New approach needed to keep people off benefit
New research shows that about half of all of the people who left the benefit system following the 2012/2013 welfare reforms were back on the benefit within 18 months highlighting the need for investment in the regions, higher education, and apprenticeship programs to keep people in work.
Minister of Social Development Carmel Sepuloni has released a report into what happened to people who left the benefit system following the 2012-2013 welfare reforms. The Ministry of Social Development research was launched at Wellington Hospitality Group Limited, which is a Mana in Mahi – Strength in Work employer.
“This report shows that while many people desperately want to work, creating the conditions that keep them in work requires a much more sophisticated approach,” Carmel Sepuloni said.
“Of the 133,000 people that left the benefit system in 2013 / 2014, nearly half (46 percent) went back on benefit within 18 months.
“The previous Government touted the numbers coming off benefit as a success in their own right, regardless of what happened next in those people’s lives.
“This Government believes real success comes when people are in sustainable long term work, that pays them enough to provide for their children and lead a good quality of life.
“That’s why this Government is focussed on growing work opportunities by investing in the regions and programmes like Mana in Mahi – Strength in Work, aimed at getting young people on the benefit into apprenticeships.
“This research tells us that much more needs to be done to ensure work is sustainable, especially for Maori men, those in the regions, and young people.”
The report findings showed people were more likely to return to benefit if they:
- were male - 50%
- under 30 - 49%
- were living in the regions where there is a high concentration of seasonal work - 56% for East Coast region and 51% for Southern region
- had multiple spells on the benefit - 68%
- left the benefit to pursue low level qualifications (NZQF level 1- 3) – 65%
“Those that had a better chance of staying off benefit tended to live in our bigger cities where there were more employment opportunities, were over 30 and had done tertiary level study (NZQF level 7 and above) or received industry training,” Carmel Sepuloni said.
“Those that left the benefit to do tertiary level education were much better off than those that did low level qualifications, highlighting the need for us to support people to take up meaningful tertiary training.
“The Ministry of Social Development will now do targeted research to understand what courses and training aren’t fit for purpose and are failing to prepare people for work. More work will also be done to understand seasonal work impact on employment sustainability.
“The Ministry’s renewed focus on the wellbeing of its clients means that more MSD research will be released regularly to ensure we are making evidence based policy decisions that result in more people in sustainable work or upskilling and training that leads to sustainable and meaningful employment for them,” Carmel Sepuloni said.
About the research
The research undertaken by the Ministry of Social Development looks at outcomes for 133,000 people who exited a benefit from 1 July 2013 to 30 June 2014. It follows research published by Superu in 2017 that looked at why people exited the benefit system between 1 July 2010 and 30 June 2011.
The research is part of deepening knowledge of exits and re-entry to the benefit system. In addition to looking at reasons for leaving a benefit, this round of research also looked at people’s earnings following a benefit and the sustainability of employment and earnings.
The research shows that while people leave a benefit for reasons including employment, education and training, they were most likely to return to benefit if they lived in regions with high rates of seasonal work, went into detention or study, had a history of multiple spells on a benefit, were Māori, younger, male.
However, people were more likely to remain off a benefit if they lived in a large city centre like Auckland, Wellington or Christchurch, were over 30 years of age and female, didn’t have a history of multiple spells on a benefit, exited to employment or due to partnering with someone, or were employed in areas like public administration and safety, healthcare, social assistance and financial and insurance services.
- The research report is available at https://www.msd.govt.nz/about-msd-and-our-work/publications-resources/research/benefit-system/what-happened-to-people-who-left-benefit-system-during-the-year-ended-30-june-2014.html
- Read the Ministry of Social Development’s Statement of Intent 2018-2022 http://www.msd.govt.nz/about-msd-and-our-work/publications-resources/corporate/statement-of-intent/2018/index.html