Welfare Reform

 

 

The welfare system is failing New Zealanders.

 

It has created a cycle of dependency that has 12 percent of working age New Zealanders on benefits, directly affecting more than 220,000 children.

 

The system, I say, is failing them.

 

And it is out of step with today’s needs because times have changed.

 

Today we have teenagers on welfare who have been given a weekly sum of money and just left to get on with it.

 

Many of these teenagers are parents. It is an abdication of responsibility to simply leave them and their babies to fend for themselves.

 

We have sole parents trapped on welfare with little support and little hope.

 

We have women consigned to a life of welfare because over thirty years ago society said women couldn’t support themselves without a man.

 

This Government is bringing the system out of the dark ages and into the light of modern day New Zealand.

 

We started with Future Focus changes in 2010, which proved the benefits of moving from a passive, to an active approach.

 

We’re continuing with reforms because we owe it to New Zealanders.

 

We will provide more support and we will expect more too.

 

It’s a fair balance and it’s about time.

 

Young people on benefits are among our most vulnerable citizens. 

 

More than half of those who first go on benefit at 16 or 17 years old, will spend at least five of the next 10 years on benefit.

 

The lifetime cost of paying these young people a benefit is higher than for any other group. The social cost can be devastating.

 

More than a third of those on the DPB became parents as teenagers and almost half of all those on the DPB have no formal school qualifications.

 

The long term consequences are obvious. But we can make a difference. 

 

The measures we’re introducing will reduce the risk of long term benefit dependency for teenagers.  They are designed to balance support and obligations in a way that will improve outcomes for young people.

 

We want to make welfare a less attractive proposition for young people.

 

We will not continue to dish out money to young people and teen parents and just hope they will be ok.

 

Instead, with the Youth Payment for 16 and 17 year olds and Young Parent Payment for 16, 17 and 18 year old teen parents, we will help them manage their money.

 

A Youth Service Provider will be attached to each young person and will help them to set up redirections so their rent and utilities are paid.

 

After bills are paid, the Provider will help them budget an amount to go on their Payment Card to be used for food and living essentials with any remainder as a cash allowance which they can manage themselves.

 

The Payment Card will work at a wide range of supermarkets and grocery stores.

In return for this financial support, young people will have clear obligations to be in education, training or work-based learning.

 

There are three different incentive payments - they can earn an extra $10 a week for meeting certain obligations.

 

A 16 or 17 year old receiving the Youth Payment could earn up to $20 a week extra by completing a budgeting programme and remaining committed to education or training for at least six months.

 

It’s great to be incentivising instead of constantly sanctioning.

 

There will be incentives and obligations for teen parents too.

 

We will no longer just assume teenagers who are sole parents on welfare, know how to look after their children without support.

 

These are very young people bringing up babies – both are vulnerable.

 

So these young parents will have to enrol their child with a primary healthcare provider and complete Well-Child/Tamariki Ora checks.

 

As an extra incentive, someone on a Young Parent Payment could earn an extra $10 a week by completing a parenting programme.

 

If they also do a budgeting course and stay in education for a sustained period of time, they could earn up to $30 a week extra, in total.

 

It makes sense to provide incentives to reward positive behaviour particularly when it’s so beneficial to these young people and their children.

 

But, failure to meet obligations means those incentives could be removed as well as their cash allowance.

 

The education and training expectation is crucial. 

 

Young people and teen parents on benefits often come from disadvantaged backgrounds and have considerable challenges to face.

 

With few or no school qualifications many find it difficult to get work. 

 

So this vulnerable group of young New Zealanders often end up totally dependent on welfare, some for very long periods of time.

 

We will not fail them by standing back and allowing that to happen.

 

By caring enough to lead these young people to the wealth of opportunity New Zealand has to offer, we give them a future.

 

And we really are making sure nothing stands in the way of that.

 

We recognise that for teen parents to resume or continue their education or get into training, childcare is vital.

 

So a Guaranteed Childcare Assistance Payment for children under five will remove what can be a barrier for many.

 

A key component to the changes for young people will be the way we engage with them.

 

Experienced, specialist providers will work with these young people, helping them into settled accommodation, to learn to budget their money, access education or training and meet their obligations.

 

They will help these young people navigate their way to independence.

 

This wrap-round support will not just be available to young people on welfare, but also to disengaged 16 and 17 year olds leaving school early.

 

We know there have been anywhere up to 13,500 young people falling out of school and not going into work or training.

