Key Notes: Special Edition on Welfare Reform

John Key Prime Minister

Click here to watch my video journal on welfare reform.
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This week we rolled out the first stage of our welfare reform package that we campaigned on at the election.  Delivering better public services is one of our four top priorities for this term of Government.  Welfare reform is an important part of this.

On Monday we announced that legislation will be introduced to Parliament this month. The first part of our changes will begin to take effect from July this year.

The welfare system will always be there to support those who genuinely need it.  But it's not working as well as it should be.  In some cases it's trapping families on a low income and in a life of poverty.

Nearly 13 per cent of New Zealand's working age population are on a benefit of some kind and 220,000 children are growing up in benefit dependent homes.  These numbers are too high, and we have a responsibility to do better for these families.

The first stage of our reforms has two parts.

Changes for sole parents, widows, and women alone

We're building on the success of our Future Focus reforms, which came into effect in 2010. 

We'll extend work testing for Domestic Purposes Benefit (DPB) recipients, with new expectations requiring sole parents to be ready for part-time work when their youngest child turns five, and full-time work when their youngest child is 14.

The Government expects people to be ready for work.  But if there isn't a job available their entitlement won't change.

We're also extending work obligations to those on the Widow's and Women Alone benefits, bringing them into line with other benefits in the system.

Youth focus - investing in our young people

National is targeting support at those young people on a collision course with life-long welfare dependence. Our changes will work with up to 14,000 teens, 3000 of whom are on benefit.

We will improve the way information is shared between the Ministry of Education and Work and Income.  We've got to do better at helping young people who leave school early.  We'll help them into further education, training, or employment, and steer them away from a lifetime spent on the benefit.

We're targeting support to help young people make better choices.  We'll require them to be actively in education or training. We'll also require young people on a benefit to budget their weekly income. Their benefit will be managed, and we'll give them a Payment Card to cover essential items such as food, while excluding alcohol and cigarettes.  We're also going to provide financial incentives for their participation in budgeting, parenting, or other training courses.

Government has a role to play to help people into work.  We're providing more tertiary and trades training places and supporting people to get the skills they need for employment.

Our plans are about giving young people the right support to help move from school into work or further training.  We're ensuring they don't slip between the cracks and into a life spent on welfare.

Building a brighter future through work

National's changes to help get people off welfare and into work means a better life for New Zealand families, and better opportunities for their children.  This is just our first step.  We will roll out the second stage of reforms later this year.  This includes simplifying benefit categories and clamping down on welfare fraud.

I look forward to updating you on our progress throughout the year.

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John Key
Prime Minister

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