Getting jobless in work 'sinister'

01:01, Jul 28 2013

Thousands of beneficiaries will be managed into work by private employment agencies in a new nationwide pilot programme some are labelling "sinister".

The Ministry of Social Development has been seeking tenders from community and private employment agencies to put beneficiaries into paid work.

Annually, 2000 beneficiaries will be involved nationwide and the agencies will earn up to $12,000 for placing a client into a job.

They will earn more for placing higher classified patients, such as those with "entrenched mental health issues" and those with serious barriers preventing them returning to work.

Overseas, similar welfare-to-work programmes have been criticised as ineffective and costly. Some groups are worried the same thing could happen here, and that there'll be too much focus on "bonus payments".

But Social Development Minister Paula Bennett said the Government was willing to pay more to help those who are likely to find it harder to get into work and be independent.


"Under the old system many people were simply written off to a lifetime of welfare without talking to them about what they can do and what they want to do.

"Many with low level mental health issues like anxiety, stress and depression want to work, but may need support, particularly after taking on a job.

"This Government is willing to fund that extra support."

However, Labour spokeswoman for social development Jacinda Ardern believed the pilots put the emphasis on bonus payments, rather than on on the "wellness" of clients.

"Winz already focuses on getting people back into work. This won't differ from that other than that it will come at great expense to taxpayers and providers will be incentivised through bonus payments.

"Shouldn't we instead be focusing on the barriers these people have at getting into employment, such as their mental health issues or the barriers sole parents face, rather than giving bonus payments to employment agencies?"

Mental Health Foundation chief executive Judi Clements said most people with mental health issues wanted to work, but welfare groups across the country had serious concerns about the pilot programme.

Taranaki benefit advocate Alex Ballantyne said the pilots looked "extremely sinister".

"They are basically going to pay people to get the numbers off the books without considering the needs of each individual. This is going to cause a lot of pain to people and leave volunteers to mop up the mess."

Auckland Action Against Poverty spokesman Michael Brenndorfer said mental health providers were highly concerned about the pilot.

"It's a troubling idea. These programmes reward people with money for making employment, rather than the health and needs of the person.

"This could be very bad for people with mental health issues."

He worried that the programmes could mirror United Kingdom work programmes which have failed to meet targets.

The Guardian reported earlier this month that out of 115,000 UK jobseekers referred to one provider in the first year of the scheme, only 4000 - or 3.5 per cent - found sustained jobs.

Bennett said the Government was "not following models from overseas", but Ardern disagreed.

"From the beginning the minister has said that she wanted to mirror changes in the UK which have essentially seen a privatisation of the welfare system with disastrous consequences."

The MSD is "confirming contracts" with successful agencies. Pilot programmes will start in the middle of next month and run until June 2016.


Clients "limited in their capacity to look for work" because of mental health issues or parental duties will be referred to the service by Work and Income.

The employment agencies will provide "wrap around case management" of the client, including employment placement, employment support and ongoing support for 12 months.

The employment agencies will be paid according to the "categorisation" of the beneficiary, how many hours they are doing per week and will also earn more the longer the beneficiary stays in the job.

For example, placing a "medium" category mental health beneficiary into a 5 to 20-hour a week job could earn the recruiter up to $2250, while placing a "very high" category mental health beneficiary – with "entrenched mental health issues" – into a 30-hour a week job could earn the recruiter up to $12,000.

The goal for the pilot is to place half of all people in jobs, with 80 per cent of those still in employment at 12 months.

Beneficiaries will be "exited from the service" if they do not find employment within six months.

Sunday Star Times