Move to single benefit announced

Steve Maharey

Beneficiaries will get a single benefit rate plus add-ons to pay for accommodation, childcare or costs associated with a disability from 2007, the Government announced today.

Social Development Minister Steve Maharey said there would be a single core benefit with one set of rates and one set of eligibility criteria.

This would replace the current "raft of benefits, rules and entitlements".

The change to a single benefit would dramatically reduce the time spent on administration, allowing case managers to focus more on moving people from welfare dependency into work, Mr Maharey said.

From May, the single benefit would be piloted in 11 centres around the country.

Mr Maharey promised no one would be worse off as a result of the changes.

The focus was on better services to help get more people into work.

"People who are unable to work because of serious health problems or disabilities will continue to be exempt from any work expectations," he said.

Mr Maharey said there would be "add-ons" to support people with higher costs because of things like accommodation, childcare or disability.

An "enhanced" employment service would aim for the rapid return of people who were ready and able to return to work, and preparation for people who needed a more gradual transition into full-time work.

Legislation for the single benefit would be introduced this year.

Mr Maharey told National Radio a cabinet paper to be released today would show that the Government expected to save between $40 million and $70 million a year from moving seven of 10 welfare benefits into the single benefit.

However, he said the move was not a cost saving exercise and in areas such as disability, the shift to a single benefit would probably cost the Government more as the person would keep their package of support when entering the workplace.

"We're doing it because we want a simpler, more effective benefit system that's geared to people going to work."

The financial savings were expected because of a shift from people off welfare and into work, he said.

"We're spending our money differently rather than looking for large gains in savings at this time. However, if it's more effective we would hope to see a lot less people on benefits," Mr Maharey said.

National Party welfare spokeswoman Judith Collins told National Radio her party wanted "intensive care" for people who could move into employment but needed help getting there.

But the Government's plan sounded like a more complicated system, she believed.

"It was first announced in 2000 to come in in 2002. It's now 2005 being announced for 2007. I think that's a pretty clear indication that what we're talking about is quite an expensive business rather than a cheaper business," she said.

The plan was also a way to "hide" the huge increase in the number of sickness and invalids' beneficiaries under the Labour Government -- up 40 per cent in the past five years, now 119,000.

But Mr Maharey said the fact a person had come on to welfare as, for instance, a sole parent or unemployed would still be recorded.

- NZPA