Social Development and Employment Minister Louisa Upston says the coalition government is taking early action to restrain the rise of welfare dependency.
“I believe the previous minister [Carmel Sepuloni} 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 fulfill work obligations,” the minister told media at a joint press conference with Prime Minister Christopher Luxon today.
Upston said that, from June, the Ministry of Social Development would begin work check-ins for beneficiaries on jobseeker support to find employment and to ensure they were receiving the right help.
“We will introduce a traffic light system that makes it clear to those on Jobseeker Support what their obligations are to prepare for or find work, and what the consequences will be if they refuse.”
But she said numbers released today painted a grim picture of the previous government’s economic mismanagement.
“The fact there is now 66,759 more people receiving Jobseeker support than in December 2017 speaks to the culture of benefit dependency that is Labour’s legacy.
Up 20,000 last year
“Despite widespread workforce shortages, the previous government’s polices saw it leave office with 189,798 people reliant on Jobseeker Support – up 19,695 in just the past year.
“Labour was either unable, or unwilling, to get people off welfare and into work. As a result, we’re already close to MSD’s forecast of Jobseeker Support numbers hitting 198,500 in January 2025.”
Upston said that the Welfare that Works policy would fix this by using community providers to give young job seekers a job coach, a plan to address their barriers to employment, and a proper needs assessment to help them find suitable work.
She said that in 2017 sanctions were applied to 60,588 beneficiaries who did not comply with their responsibility to prepare themselves for the workforce.
But the sanctions plunged to 25,329 last year. Over that period data showed that New Zealanders on jobseeker support rose to 70,000 and the numbers of people who had been receiving this support for a year or more rose to 40,000.
Upston said she had sent a formal letter to Ministry of Social Development chief executive Debbie Power emphasising the push for beneficiary obligations to be met.
Reapplying every six months
“Our priorities are for a much stronger focus on the obligations of jobseekers to actively look for work and to take all practical steps to prepare themselves for work. If they fail to take work that is available, to attend interviews or to complete their pre-employment tasks, there need to be consequences. This could encourage people to then meet work obligations and gain the benefits from being in employment.”
Luxon said having people remain on benefits had become an irrational choice and action would be taken for those who failed to comply with work obligations.
Jobseeker support will now have a rule making beneficiaries reapply for their benefits every six months.
“There are different obligations for health and disability. This policy is not about support and living, this policy is about job seekers and those who are work-ready,” Upston said.
“Of concern in the labour market statistics released by Stats NZ today was the number of youth not in employment, education, or training (NEET), which rose by 3,000 people over the December quarter. The rate for young women also increased to 14 percent, up from 12.5 per cent. Young people are disproportionately impacted by tightening economic conditions.
“It is also worrying that 40,000 people under the age of 25 are currently on a Jobseeker benefit, an increase of 66 per cent compared to six years ago,”Upston said.