The Government announced on Tuesday legislation to reform the welfare system. Some of these changes are not controversial, such as guaranteeing a childcare assistance payment to teenage parents so they can continue with their studies.
The more controversial area is around work testing of sole parents who receive the domestic purposes benefit. Unlike other benefits introduced in the 1930s by the first Labour government, the DPB was only introduced in 1973 by the third Labour government. Before that, sole mothers went to court to get maintenance orders against the fathers, and most sole parents were in work, with the government supplementing their earnings. It was the 1973 changes which saw the DPB introduced so sole parents could care fulltime for their children.
The number on the DPB rose dramatically over 15 years from 1975 to 1990, when it reached around 100,000. Since then it has fluctuated between 100,000 and 120,000.
In the late 1990s a work test obligation was introduced, with fulltime work testing when the youngest child is 14 and part-time when the youngest child is seven.
The reforms announced this week don't actually change the age for fulltime work testing. The age for part-time work testing changed a few years ago to six, and is now going to move to five - the age at which a child must be in school. So this is not a significant change.
The change that is attracting the most attention is around sole parents already on the DPB who have a further child witthout a partner. I understand this is the case for about one in five on the DPB.
Having a further child while on the DPB will now only suspend their work testing obligations for 12 months (the same period as parental leave from the workplace). Proponents say that if you are already on the DPB, you should not be having further children - that the DPB is there for parents whose partners die or leave them. Opponents say it is unfair on the child to have their mother forced to look for part-time work once they are one.
The Welfare Working Group actually proposed that the suspension of work testing should be for only three months, not 12 months.
For my part I support having just a 12-month suspension of work testing for sole parents who have further children while on the DPB. There is a wealth of research that children who grow up in households where no adults are in paid employment do far worse than other children in other families - even those of the same income level. The DPB should be temporary assistance for parents who find themselves without the support of a partner. Too many recepients remain on it for well over a decade.
But what do you think? Do you think having just a 12-month suspension of work testing is the right policy? Should it be shorter or longer or should there be no work testing at all?
To avoid getting diverted into a debate on jobs, please note that work testing is merely a requirement to be available for work and seeking work. It is not a requirement to find work - just to genuinely try. I will blog at a later date on how having people move from welfare into work actually boosts the total number of jobs in the economy - the job market is not static or fixed.
David Farrar is a centre-right blogger affiliated to the National Party. His disclosure statement is here.
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