19 December 2001 Media Statement

DPB changes backed by international experience

New changes to actively assist sole parents on the domestic purposes and widows benefits to move back into the workforce when family responsibilities allow are backed by international experience, says Social Services and Employment Minister Steve Maharey.

The changes are contained in the Social Security (Working Towards Employment) Amendment Bill which is to receive its first reading in Parliament today.

Steve Maharey today released a suite of papers which detail the rationale for more intensive and personalised case management of sole parent beneficiaries and international evidence showing that the approach works. A number of the Treasury briefing papers in the suite have already been publicly released.

“The changes in the Bill now before Parliament start to reform our social security system to respond better to the needs of individuals and their families. In particular, international evidence shows that more regular and personalised case management increases the likelihood that sole parents will move into and stay in real jobs, earning real wages.

“Around the world many countries have reformed their approach to sole parent beneficiaries, while others are in the process of doing so now.

“A common feature of these changes has been a move away from the kind of ‘work first’ approach National introduced to New Zealand in 1999 towards the facilitative approach contained in the Bill. International examples of this approach include the British New Deal for Lone Parents, the Australian JET programme and the highly successful New Zealand COMPASS scheme.

“Overseas research clearly shows that forcing sole parents off welfare and into any job, regardless of their personal family circumstances and responsibilities, leads to an increase in poverty for them and their children.

“It is also clear from officials’ advice that the changes to the administration of both benefits contained in the Bill will not slow a return to the workforce. An increasing number of sole parent beneficiaries have had success in finding work in recent times, but as the report notes there is no established link between work-testing and greater rates of employment. Other factors have also had an impact, including an improvement in labour market conditions and a decline in the growth of sole parent families.

“As the evaluation report which I released last month on National’s 1999 changes showed, DPB and widows beneficiaries are highly motivated to get back into the workforce. There were significant barriers that worked against sole parents entering and retaining employment. The move to intensive case management contained in the Bill will see sole parent beneficiaries sitting down at least every year with Work and Income staff to identify and remove those barriers.

“Replacing the current ineffective work test with improved and more flexible case management was a commitment made by both Labour and the Alliance in their pre-election policies. We have honoured that commitment.

“As the papers I have released today show the changes bring New Zealand in to line with other OECD countries and better support sole parent beneficiaries to get into paid employment and stay there,” Steve Maharey said.

ENDS

A backgrounder on the key provisions of the bill is available.

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