Praneeta Mahajan
Hamilton, August 13, 2024
A sweeping overhaul of the benefit system was unveiled yesterday, on August 12, 2024 by the Social Development and Employment Minister, Louise Upston. The reform package, aimed at reducing reliance on Jobseeker Support, introduces stricter obligations for beneficiaries and tougher consequences for those who fail to meet their responsibilities.
Central to these changes is the introduction of a Traffic Light System, which will come into effect immediately, designed to clearly outline the expectations for those receiving benefits.
Ms Upston emphasised the importance of clarity and accountability, stating, “There are responsibilities that come with receiving a benefit, and there will be no more excuses for job seekers not knowing what are those responsibilities.”
Stricter consequences
The Government is set to introduce a series of measures starting next year to increase the obligations for job seekers. Among the most significant changes is the extension of the period over which an obligation failure counts against a beneficiary, from 12 months to two years. Additionally, Jobseeker Support recipients will now be required to reapply every six months, ensuring regular assessments of their eligibility and job-seeking efforts.
In line with a commitment made by the National-ACT coalition, a new money management sanction will see half of a person’s benefit allocated to a payment card, restricted to essential products and services.
Another key measure is the introduction of a community work experience sanction, aimed at helping beneficiaries build the skills and confidence needed to secure employment.
“These changes come with increased support in the form of a new phone-based case management service for 4,000 job seekers aged 18 to 24, and 2,100 extra places for young people to get community job coaching,” Ms Upston announced.
Reducing dependency
The Government has made it clear that while the welfare system will remain a safety net for those in need, it will no longer be a long-term solution for those capable of working. The number of people on Jobseeker Support increased by 70,000 under the previous government, with almost two-thirds receiving the benefit for over a year.
Ms Upston highlighted the rise in sanctions since the current Government took office, with about 3,700 sanctions issued in the June quarter alone.
“Our Government will not tolerate people who accept the Jobseeker Support benefit but refuse to uphold their obligation to seek a job – it is not fair on hardworking Kiwis who pay their taxes that go towards those benefit payments,” Ms Upston stated.
The reforms are part of the Government’s broader “Welfare that Works” approach, which aims to support job seekers while holding them accountable for their obligations.
The goal is to reduce the number of people on Jobseeker Support by 50,000 by 2030, a move forecasted to save the country $2.3 billion in welfare payments. Legislation to implement these changes is expected to be introduced by November 2024, with the first measures taking effect early next year.
Praneeta Mahajan is an Indian Newslink reporter based in Hamilton.
