Hon Paula Bennett
Minister for Social Development
Associate Minister of Housing

9 April 2013 Media Statement

Welfare Reforms Pass Into Law

Social Development Minister Paula Bennett welcomes the passing of the Social Security (Benefit Categories and Work Focus) Amendment Bill into law.

“The changes we’re introducing will modernise and simplify the welfare system,” Mrs Bennett said.

“They will also ensure work expectations and social obligations are balanced with the right incentives and support.”

This Bill is the second stage of a comprehensive package of welfare reforms. Three new benefit types will replace the seven current benefit categories, in addition to the new Youth Payment and Young Parent Payment introduced in August last year.

The new categories this Bill creates are:

• Jobseeker Support for those actively seeking and available for work
• Sole Parent Support for sole parents with children under 14 years
• Supported Living Payment for people significantly restricted by sickness, injury or disability.

“The legislation also introduces new social obligations to ensure children in benefit-dependent homes get quality Early Childhood Education, are enrolled with a doctor, get their Well Child checks and are in school if they are school-age,” Mrs Bennett said.

The law will also require Jobseekers to be drug-free, and will allow benefits to be stopped for outstanding arrest warrants.

“Over 40 per cent of jobs advertised with Work and Income require a drug test. It is simply unacceptable that many are unable to work and take up available job opportunities because of recreational drug use.”

An actuarial valuation based on the expected durations of all current beneficiaries shows the lifetime costs to be $78 billion.

The investment approach will target interventions and support to those most at risk of long-term welfare dependence.

“By investing in people sooner, we can actually start to break that cycle of dependence.”

“Jobseeker Support will include those capable of work and those who are temporarily exempt, but will soon be able to work,” says Mrs Bennett.

This includes those currently on the Sickness Benefit, who according to work capability, will have a part-time or full-time work expectation or a temporary exemption until they are work-ready.

People currently receiving Women Alone or Widows Benefit will retain their higher rate of benefit when they transfer to Jobseeker Support and along with those on the DPB, they’ll also retain current part-time benefit abatement rules.

“Benefit rates will remain unchanged and there will be extra support for those who want to work but need more help to get them ready,” says Mrs Bennett.

The current annual reapplication for the Unemployment Benefit will apply to all those on the new Jobseeker benefit.

The changes in the Social Security (Benefit Categories and Work Focus) Amendment Bill will come into effect from July 2012.

ENDS

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