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Supporting people into work and income security

Hon Carmel Sepuloni

Minister of Social Development PRESS RELEASE

3 May 2019
Strictly Embargoed until 2pm

Supporting people into work and income security – priorities in welfare reforms
• Welfare Expert Advisory Group report released containing 42 key recommendations

• 263 new frontline staff to focus on helping more people into meaningful and sustainable work

• The Government will scrap the discriminatory sanction that cuts income to women and their children if the name of the child’s father is not declared to the Government

• Abatement thresholds for those on benefits who work will be lifted in line with minimum wage increases

The Government is taking immediate action to support people into work and improve income security for New Zealanders on benefits, in response to the release of the Government’s Welfare Expert Advisory Group (WEAG) report today.

The WEAG report, Whakamana Tāngata: Restoring Dignity to Social Security in New Zealand, contains 42 key recommendations that call for a systematic overhaul of New Zealand’s welfare system with a renewed focus on support to help those on benefits into sustainable work, improved income adequacy to ensure families on benefits are not living in poverty and a culture change in MSD to ensure people are treated with respect.

“Our welfare system is not providing the right support for people in need. This is contributing to issues of inequality and hardship which have been long-term problems for New Zealand that this Government is committed to fixing,” Minister for Social Development Carmel Sepuloni said.

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“The release of the expert working group report and the three announcements made in response to it, represent good first steps to improving the system, but major change will take years.

“In Budget 2019 we will be allocating funds to employ up to 263 frontline staff over four years to support more people into good work, allowing beneficiaries to keep more of what they earn when they do work by lifting the abatement threshold and eliminating a discriminatory sanction that cruelly singled out 24,000 children raised by sole parents.

“Our plans will result in fewer children growing up in extreme poverty and see more people moving off benefits and into decent long term work.

“The Government can’t deliver on every recommendation at once. We are taking a balanced approach and are committed to delivering change over the longer term and prioritising areas like housing and mental health which impact on all New Zealanders but especially those in the welfare system.

“We have decided not to implement the report’s recommendations to increase benefit levels by up to 47% immediately. As we have said, we will be looking at a staged implementation of the report. There are a range of ways to improve people’s financial wellbeing and reduce the number of people on benefits that live in poverty, in line with our commitment to reduce the overall rates of child poverty in New Zealand, and we will be looking at these over the coming years,” Carmel Sepuloni said.

Green Party Co-Leader Marama Davidson says the report released today creates a vital roadmap for significant change and the new budget initiatives our Government is implementing will provide a solid start on that journey.

“We are committed to an inclusive society where everyone is treated with dignity and respect, and supported to participate fully in the community,” Marama Davidson said.

Minister for Children Tracey Martin says that we need a welfare system that is fair to everyone and that supports child wellbeing.

“We need to ensure all parents and caregivers have the resources and ability to provide the best possible care for their children, Tracey Martin said.

Government announcements

The Government will be repealing Section 192, formerly known as Section 70A, that cut incomes to parents and their children if the name of the other parent was not declared to the Government.

“Around 24,000 children will be significantly better off as a result of this change, with many sole parents’ incomes increasing by an average of $34 a week,” Carmel Sepuloni said.

“This will have a meaningful impact on some of New Zealand’s poorest families and fixes an unfair and discriminatory sanction that penalised children because they didn’t have a named father.

“The Government supports parental freedom, and ensuring sole parents and their children are not pushed into poverty because of a private parenting decision that the Government has no need to be involved in.

“National was briefed in 2016 that there was insufficient evidence to support the discriminatory sanction as it didn’t achieve its initial purpose to get money from the partner that’s not named in the birth certificate.

73,000 individuals and their families will be better off by the Government raising abatement thresholds for those on benefits who work.

“This is about ensuring wage fairness and making sure low income beneficiaries can take home more of what they earn.

“This change is about catching up with the times. Abatement thresholds for Jobseeker Support haven’t changed in over 20 years and many people find they are no better off for working, after travel and childcare costs.

“We are supporting more people into work by funding up to 263 new frontline staff over four years.

“The report shows that proactive employment case management is integral to ensuring that people are upskilled and trained so they are matched to sustainable and meaningful employment” Carmel Sepuloni said.

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