Government’s political opponents slam new social welfare sanctions

The Government says there will be “no more excuses” for beneficiaries not knowing what their responsibilities are, vowing to take a “harder line” with sanctions under a new traffic-light system.

But the Labour Party, the Greens and Auckland Action Against Poverty have slammed the announcement, saying it will do more harm than good. Labour called the move benefit-bashing, the Greens said these were “cruel policies” hurting people in poverty who needed support, while Auckland Action Against Poverty says the sanctions won’t work, and will only add more stress to people already in very stressful situations.

“There are responsibilities that come with receiving a benefit, and there will be no more excuses for job seekers not knowing what those responsibilities are,” Social Development and Employment Minister Louise Upston said.

“Our welfare system will always be a safety net that catches people if they fall. But in the past few years, it has become a dragnet that has captured too many people who can work and allowed them to languish on Jobseeker Support for too long.”

All beneficiaries with work and social obligations will be categorised as either green, yellow or red, based on their compliance. Certain beneficiaries on red will face new sanctions, including a money management card, where half of a person’s benefit goes on to a payment card that can only be used to purchase certain essentials.

A new “community work experience sanction” will require the person to find and complete appropriate work experience within an organisation for a specified amount of time and number of hours per week before the sanction is lifted.

These non-financial sanctions will be an option for only some beneficiaries, such as those with children or people under case management, and only for their first missed obligation. Everyone else will continue to receive financial sanctions.

Other changes include doubling the length of time an obligation breach stays on a person’s record from 12 months to two years and requiring Jobseeker Support recipients to reapply every six months.

“A harder line will be taken against those who repeatedly fail their obligations by counting past failures for twice as long, making it more likely their benefits will be cancelled if they continue this behaviour for longer than 12 months.”

The traffic light system is effective now, but the money management and community work experience sanctions and the two-year recording period for missed obligations will be effective in the social welfare system in 2025.

“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,” Upston said.

But Brooke Pao Stanley, who runs Auckland Action Against Poverty, says the moves won’t help people get into work and will instead cause further stress to vulnerable people already living in stressful situations.

“It’s not going to work, we already know that sanctions don’t work. It’s going to do more harm than it is good in our communities. A lot of us aren’t aware that communities that exist in poverty are already at their threshold – and putting more stress on communities, people, families, that are already stressed is going exacerbate the existing harm there because of poverty.

“The Government has all the levers to address these things in meaningful ways and they choose not to,” she said.

Labour leader Chris Hipkins said the harsher sanctions were “kicking people when they’re down” and benefit-bashing.

Labour leader Chris Hipkins. Photo / Mark Mitchell

“There are around 18,000 fewer jobs now than when the National Party became the lead party in Government. If you take building and construction, for example, in that sector alone there are 6000 fewer jobs than there were when National became the Government.

“They should be focused on getting people back into work rather than kicking people when they’re down.”

Green Party social development and employment spokesman Ricardo Menendez March said the Government was inflicting “pain and misery” on people in poverty with “cruel policies”. The people these sanctions affected deserved to live in dignity with access to the support they needed, he said.

“Compulsory money management only serves to take further agency away from people who simply do not have enough to properly make ends meet and regularly have to get into debt to cover the essentials.

“The Government has shown little ambition or interest in really addressing poverty and has instead made life harder for many of our communities. Cuts to benefit increases, job losses and an increase in sanctions have left people without the resources to put food on the table and pay their bills.”

The Act party welcomed the new money management sanction, which was part of the National-Act coalition agreement, but said the penalty could go further.

“Act would like to see full cash benefits be time-limited. If someone who can work fails to enter work after a period of months, electronic money management could be used as a sanction.”

Julia Gabel is a Wellington-based political reporter. She joined the Herald in 2020 and has most recently focused on data journalism.