Welfare Reform

The second term National-led Government is comprehensively reforming welfare.

Delivering better public services is one of the National-led Government’s four key priorities for this term. Welfare reform is central to that.  

Why do we need reform?

The current welfare system isn’t working with 13 per cent of our working age population on a benefit and 220,000 children in benefit-dependent homes. 

This is creating too many vulnerable people and trapping them in a life of limited choices, poverty and poor health.

Getting people off welfare and into work means a better life, better opportunities, and a brighter future for people and their families.

The National-led Government’s reforms

The Government is reforming welfare by:

• Ensuring those who can work, do work and supporting them to do so
• Targeting resources at those most at risk of long-term welfare dependence
• Helping young people to make better choices and to stay in education, training or work
• Simplifying the benefit system
• Clamping down on welfare fraud.

The New Zealand welfare system will always be there to support those in genuine need but we are no longer going to hand over benefits and leave people to their own devices.  Instead we are taking an active, work-based approach because we have greater aspirations for New Zealanders and their children, achieved through work, not welfare.

The Government will spend money in the short term to reduce dependency in the longer term, saving the Government and taxpayers’ significant costs.

The National-led Government’s initiatives will modernise welfare to better suit New Zealand’s needs and make welfare work.

We’re building on the gains we made in the first term. In 2010 we introduced the Future Focus package that reformed benefits by rebalancing obligations and support with new initiatives to bring about an unrelenting focus on work.  These reforms are now having very positive effects.

Our reforms are complex and substantial and will be introduced in two stages. We’re currently undertaking the first phase of reforms. 

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

These changes will place greater work obligations on beneficiaries with children, as well as those on Widow’s and Women Alone benefits. It will improve financial and social outcomes for beneficiaries with children and value the capacity of widows and single women to work.  Major changes include:

• Ensuring sole parents with children five and older are available 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.

For further information about these changes click here.

Stage one changes affecting young people and teen parents

These reforms target support young people on a collision course with life-long welfare dependency and 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.

For further information about these changes click here.

Read Minister Bennett’s press release, and Q&A.

For more information, watch this video from the Prime Minister, followed by a video of the Prime Minister and Hon Paula Bennett announcing the changes and answering media questions.

Timeline

Stage one changes will be introduced in March. The changes affecting young people will begin to take effect from July 2012 with remaining initiatives coming into effect from October 2012.  

Next steps

Stage two of our reforms will include the simplification of benefit categories and new measures to clamp down on fraud.  These changes will be introduced in August 2012 and take effect from July 2013.