8 January 2002

Confidential Documents Support National's Concerns Over Planned Changes To DPB

Papers obtained by National under the Official Information Act prove the Government has completely ignored advice from Treasury regarding planned changes to the DPB.

The Government intends to remove the work-test for those on the DPB and replace it with an enhanced case management concept.

National's Social Welfare Spokesperson Bob Simcock says he agrees with the Treasury report that states such a move will result in lower employment outcomes, longer duration on benefits, and higher benefit expenditure.

"The Treasury Report goes on to make a number of key points. Between 1991 and 2001, the proportion of sole mothers employed increased from 28% to 45%, compared to the increase from 61% to 65% for partnered mothers.

"There can be no doubt that by introducing an untested case management concept the employment rate of sole mothers, particular the full time rates, will decline and once again the employment gap between sole and partnered mothers will widen.

"What is being proposed is vastly different from any other case management study used in the OECD, with the closest comparison being the Casework Model implemented in the United States back in the 60's.While it promised much benefit numbers actually increased rather than declined.

"The report notes that by removing the work test it weakens the work obligation message to DPB and WB recipients, which is a move in the opposite direction to other OECD countries.

"So what we have is a scheme that is going to cost more, mean more people stay on benefits longer and case manager numbers having to double.

" I share the view of Treasury, the current scheme works and so replacing a policy that works with one that has not been fully developed is risky. Why do it," says Mr Simcock.

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