Benefit overhaul rolled out to mixed reception

23:40, Jul 14 2013
Bill English
BILL ENGLISH: "It's about paying a bit more at the start to save on long term costs, but more important than that, to actually help some people whose lives are pretty miserable".

New Zealand needs to get out of the "childish mentality" that wide-ranging benefit reforms which come into force today are punitive, Finance Minister Bill English says.

While the changes did create more obligations for people on benefits, particularly those with children and those who could work, they also provided more chances for people to get back to work and participate in society.

From today there are fewer benefit categories, as well as compulsory drug testing for jobseekers when required by employees, sanctions for fugitive beneficiaries and stricter healthcare obligations for parents of young children.

A new way of dealing with hardcore beneficiaries will also be introduced, with the Government trumpeting the success of a pilot trialled in 24 Work and Income offices since October.

Work and Income says the results are "some of the best from any case management trial" in recent years, with 6000 of the 10,000 people in the pilot no longer on a benefit.

More than half of those people found work, the rest opted out or cancelled benefits for reasons such as no longer meeting eligibility requirements.

From today, 91,000 people will be enrolled.

Federation of Family Budgeting Services boss Raewyn Fox said dealing with one case manager meant more clarity and fewer things falling "through the cracks", though people were nervous about the changes.

"Some people are worried about being subjected to more tests and [that] it's a way of getting out of paying them."

Labour social welfare spokeswoman Jacinda Ardern said she was hearing of solo mothers being forced to give up study for menial jobs allocated by Work and Income, such as washing dishes, meaning they could not improve their circumstances.

English told RadioLive the changes were something many people did not expect from a National Government.

"We're putting hundreds of millions (of dollars) into essentially personal interaction, in a lot of cases one-on-one between the government welfare system people in Winz and the beneficiaries, because for a lot of people, with a bit of support, a bit of encouragement, and some more targeted assistance they could get back into work," he said.

"At the moment what we do is we just put money in the bank and let them sink or swim. That's particularly the case with a group, say, like young solo mums who, up until recently, were left pretty much on their own, often children with their own children.

"Now we've got a process where each one of them has a supervised adult. We're spending $7000 per head per year on getting those young women back onto a track towards independence."

The average length of stay for those who went onto a benefit under the age of 20, was 20 years.

"If we can shorten that we improve their lives dramatically, particularly the prospects for their children, and we'll save some money," English said.

"It's about paying a bit more at the start to save on long term costs, but more important than that, to actually help some people whose lives are pretty miserable. They're on low incomes with difficulties that could be overcome if they had a bit of support."

People could not be made to work if none was available. They could choose to shift to find work although they could not be made to do so, or they might train so they were qualified when work became available.

The Government wanted to ensure beneficiaries had work obligations appropriate to their circumstances, and they received help finding that work, also that their children were enrolled at a GP and having medical checks, English said.

"You can see that as tightening up, being punitive, and I think we've got to get out of that childish mentality. This is about adults who want better lives, we want them to have better lives, and we should do a bit more about it."

The Government estimates 28,000 to 44,000 people will come off benefits by 2017 because of the reforms, saving up to $1.6 billion.

The number of benefits has been cut from seven main ones to three: Jobseeker Support for those seeking and available for work, Sole Parent Support for sole parents with children under 14, and Supported Living Payment for people significantly restricted by sickness, injury or disability.


Beneficiaries must tell Work and Income if they plan to enrol children with a GP, a preschool from age 3, or a school from age 5. They must also ensure health checks are up to date and notify Work and Income if they plan to leave the country.

They must undergo a drug test when required if they are on the Jobseeker benefit and turn themselves in if they have a warrant out for their arrest.


The Dominion Post