Doubling down on benefit sanctions

A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.

Opinion

Faced with the expected response from beneficiary advocates and the Opposition, Prime Minister Christopher Luxon and Social Development Minister Louise Upston are doubling down on their policy of ramping up sanctions to make sure Jobseeker beneficiaries “are taking appropriate steps to find employment and are receiving the right help”.

This is in the face of Ministry of Social Development research from 2018 that said there was scant evidence to show benefit sanctions led more people back into work. Asked by Stuff why they were diverting from the MSD stats, Upston produced a 2010 OECD paper which said sanctions or even the threat of them led to more work exits, ie people leaving welfare for employment.

The pair say the recent welfare statistics showed the previous government’s policies had not worked.

Upston said the strongest empirical evidence was that there were 70,000 more people on the Jobseeker benefit at the same time there had been a 58 percent reduction in the use of sanctions. “That’s evidence enough for me to be deeply worried,” she said.

Luxon said a letter from Upston requesting MSD fully impose benefit sanctions would be just the start of planned changes.

From June, Upston said MSD would begin more thorough “check ins” with Jobseeker beneficiaries. (Of 189,000 people on this benefit, MSD only has “strong visibility” over the 60,000 or so receiving case management.) There would be an extra 2500 check-in meetings each month and those on Jobseeker would also have to re-apply if they had remained on the work-ready benefit for six months. Further policies, including a traffic light system that makes obligations and consequences for not meeting them clear, would follow later in the year.

Green Party welfare spokesperson Ricardo Menéndez March said more sanctions would fuel poverty and the Government was on a cruel path. Labour social development spokesperson Carmel Sepuloni accused the Government of relying on out-of-date advice to inform its decisions, something Luxon and Upston do not accept.

The new sanctions system was something National campaigned on before the election, saying there would be severe consequences if beneficiaries were found to have failed three or more obligations.

Although they are nowhere as severe as the actual benefits cuts made by a former National government in 1991, the new sanctions system is going to make things harder for a number of people. However, it is a policy that is popular with National’s core supporters and one that will not be challenged by its coalition partners Act and NZ First.