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State to pay NZ teen beneficiaries’ bills, Key says

State to pay NZ teen beneficiaries’ bills, Key says

By Pattrick Smellie

Aug 14 (BusinessDesk) – Teen beneficiaries will have their rent and power bills paid directly by the state from their social welfare benefit entitlements, and will be unable to buy smokes or booze with a special card containing most of their remaining benefit, Prime Minister John Key announced at the National Party’s pre-election national conference.

Against a backdrop of nihilistic youth riots and looting in Britain, Key used his keynote speech to outline an attack on youth unemployment and beneficiary rates as the first prong in a re-elected National-led government’s approach to welfare reform.

Vowing that he believed “very strongly” in the concept of a welfare state, and had benefited from it as the child of a sole parent, Key said the current system was failing teenage beneficiaries, many of whom had disappeared from the school system, were struggling as young parents and had no qualifications.

He outlined policies with an immediate up-front cost of $20 million to $25 million a year to get all 16 to 18 year-old beneficiaries, with the exception of invalid benefit recipients, into education, training or work, to provide an adult mentor for each, and to fund childcare for teen parents when they attended new training schemes.

He also foreshadowed an unprecedented level of state intrusion into beneficiaries’ lives, saying privacy laws would be changed to require schools to tell the Ministry of Social Development when teenagers dropped out of school, so they could be tracked and assisted into the new programmes.

More fundamentally, Key is proposing to have the MSD or provider agencies pay teen beneficiaries rent and power bills directly from their benefit - a move long opposed by social policy agencies for its potential to erode personal responsibility.

“Money for basic living costs, like food and groceries, will be loaded onto a payment card that can only be used to buy certain types of goods and cannot be used to buy alcohol or cigarettes,’ he said. Teen beneficiaries would have a “certain, limited amount” to spend at their own discretion.

Key was unapologetic about such a “hands-on” approach.

“These are kids as young as 16 we are talking about, many of whom have difficult backgrounds. We simply cannot continue to give them money and trust they will do the right things with it,” said Key. “That approach has not worked.”

With 328,000 people in total living on benefits, half of whom had been on a benefit for more than five years, and 222,000 children are living in a household dependent on social welfare benefits.

“The fundamental question you have to ask yourself is: ‘is this what the architects of the welfare state had in mind?’ I don’t think it is.”

“You also measure a society by how many vulnerable people it creates. At the moment it is creating too many, so we are going to make changes.”
The first of these would be in the youth benefits area, with further policies to be released in the lead-up to the Nov. 26 election.

Key said between 8,500 and 13,500 young people aged 16 or 17 were currently not in education, training or work, 90% of whom would go onto benefits as adults, based on current outcomes.

“It is therefore worth investing money up front, when these kids are young, to get them back on track,” he said. However, the system lost track of these teenagers when they left school.

Privacy and Education Act amendments would require schools to inform the government when 16- and 17-year olds left school during the year.

“For the first time, we will be able to find out who all these disengaged 16- and 17-year-olds are; what circumstances they are in; what problems they have had at school; and what their risk of long-term welfare dependency is,” Key said.

On top of this, the government would fund a range of transitions services more closely targeting young people most at risk of long term dependency with a wider range of services and mentoring, and would reward providers based on their results – a new move.

“For the first time, a considerable part of the government’s funding of transitions services will depend on something actually changing,” said Key. “That could include goals like the young person successfully completing a training programme, or not being on a benefit at age 18.

“Put simply, we are going to make it worth someone’s while to get these young people back on track.”

There would be 7,500 training places available next year under the Youth Guarantee policy, providing school qualifications studies at polytechnics and wananga, and 4,500 places in work-focused trades and technology training available within two years.

The government would fully cover childcare costs for teen parents undertaking such courses.


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