. Read CPAG's submission here.
The High Court dismissed Crown Law's appeal. The judge held the case did not lie within his jurisdiction. This meant the Tribunal's decision in CPAG's favour was allowed to stand.
The Office of Human Rights Proceedings additional submissions regarding jurisdictional issues can be read here.
Notwithstanding two decisions in favour of CPAG's decision to bring the case, the Crown took a 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 in its own right as a concerned and responsible public interest group. A class action was brought with the participation of affected people. CPAG's Statement of Claim was amended accordingly.

Meanwhile, the judicial review hearing in October 2006 resulted in a judgment in CPAG's favour, delivered on 6 November 2006. This decision was not appealed by the Crown, clearing the way for CPAG's discrimination case to be heard by the Human Rights Review Tribunal.
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.

2007

To formalise CPAG bringing the case in its own capacity as a public interest group (not indirectly on behalf of specific affect persons) the Office of Human Rights Proceedings filed a second amended Statement of Claim in the Tribunal in 2007. A Statement of Reply and Appendix was filed by the Crown.

2008

The case was heard at the Human Rights Review Tribunal in Wellington in June/July 2008. Read CPAG’s summary of the legal case up until that point here.
The Tribunal returned its decision, finding "real and substantive", but justifiable, discrimination.
CPAG appealed the decision, arguing that the 2005 legislation (which was in effect) should have been considered rather than the original 2004 Working for Families package, which was never put into effect.
CPAG’s comment on the 2008 judgement can be read here.

2011

The Appeal was heard in the High Court, Wellington, in September 2011. Unfortunately, the appeal was lost.
In November 2011 CPAG filed an application for leave to appeal to the Court of Appeal.

2012

CPAG’s application for leave to appeal was declined by the High Court. Read the decision here.
CPAG filed an application with the Court of Appeal for special leave to appeal the High Court decision. This was granted. Read the decision here.

2013

The Court of Appeal hearing was held on 28 and 29 May 2013.
You can read carious documents from the case, including:

The submission by the Human Rights Commission as intervener.
The Appellents Chronology.
Submissions for the Appellent.
Submissions of the Appellent in Reply to Cross Appeal.

The Court of Appeal Decision was released on 30 August 2013.

The outcome

The Court of Appeal agreed with CPAG when it found there was discrimination against all beneficiaries with children, not just the narrow group Crown Law wanted to limit it to, and that as part of the test for discrimination, this different treatment causes material harm. The value of this decision should not be underestimated. It might be regarded as a major win, clarifying the test in a helpful way for future discrimination cases.

Nevertheless, despite the clear finding of discrimination, the Court of Appeal declared the discrimination was justified because it was aimed at getting beneficiaries into work.

Ultimately, CPAG decided not to appeal further. At the time Susan St John said “There is little to encourage us to think the answer at the Supreme Court would be different to that of the Court of Appeal. We have concluded that the courts are not ready or equipped to give a rational decision on justification, other than on the same grounds of narrow case reasoning without a real understanding either of how so many children are seriously harmed and their rights ignored, or of the economics of in work benefits and their proper design.”

This ended nine years of litigation by CPAG challenging the In-Work Tax Credit.

CPAG commentary

At the end of the litigation, CPAG noted that calling a payment for children a 'work incentive' does not change its nature and the harm of denying adequate income support by this discrimination was not trivial. At the time (2013) roughly 230000 children were affected by this discrimination and the corresponding social gain of shifting beneficiaries off benefits was minimal.

Furthermore, CPAG noted parenting is challenging and expensive unpaid work, even for the well-resourced, so it is hard to imagine a justification for departing from the principle of treating all children equally. This is especially true when by not doing so, child poverty is perpetuated. It is a great pity the Court did not protect children by finding such discrimination unjustified.

Unlike some countries with upper and lower houses, New Zealand has few checks and balances on policy development. It is still CPAG’s opinion that appropriate policy process was not followed when the Working for Families package was introduced and the discriminatory In-Work Tax Credit exemplifies the resultant flawed policy. CPAG used the human rights framework to draw attention to our obligations under the Human Rights Act, the Bill of Rights Act, and various international treaties and conventions.

Read the full transcript of Frances Joychild QC ‘Child Poverty Action Group v Attorney General: what did we gain? (PDF) here

Read CPAG’s Human Rights Case: Wider Implications for a Democratic Society by Michael Timmins (PDF) here