Hon Paula Bennett
Minister for Social Development
Minister of Youth Affairs

19 July 2012 Media Statement

Welfare reform bill passes into law

The Social Security (Youth Support and Work Focus) Amendment Bill passed its third and final reading in Parliament today.

‘’The welfare system is changing from a passive approach fostering benefit dependency to an active, work-focused system,’’ says Social Development Minister Paula Bennett

“Young people in particular will have much greater obligations, but also greater supports to help them get the education needed to be independent of welfare.”

“We’re providing $80 million in childcare so teen parents can continue with their education and training and teen parents and young people on benefits can now earn incentive payments by remaining in education and completing budgeting and parenting courses.’’

‘’Dedicated Youth Service providers will help young people pay their bills directly, manage their money and meet obligations like completing education.”

“Previously the system has paid a benefit to these groups and then effectively left them to it. This is going to change,’’ says Mrs Bennett.

Changes also affect sole parents, partners of beneficiaries and those on Widow’s and Women Alone benefits.

Mrs Bennett says aspects of the existing welfare system are out of step with modern life with Widow’s and Women Alone benefits only for women.

From October, sole parents with children over five will be expected to be available and looking for part-time work and full-time for those with children over 14 years old.

Under the previous Government, sole parents could remain on welfare until their children were 18 years old.

This legislation will usher in a change of thinking around work expectations and is the next step in overhauling the benefit system in a fair and balanced way.

The next phase of Welfare Reform, scheduled for implementation in 2013, will simplify the benefit system and bring in a clearer focus on work.

The Youth Package reforms contained in the Social Security Amendment Act commence on 20 August 2012, while work obligations for sole parents, Widow’s and Women Alone start in October 2012
Changes affecting young people and teen parents 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.
Changes affecting DPB, Widow’s Benefit and Women Alone:
• Ensuring sole parents with children five and older are available for 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.

ENDS

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