Budget: Govt reveals social welfare plans

Social Development minister Paula Bennett and Prime Minister John Key announced details of the social welfare section of the Budget today. File photo / Christine Cornege

The Government has announced the Budget will include $287.5 million for the first stage of the welfare reforms aimed at getting solo parents back to work earlier - but more than $200 million of that will come from other areas within Social Development.

Social Development minister Paula Bennett and Prime Minister John Key announced the package today - the extra funding is for the next four years to cover changes which will require solo parents to return to work when their youngest child is five and bring in tighter rules for unemployed youth, including a requirement for them to be in training and payment cards which can only be used for living costs.

The funding package includes $80 million for early childhood education and childcare assistance payments, $55.1 million for 155 Work and Income staff who will be dedicated to support people back into work, and $148.8 million for youth services.

Ms Bennett said the $287.5 million included $81.5 million of additional funding, but the remainder would come from "reprioritised'' funding from within Social Development.

Ms Bennett said the extra funding was vital to the reforms by providing support for childcare and staff to work with those expected to return to work.

"The Government's welfare changes require significant up-front financial support. We've made a commitment to provide that investment to ensure fewer people are on welfare long term."

Legislation to make the changes for the first stage is currently before Parliament. The changes for solo parents will come into effect in October and for youth in July.

Under the changes, solo parents will be expected to look for part time work when their youngest child is 5 and full-time work when their youngest is 14. Those who have another child while on the benefit will have to look for work when that baby is one year old.

Young people and teen parents will have essential costs such as rent and power paid directly and get a payment card for living costs. There will also be childcare payments to allow teen parents to study or train.

The second raft of changes - which will merge benefit types into three main categories, including the 'Job Seeker Support' category for unemployed, single parents and sickness and invalids - will be funded in next year's Budget.

The total extra cost of the reforms will be $520 million over four years - more than half of the $1 billion the reforms are expected to save.