Balancing benefits with obligations

Labour MP Carmel Sepuloni. Photo NZ Herald.
Carmel Sepuloni. Photo NZ Herald.
An overhaul of New Zealand’s benefit system is under way, led by Minister for Social Development Carmel Sepuloni.

The review of the system is welcomed by many beneficiaries and their representatives but, as is usual, the issue has caused divisions in political parties.

News the number of people whose benefits are suspended or cancelled each day has dropped has been welcomed by Ms Sepuloni and Auckland Action Against Poverty.

Last month, the Government made a change to Work and Income’s policy so any decision to suspend a benefit has to be approved by a second senior-level person.

The extra level of scrutiny has resulted in the number of benefits being suspended each day dropping from just over 100 to about 80.

Ms Sepuloni was not surprised by the drop, saying it shows how important it was to change the process.

National MP Louise Upston and National leader Simon Bridges both came out firing against the changes, calling it a warning there had been a near 21% drop in the number of benefits sanctions imposed since Labour took office, and a worrying increase in the number of people receiving the main benefit.

The numbers are concerning, given more than 70,000 moved off benefits and into work between 2011 and last year. The number of children living in benefit-households reduced by 60,000 in the same period, the MPs said.

More people are moving on to a benefit but fewer sanctions are being imposed on those who fail to hold up their end of the bargain.There are nearly 2000 more people on the Jobseeker benefit despite that drop in the number of sanctions imposed.

One of the major concerns for many working New Zealanders is the growing number of sole parents who are not naming the father, or fathers, of their children.

It is not an easy discussion to have. The sanction on solo mothers who refuse to name the father of their child is making life harder for 16,842 children in low-income households, a government report shows.

Removing the sanction, which the Government in January signalled it will do, will cost $100 million over four years, according to a report from the Ministry of Social Development.

Ministry officials also warn that the costs may be even higher if levels of compliance fall  — a possibility the National Party has previously warned about.

This week, the Ministry for Women put out a paper discussing how best to have mothers return to the workforce. The encouraging news contained within the report "Something’s got to change" includes the desire of mothers to return to work to make a better life for themselves and their children. The 40 mothers interviewed say they often feel intimidated by the complications of entitlements and they want a clearer way to identify their entitlements, or have the advice of a helper to guide them through the process.

Clearly, an easier process needs to be in place. Measures are already in place to help those with young children through the Government’s Family Package. New Zealanders are a generous race and no-one will begrudge taxpayer help to those in genuine need. Help is available for those on low incomes, or those working several jobs to make ends meet. The minimum wage is increasing and the living wage is becoming more normal.

Benefit sanctions are recognised as an effective tool to help people into work. About 95% of people who receive a formal warning meet their obligations within four weeks.

Ensuring benefits come with obligations is a fair agreement between those receiving help and those providing it through paying their taxes.

Ms Sepuloni will be wise to take extra care when reviewing what actions she recommends for changing the way beneficiaries are treated.

Going too far with removing sanctions or penalties will create a political backlash that caused a previous National government to impose harsh measures. The pendulum needs to swing gently this time to avoid an overreaction in the future.


A worrying amount of people receiving Universal (Regardless of Circumstance), Superannuation, which also comes from MSD.

Feminists told us that woman could do anything a man could do, and now they are stuck with having to be both the male and female roles of raising children.