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Maharey announces first stage of benefit reforms

17 July 2000 Media Statement

Maharey announces first stage of benefit reforms

Social Services and Employment Minister Steve Maharey today released details of the first stage of reforms to the benefit system.

Legislation to repeal the community work scheme is scheduled to be introduced to Parliament during the next sitting session. Details of what is intended will be discussed at the Social Services Select Committee this week.

"The Government wants to build a modern social security system which is tailored to the needs of individual beneficiaries and which offers people opportunities to increase their skills so that can earn a decent wage in a decent job.

"New Zealand's social security system is like a venerable ocean liner – a ship of state, but it has received nothing more than a new coat of paint now and again over the years. It is high time that we looked at the system itself to determine if it is the right vessel to carry us into the new century.

"Our vision for the social security system is one where individuals are offered assistance targeted to their particular needs.

"The vast majority of unemployed beneficiaries want to work and will do so if a suitable job is available.

"However many of the longer term employed will need extra assistance to increase their work skills and to retrain them for employment in a modern economy.

"The Government's approach is about investing in New Zealanders – it benefits the individual because they are more likely to gain a sustainable job and it benefits the country because the lifeblood of a modern economy is skilled workers.

"National's work for the dole scheme was not able to upskill unemployed New Zealanders for real work in our modern economy.

"It is the job of the social security and employment system to provide security for those who need it, opportunities for those who can take them and not waste precious resources policing make-work schemes like Community Work.
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"The legislation to be introduced during the next sitting session represents the first step in the Government's reshaping of social assistance.

"The provisions include:
 replacing the community wage with an unemployment benefit and a separate non-work tested sickness benefit from 1 July 2001 (in the process reducing the number of benefit categories from seven [within the community wage] to a total of five within the two new benefits);
 embodying work-test obligations in an individual 'job seeker agreement' developed between the beneficiary and the Department of Work and Income from 1 July 2001;
 encouraging participation in community activity, voluntary work or suitable training;
 making unpaid community work a voluntary encouraged activity from 1 December 2000;
 replacing the complicated graduated sanction regime with a single sanction for serious non-compliance from 1 July 2001;
 repealing the provisions relating to the failed work-capacity assessment trial; and
 increasing the income thresholds for eligibility to disability allowance from 1 January 2001.

"Job Seeker Agreements will clearly set out what an individual needs to do to increase their prospects of finding a sustainable job and will form an individual contract between the individual and the Department of Work and Income. For some this will mean education or training to make them work ready, for other clients it will be based on work search activities.

"These changes complement work to increase the flexibility of Department of Work and Income employment assistance announced following the 'Hunn review'.

"Regional flexibility proposals will allow Regional Commissioners more autonomy to adapt services to fit local needs, and the local job market.

"We must recognise that globalisation has brought changes to the employment market. This means that we need to offer New Zealanders opportunities to increase their skills if they are to gain stable jobs in our modern economy.

Our social security policy must be related clearly to our employment policy in areas like training, regional development, research science and technology and small businesses.

"People want to work. What we need is a system that helps people to gain the skills they need to compete in a modern economy. The changes announced today are a first step towards a more flexible and intelligent social security and employment system.

"It is the Government's responsibility to create opportunities andindividuals responsibilities to take them," Steve Maharey said.


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