Welfare reform legislation to be introduced

Social Development Minister Paula Bennett today announced that stage one of the National-led Government’s comprehensive welfare reforms will get underway next month.

Delivering better public services is one of the Government’s four key priorities for its second term and welfare reform is central to that.

The welfare reform programme will put a clear emphasis on work availability, addressing the fact that 13 percent of the country’s working-age population are currently on a benefit, with 220,000 children in benefit-dependent homes.

“Despite the good intentions of the welfare system, it’s now creating a cycle of dependence and is actually out of step with today’s needs,” says Ms Bennett.

“Planned reforms to fundamentally change the welfare system are complex and substantial so legislation will be introduced in two stages.”

The first stage of legislation will be introduced to the House next month. It will require some beneficiaries with children to be work available, as well as those on Widow’s and Women Alone benefits. It will also target support for youth who are on a collision course with long-term welfare dependency.

Stage one changes affecting DPB, Widow’s Benefit and Women Alone:

• Ensuring sole parents with children five and older are available for and supported into part-time work.
• Ensuring sole parents with children 14 and older are available for and supported into full-time work.
• Extending these work expectations to women receiving the Widow’s and Women Alone benefits and to partners of beneficiaries with children.
• Enabling Work and Income to direct people to prepare for work early.
• Requiring sole parents who have another child while on a benefit to be available for work after one year, in line with parental leave.

Stage one changes affecting young people and teen parents include:

• A managed system of payments with essential costs like rent and power paid directly, with an allowance and a payment card for living costs.
• Youth Service Providers incentivised to help young people into work, education or training. Young people encouraged to undertake budgeting and parenting courses.
• Guaranteed Childcare Assistance Payment, so childcare costs do not stop young parents from studying.
• Sharing information between ministries to target school leavers most at risk of coming onto a benefit from age 18.

“Instead of just handing benefits over and leaving people to their own devices, the National-led Government is taking an active approach because we have greater aspirations for New Zealanders and their children, achieved through work, not welfare.”

“In addition, aspects of the existing welfare system are out of step with modern life.

Almost a third of sole mothers work full-time, few women rely on men to support them and many parents return to work one year after having a child or earlier.

“We should be supporting beneficiaries to move off benefits where possible, so they can have a better quality of life and more choices,” says Ms Bennett.

The first Bill in the National-led Government’s comprehensive programme of welfare reform will be introduced in March, with the youth changes beginning to take effect from the end of July. The other initiatives around work obligations will come into effect in October.

A second Bill containing an overhaul of benefit categories and a clamp down on fraud will be introduced in July. This will form the second part of the National-led Government’s welfare reform programme and will take effect from July 2013.