Have you ever got a loan to pay off some bills? Did you declare that loan as income?

via Stuff

This is just ass-backwards.

The Ministry of Social Development is prosecuting a woman who was on the benefit, saying the loans she took out to make ends meet count as income.

The ministry said she failed to declare the loans as income and should pay $120,000 back to the government.

I get the feeling we don’t have the full story, once again, but on the face of it, the government going after loans because they are income seems dodgy.  

Justice Davidson questioned the Crown [Mr Fong] over how a loan from a parent could be considered a resource to the beneficiary.

“They can’t insist upon it, they can’t enforce it, the family member may not be required in any way to provide them assistance … so why should that be regarded as a resource of the beneficiary?”

Mr Fong replied that a loan only becomes income once it is used for income-related purposes, such as paying bills, expenses or rent.

He argued that a person who has money at their disposal to meet recurring living needs cannot be considered in need of a benefit.

What a twisted way of logic.  Does that mean that earnings I don’t spend doesn’t “become” income until I spend it on income-related purposes, such as paying bills, expenses and rent?

That would be great news.  I will dedicate a fair amount of my earnings and buy gold, shares and other equity because clearly there is no income-related purposes to those investments.

The problem is that you can’t rely on the court to apply common sense.  As we see time and time again, if you ask a court three times, you can get three different answers.  None of which need to make any sense by the way.

Clearly, a loan isn’t income.

What you spend the money on does not turn the loan into income, or income into a loan, or income into an equity investment.  We all “know” that.

Justice Nick Davidson was recently made a judge, having acted for the Pike River aggrieved.  So that’s not specifically confidence enhancing either.



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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

To read Cam’s previous articles click on his name in blue.