Praneeta Mahajan
Hamilton, February 22, 2024
This week saw Prime Minister Christopher Luxon and Social Development and Employment Minister Louise Upston signal a wider “reset” of the welfare system with a stricter application of sanctions.
“The Coalition Government is taking early action to curb the surge in welfare dependency that occurred under the previous government by setting out its expectations around employment and the use of benefit sanctions,” Ms Upston said in a statement to the media.
“I have not met a single young Kiwi whose ambition, creativity, and spark would be best served by a life on a benefit, and our Government is focused on providing those who can work with the opportunity to do so, for a better life. And that is exactly what these changes will do,” she said in her social media post.
What the numbers say
In 2017, 60,588 sanctions were applied to beneficiaries who did not comply with their obligations to prepare and look for work. That nosedived to 25,329 in 2023. Over that time, people on Jobseeker benefits increased by about 70,000 and about 40,000 more people have been receiving this support for a year or more.
“I believe the previous minister set the tone for a lighter touch to benefit sanctions by saying they needed to be used ‘sparingly’ and as a ‘last resort’, dampening their effectiveness as an incentive to fulfil work obligations,” said Ms Upston.
Of the roughly 189,000 people currently on Jobseeker benefits, MSD only has strong visibility over the 60,000 or so who are receiving case management, including whether they are regularly applying for jobs.
From June 2024, MSD will proactively book the target cohort into work check-ins after 26 weeks, focusing on those who are work-ready but do not have a dedicated Work and Income case manager.
The work check-ins will cost $1.2 million each year and will be funded within MSD baselines. This is expected to see an additional 2,500 job seekers a month reporting on their progress.
These check-ins will focus on making sure job seekers are taking sufficient steps to find work in line with their obligations and provide them with greater support, if needed, to help them into employment.
Work Testable activity
Jobseeker Support recipients will be required to attend as a work-testable activity in line with current legislation. Failure to attend will result in a breach of obligations and ultimately means a sanction could be applied. MSD will ensure attendees are advised of the requirement to attend these check-ins and the consequences of non-attendance.
“I have written to the chief executive of MSD to make this Government’s view clear that we want to see all obligations and sanctions applied. If job seekers fail to attend job interviews, to complete their pre-employment tasks, or to take available work, then there needs to be consequences,” said Ms Upston.
Ms Upston emphasised that “I am not prepared to accept the welfare system we inherited, where work-ready job seekers are forecast to spend an average of 13 years on a benefit, and teenagers could become trapped on welfare for 24 years of their working lives.”
From June 2024, MSD will begin work check-ins for job seekers who have been on benefits for six months, particularly young people. These check-ins will make sure job seeker beneficiaries are taking appropriate steps to find employment and are receiving the right help.
These actions are a precursor to the Coalition Government’s wider reset of the welfare system, which will include mandatory reapplication for Jobseeker Support every six months, community-provided job coaching, proper needs assessments, a traffic light system that makes obligations clear, new non-financial sanctions, and action being taken for those who repeatedly fail to comply with their work obligations.
Praneeta Mahajan is an Indian Newslink reporter based in Hamilton.