 

This Government cares enough to change the law so government departments can keep track of these young people and we can help them.

 

We’ll target those most at risk of becoming completely disengaged from education and work and who’re on a collision course with welfare.

 

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 will extend these supports to 16 and 17 year olds, and 18 year olds with children, who are the spouse or partner of an older beneficiary.

 

These young people have often left school early and in many ways are similar to the young people receiving the new payments. 

 

There are 200-300 young people in this category who will need to meet the same education, budgeting and parenting obligations as those receiving the Youth Payment or Young Parent Payments.

 

We think that they will benefit from the same obligations and from being assigned a service provider.

 

As well as these positive changes for young people, we’re focused on better support for sole parents.

 

The welfare system has let many sole parents down and in doing so, has let their children down too.

 

The system of support for sole parents was designed over thirty years ago and with good intentions, but for a different society, in a different time.

 

It’s now out of step with modern day New Zealand.

 

Instead of providing support to allow sole parents to get back on their feet, it’s trapping sole parent families in a cycle of dependence.

 

Reforming the system is a complex process and requires substantial change.

 

Those who feebly use unemployment as a reason not to change the system, are perpetuating a history of this country failing beneficiaries. 

 

Make no mistake we want more New Zealanders in work and welfare reform will help to achieve that.

 

Butthese changes are also about much more than that. We’re providing more support than ever, with a big focus on education, training and study.

 

We are focusing on the children of beneficiaries because we value them.

 

I refuse to give up on these New Zealanders. I refuse to consign them to a life of welfare as if that’s all they are worth.

 

I am proud to introduce changes to the work availability expectations for sole parents.

 

From October, sole parents will be expected to be available and looking for part-time work when their youngest child turns five.

 

There will be a full-time work expectation once their youngest child is 14 years old, rather than 18, as the policy now stands.

 

Those sole parents who choose to have more children while on a benefit will have a year before work expectations resume.

 

These are reasonable expectations. 

 

Working New Zealanders are entitled to one year of unpaid parental leave before they are expected to return to work.

 

It is reasonable to expect the same of beneficiaries.

 

With school-age children, parents are more able to work part time.

 

It is reasonable to expect sole parents to work full time when their children are 14 years and older.

 

Thousands of New Zealanders are doing just that today.

 

Work is not a dirty word.

 

In fact there are broad benefits to being in work.

 

Parents are better off in work financially and they are better off in terms of self esteem, confidence and pride.

 

Providing a positive role model for children is priceless.

 

We should applaud the many thousands of parents who work and bring up children now.

 

Particularly, the 30% of sole mothers who currently work full time.

 

No one will say it is easy, but it is important.

 

The welfare system has previously provided very little in the way of support for sole parents. We are changing that.

 

More parents on benefits need to be connected with opportunities to work or improve their skills.

 

We’ll help beneficiaries prepare for interviews, shape up CVs and job applications and get job-related training to build the skills employers need.

 

We recognise making the shift off welfare can be challenging and there will be a strong focus on getting ready for work expectations. 

 

In fact we will actively engage people in work preparation activities well before their youngest turns five or fourteen.

 

Currently the majority of work support is given to those who’re likely to be on short-term benefits, like the Unemployment Benefit. We’ll turn that around.

 

We’ll target more support to those who’re likely to be on welfare long-term.

 

While that’s the harder option, it’s the basis of the investment approach we’re taking.

 

We’re also turning around the very old fashioned attitude that says women are so helpless they need to be supported by the State if they’re not partnered.

 

Neither the Widows or Women Alone Benefits are available to men.

 

These benefits have no work availability expectation for the women receiving them.

 

This is an outdated concept and one that needs to change. 

 

It’s simply out of step with today’s society and illustrates a fundamental belief these women can’t contribute to the workplace.

 

We don’t accept that is true.

 

This Bill will introduce work availability expectations for those on the Widow’s and Women Alone benefits depending on the age of their children.  

 

I understand that this is going to be a major change for many women.

 

But again, I reiterate the expectation is to be available and looking for work.

 

If a job is not available, the financial support will continue.

 

That is reasonable.

 

Changes that this Bill introduces represent the first part of a comprehensive package of welfare reforms staged over two years.

 

These changes will transform the benefit system into one that is modern, active and work focussed. 

 

The new system takes a long term investment approach to getting people off benefit and into work. 

 

The changes are essential. 

 

The fiscal costs of welfare are as serious a problem as is the waste of human potential associated with long term benefit dependency.

 

I commend this Bill to the House.