Employers lag in repaying youth incentives

Last updated 05:00 10/12/2012

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Almost $1 million is yet to be paid back by employers who were provided incentives under a now-defunct Work and Income scheme to hire beneficiaries.

The Job Ops With Training programme, which was discontinued in July, gave employers a $5000 wage subsidy for taking on staff under the age of 25, with $3000 paid at the start of a six-month placement and a further $2000 at the end.

But if an employee did not complete the full six months, a portion of that amount was supposed to be paid back to Work and Income.

Questions about the scheme were raised last month when it was revealed that Mick Willbourne, owner of several car washes across the country, had been blacklisted by the department after taking $40,000 in subsidies, and then paying the workers less than the minimum wage.

Mr Willbourne, who is also being investigated by the Business, Innovation and Employment Ministry, is still being pursued for part of the money.

Information sought by the Labour Party's labour spokeswoman, Darien Fenton, show that there are 468 employers with outstanding debts arising from the termination of the scheme. A total of $879,915 had yet to be recovered, with the majority owed by Auckland employers, followed by those in Canterbury and Wellington.

Although many employers owe a much smaller amount than Mr Will bourne, Ms Fenton had been unable to find out how many had been similarly blacklisted.

She supported getting young people into work but said that, in a tight economy, it was important to be rigid in making sure every dollar was accounted for. "The Government needs to lift its game, that's nearly a million outstanding and a million that can't be put into other schemes to encourage New Zealanders into work."

Work and Income deputy chief executive Debbie Power said a range of options was available to pursue the debt, ranging from approaching employers directly to legal action, which could only be undertaken with proof of intent to defraud.

Most employers operated with the best of intentions and there was some risk in taking on younger work ers. "There are many reasons why an employer-employee relationship might not work out.

"The young person may walk away from the job; the work might end up not being suitable for the person's skill set; or the appointment might have a negative impact on the employer's business. In rare circumstances it is because an employer is irresponsible."

Social Development Minister Paula Bennett said there were robust collection processes in place and the debts would be recovered pro actively.

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"Job Ops gave around 12,000 young people a foot in the door with employers and vital on-the-job experience which they may not have received without these subsidies."


Auckland – 134 ($301,696)

Bay of Plenty – 39 ($63,347)

Canterbury – 62 ($113,276)

Central – 22 ($33,061)

East Coast – 27 ($58,461)

Nelson – 13 ($16,646)

Northland – 22 ($43,650)

Southern – 38 ($62,365)

Taranaki – 20 ($44,835)

Waikato – 47 (65,264)

Wellington – 44 ($77,314)

TOTAL – 468 ($879,915)

- The Dominion Post

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