Welfare reforms: How beneficiaries are affected

Social Development Minister Paula Bennett. Photo / APN

A bill designed to reduce the number of young people on welfare benefits and toughen up work tests for sole parents passed its first reading in Parliament last night amid criticism from Opposition parties.

It also establishes a new work test obligation for women on the widows benefit or on the woman alone benefit.

Other laws will be changed to allow Government departments to track young people at risk of becoming dependent on welfare, said Social Development Minister Paula Bennett.
"We'll pick them up before they even hit the welfare system and assign providers to help them get back on track, engaged with learning or working.

"We want to make welfare a less attractive proposition for young people," she said about the bill, the Social Security (Youth and Work Focus) Amendment Bill.

Labour deputy leader Grant Robertson said the "culture of blame" underlined the Government's approach to welfare.

"I'll tell you what would make welfare less attractive - jobs."

The bill requires benefit payments for teenagers, whether on the domestic purposes benefit (renamed the Youth Parent Payment for teens) or the independent youth benefit (renamed the Youth Payment for 16 and 17 year olds), be paid to an approved Youth Service Provider - an agency that will pay their rent and utilities and help the young person to budget.

What's left over will go on a payment card to be used at supermarkets and grocery stores.

Paula Bennett said that in return, the young people would have a clear obligation to be in education, training or work-based learning and if they weren't their cash allowance could be cut.

Someone on the Youth Payment would be able to earn up to $20 a week extra by completing a budgeting programme and staying in education or training for at least six months.

Someone on the Young Parent Payment could earn an extra $30 a week.

It made sense to provide incentives to reward positive behaviour, Paula Bennett said.
"But failure to meet these obligations means those incentives could be removed as well as their cash allowance."

Paula Bennett said more than half of those who go on a benefit at age 16 or 17 would spend at least five of the next 10 years on a benefit.

More than a third of those on the domestic purposes benefit had become parents as teenagers and almost half of those on the DPB had no formal school qualifications. .
"The lifetime cost of paying these young people a benefit is higher than for any other group. The social cost can be devastating."

HOW BENEFICIARIES ARE AFFECTED

* Benefits no longer paid directly to parents aged 18 and below or to those on independent youth allowance.

* Approved agencies to help with budgeting, and access to training and education.

* Same support payment to 16, 17 and 18 years parents with spouses, up to 300 people.

* Law changed to enable Government departments to track recipients of youth payments.

HOW SOLE PARENTS, WIDOWS AND WOMEN ALONE ON BENEFITS ARE AFFECTED

* Sole parents must be available for part-time work when their youngest child turns five.

* Sole parents must be available for full-time work when their youngest child turns 14.

* Women who have another child while on the benefit to be available for work after one year.

* Introduces a work test for women receiving the widow's benefit and woman alone benefit.