7 May, 2012
Budget 2012: Extra funding for welfare reforms
The Budget this month will provide $287.5 million over the next four years for the first phase of the Government’s welfare reforms to help more New Zealanders into work, Social Development Minister Paula Bennett says.
This includes $81.5 million of additional up-front funding, with the remainder reprioritised funding from within Social Development.
The second phase of reforms will be funded in Budget 2013. The entire welfare package is expected to cost at least $520 million and it will save $1 billion over four years.
“Added to the current $7.6 billion annual cost of welfare, this extra investment provides support - such as childcare and staff - that is vital to the reforms.
”The Government’s welfare changes require a significant up-front financial support. We’ve made a commitment to provide that investment to ensure fewer people are on welfare long term.
“The first phase of spending is focused on better supports that will help more people out of the welfare trap,” Mrs Bennett says.
Budget 2012 will include:
- $80 million over four years for Early Childhood Education childcare and the Guaranteed Childcare Assistance Payment.
- $55.1 million over four years for 155 dedicated Work and Income staff to support Jobseekers and sole parents into work.
- $148.8 million over four years for youth services including wrap-around support.
“Support for young people is central to the wider welfare reforms,” Mrs Bennett says.
“Funding for youth services will be targeted at budgeting and parenting courses, milestone payments to providers and wrap-around support as well as an extra incentive payment to young people.
“This also includes $77.6 million to support the roughly 14,000 disengaged 16- and 17-year olds, to move them into education or training.”
Of the total $148.8 million for youth services, there is $134.7 million for Youth Service providers. This is an increase of $75.9 million over four years for providers above current funding levels.
“For the first time, the Ministry of Education will share information with the Ministry of Social Development to track and pick up these young people.
“Youth Providers will have unprecedented flexibility to work with disengaged or unemployed young people and teen parents to get them into education, attaining NCEA Level 2, or in training.”
The Government’s wider welfare changes also include:
- A new work-focused benefit called Jobseeker Support
- Part-time work expectation for sole parents with children aged over five years
- Full-time work expectation for sole parents with children aged over 14 years
- A new Sole Parent Support benefit to replace the DPB
- A new Supported Living Payment to replace the Invalid’s Benefit and DPB care of sick and infirm.
- An investment-based approach to the benefit system.
Expectations will centre on each individual’s capacity to work shifting the focus to what people can do - not what they can’t do, Mrs Bennett says.
The investment approach tailors support to get the best results based on an individual’s likelihood of becoming long-term welfare dependent.
“For example, it makes sense to put more resources and support into helping a teen parent with no education than, say, a university graduate who is between jobs,” Mrs Bennett says.
“Underpinning the investment based approach is a focus on the long-term social and financial cost of welfare dependency. 170,000 New Zealanders spent the majority of the past decade on benefits. That’s bad for children, families, individuals and the economy.”
The first Bill in the National-led Government’s comprehensive programme of welfare reform is before select committee and takes effect from July.
A second Bill containing an overhaul of benefit categories will be introduced this year and will take effect from mid-2013.
- Welfare_Reform_Q&A_May_2012 (pdf 66.2 KB)