Key, Bennett pitch benefit cut-offs

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Beneficiaries will face more frequent check-ups, more penalties and a one-year expiration date for the unemployment benefit under changes to the welfare system announced today.

The Government’s new “Future Focus” package makes a raft of changes to Work and Income policy, including domestic purposes, unemployment and sickness benefits.

Solo mothers on the domestic purposes benefit will be expected to work a minimum 15 hours a week if their child is over the six, while sickness beneficiaries will also be assessed for part-time work.

Sickness beneficiaries would have to produce a second medical certificate at their own expense after eight weeks to continue receiving payments.

The package also offers case managers a new range of penalties, including cutting payments by 50 percent and suspension of payments in full.

Prime Minister John Key said the new penalties would be graduated to give case managers flexibility instead of stopping payments altogether.

The changes would also see payments annually adjusted for inflation and increases of $20 to abatement thresholds.

But the biggest shake-up is the introduction of an expiration date on the unemployment benefit: under the new changes those out of work will have to reapply after one year.

168,000 New Zealanders are currently unemployed according to Government figures – 7.3% of the population - but Key said he expected unemployment rates to decline over the next few years to around 5%.

Social Development Minister Paula Bennett told reporters the package recast benefits as a temporary support.

Many people were eager to find work, but the Government needed to combat “a mentality of entitlement” among others.

Beneficiaries would be expected to work if the work was there and the arrangement was reasonable: 20 hours of free childcare was available to assist solo parents and night-shift work would be considered on a case-by-case basis, she said.

Bennett told reporters the average unemployment benefit lasted less than five years, but could not recall the proportion of benefits lasting over a year.

Nor could she say how many “lifestyle beneficiaries” she believed were abusing the system.

A percentage figure would be misleading, she said.

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