Key announces benefit crackdown

Last updated 14:31 09/02/2010

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Beneficiaries face tough new measures in legislation set to be passed this year, the Prime Minister said today.

John Key's statement to parliament this afternoon said the criteria and testing for the sickness benefit would be changed - "to ensure it only goes to those people who are genuinely too sick to work".

"The number of people receiving a sickness or invalids benefit in particular has been allowed to grow out of control in recent times," Mr Key said.

"Without fundamental changes, this number is expected to keep growing over the longer term, by perhaps 50 percent over the next 15 years.

"We owe it to our children, the taxpayers of the future, to bring welfare rolls back under control."

The Government would appoint a working group of experts to recommend ways to reduce long-term welfare dependency, Mr Key said.

There would be strict re-application rules for people on the unemployment benefit and an increase in the work and training expectations for people on the Domestic Purposes Benefit. There would also be changes to the benefit abatement regime, to improve incentives for beneficiaries to work.

Mr Key said the Government was concerned about the overall effectiveness of social services.

He said he was still worried about an emerging underclass in New Zealand.

"We are not convinced that our investment in these services is showing the results that taxpayers have a right to expect.

"We continue to hear of families being trapped between bureaucratic government silos, receiving ineffective and patchy services that only entrench the cycle of dependency."

Expectations among Maori leaders are high that the Government will pour millions of dollars in to the new Whanau Ora policy, which would devolve welfare spending to non-Government agencies.

Mr Key said the first stages of the Whanau Ora policy would be announced in the May Budget. The policy would cater to people of all races in need, but would be particularly effective for Maori.

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