Fewer on dole as reform looms

Welfare reform looms as the number of people on the unemployment benefit falls.

The number of unemployment-benefit recipients fell by 4224 in February – the single biggest drop since 2007.

Unemployment benefit numbers fell 6 per cent, compared with a 1 per cent rise in the same month last year. Overall, the number of people on all benefit types dropped by 10,816 – more than half of whom were young people.

The figures relate to those on benefits, not the unemployment rate, which remains at 7.3 per cent.

Social Development Minister Paula Bennett said 5595 young people came off a benefit in the last month, aided by job-start programmes such as Job Ops and Community Max.

More than 3600 positions had been filled through Job Ops by the end of February, with 2927 positions filled through Community Max.

Though part of the unemployment fall was due to a resurgent economy, Work and Income had also strengthened its "work-first" approach, using work brokers and recruitment service Job Connect to match people with jobs, Ms Bennett said.

In the last week of February, 38 per cent of those who visited Work and Income did not leave with a benefit.

Regionally, the biggest drop in unemployment-benefit numbers was in the East Coast (20 per cent), followed by Auckland (16 per cent) and Bay of Plenty (11 per cent).

Ms Bennett said the fall in beneficiary numbers gave her more confidence to proceed with tougher-work test plans and other obligations under the Government welfare-reform package. "We expect to introduce a bill to the House within the next few weeks." she said. "It will be a package of both incentives and obligations for people."

During the last election, National pledged to change the law so that sole parents on a benefit would have to look for work after their youngest child turned six.

More work and training expectations will also be placed on sickness beneficiaries, and those on the unemployment benefit will have to reapply after one year.

The proposals were deferred last year because of the recession.

Ms Bennett said the package would include changes to abatement rates so that beneficiaries could earn more money through part-time work before their benefit was cut.

"You can expect to see abatement-rate changes, and tougher sanctions on people who are not fulfilling their work obligations," she said.

"If there are not jobs there you won't be penalised, but there is an expectation that you will be looking and making real efforts towards getting employment."

Labour leader Phil Goff said Ms Bennett was being dishonest with her interpretation of the unemployment figures.

"If you want to know why the figures have come down in the last couple of weeks, it's because some tens of thousands of people have gone back to polytechnic and university. That's a seasonal fall."

Mr Goff said there were also thousands of young people, or those whose partners were in work, who did not show up in benefit figures because they were not entitled to an unemployment benefit.

Forcing work tests on beneficiaries was useful only when there were jobs for them, Mr Goff said.

- © Fairfax NZ News