Welfare reforms to add pressure to unwilling workers

Social Welfare Minister Paula Bennett. Photo / Supplied

Welfare reforms announced by the Government today are expected to ramp up the pressure on beneficiaries to return to the workforce.

The reforms, announced by Prime Minister John Key and Social Development Minister Paula Bennett, involve more active management of long-term beneficiaries and require them to reapply for benefits every 12 months.

They bring in sanctions such as benefit cuts to those who don't genuinely attempt to find or train for work, and more rigorous assessments of sickness beneficiaries by shortening the period between medical checks.

They also involve tightening the requirement procedures for those who repeatedly receive hardship grants, and extend part-time work obligations to domestic purposes beneficiaries with children over six years old.

As an incentive to work, the abatement threshold will increase from $80 to $100 per week. Part-time thresholds also increase by $20 to $200.

There are currently about 345,000 working age people receiving benefits, and Mr Key said some would never be able to work. "But for most people, a benefit should only provide temporary support until they can return to work.

"In fact there is little chance of a better future for beneficiaries and their children unless they do come off a benefit and work for an income."

One of the reforms involves case managers getting the power to impose sanctions including a 50 per cent benefit reduction for long-term beneficiaries who fail to undertake work test requirements, with 100 per cent suspensions signalled for ongoing non-compliance and eventually cancellation.

Those with children could not have their benefits cut by more than 50 per cent.

Labour leader Phil Goff said the Government should be looking at creating jobs.

"The focus is entirely in the wrong place, 3500 people earlier this year lined up for a 150 low paid jobs because they were desperate to work. Unemployment has trebled in this country not because people don't want to work, but because the jobs aren't there and this Government isn't focused on creating them," Mr Goff said

He was concerned that innocent children might suffer.

"The primary consideration is always children. We can't have children growing up in this country hungry, ill housed, ill looked after because of the sins of their parents."

Maori Party welfare spokesman Te Ururoa Flavell also had concerns about the effects upon children, though the Maori Party believed that those who could work should do so.

"We don't think the children of unemployed people should be penalised and under these new changes there is a suspicion that might happen," Mr Flavell said.

The Maori Party did not believe that sanctions worked, but was willing to vote for the bill at its first reading so it could be considered by a select committee.

Green Party co-leader Metiria Turei said most people used a benefit only for a short time when their lives were in upheaval.

"There are already strict rules about looking for work while on a benefit. Most people are not out of work for want of trying. There simply aren't enough jobs for people to go to," Mrs Turei said.

"Paula Bennett's announcement is incredibly harmful and unhelpful."

Ms Bennett said most New Zealanders wanted to work, and as the economy improved more jobs would become available.

She said $4.8 billion was paid out each year in benefits.

Figures show the Government's package will cost $88 million over four years to enact and support, with conservative savings estimates being $100m over four years and another $200m over 10 years.

Mr Key said the Treasury numbers were conservative, but said the policy changes were as much the signals it sent as it was about making savings.

- NZPA