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Welfare reforms progressing well

Hon Paula Bennett

Minister for Social Development

30 January 2014 Media Statement        

Welfare reforms progressing well

Comprehensive welfare reforms introduced over the past year are delivering strong results, says Social Development Minister Paula Bennett.

“We’re seeing positive developments as we implement welfare reforms to help more New Zealanders move from welfare into independence.”

“Our first priority has always been to either divert young people from entering the welfare system at all, or supporting them off benefit quickly,” says Mrs Bennett.

There are currently around 3,000 teen parents and 16 and 17 year olds on benefits, almost every single one is now under money management.

That means a specialist youth provider works with them to ensure their bills are paid directly, before grocery money goes on a payment card, with up to $50 in the hand. They can’t use the card to buy cigarettes or alcohol.

“Evidence clearly tells us young people who go on benefit, are at the greatest risk of staying there long term over their lives.

“Under the old welfare system, a fistful of cash was essentially handed to teenagers – hundreds of dollars – and they were just left to get on with it,” says Mrs Bennett.

Around the world, countries are grappling with the issues of young people who are Not in Education, Employment or Training and this Government is focused on solutions that work for New Zealand.

This Government has reached out and managed to re-engage with 9,000 young people classed as NEET and connected them to Youth Services even if they don’t go on a benefit.

“I’m proud to say we now have 63% of those 9,000 young people actually in education.

“The best possible outcome for these young people is to re-engage in education because without that, their job prospects are seriously limited,” says Mrs Bennett.

Other changes to the welfare system include stopping benefits to those on the run from police. Beneficiaries are given fair warning to clear outstanding warrants for their arrest or their benefit will be suspended.

So far more than 1,000 warrants have been cleared as a result of this policy.

A change that was introduced as part of Future Focus reforms in 2010, and continued under the new system, is a requirement to reapply for the Jobseeker Support (formerly Unemployment) Benefit after one year.

Since Jobseeker Support was established in July last year, around 4,500 Jobseeker benefits have been cancelled during the reapplication process.

More than a third of those cancellations were due to the fact individuals had already found work and a further 37% didn’t bother to fill in the form.

Another new policy was designed to incentivise people making the decision to proactively move from welfare to work before they are required to.

The Work Bonus allows people to keep some of the benefit for the first few weeks in a new job.

So far, more than 2,500 people have received the Work Bonus, the vast majority of whom were sole parents moving into work.

“Every week more than 1,500 people move off welfare into work and we’re backing every one of them,” says Mrs Bennett.

ENDS

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