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The first stage of the Government's welfare reforms came into force yesterday, with a shake-up to youth benefits, as services were contracted out to 43 different local providers.
Social Development Minister Paula Bennett said the changes introduced yesterday would affect about 17,000 youths and targeted those between 16 and 18 who were either on benefits or not in education or employment, and parents under the age of 19 on benefits.
As part of the changes more than $148 million was being invested in support services aimed at helping young people become independent and not reliant on benefits, Ms Bennett said.
The changes also saw the introduction of 43 different "youth service" providers, selected through a tendering process.
"The key components to the services, along with mentoring and support, are an unwavering emphasis on education and training as well as parenting courses for those with children," Ms Bennett said.
The way young people received their benefits was also in for shake-up after they had met their new service provider.
Essentials such as rent and power would be paid on their behalf and money for living costs, such as groceries, would be loaded on to a "payment card", which could not be used to buy items such as alcohol and cigarettes.
Only a "limited amount" of their benefit would be able to be spent at their own discretion.
General manager of Community Colleges New Zealand, which was the contracted "youth service" provider in Otago, Southland and in Canterbury south of Ashburton, Doug Reid said he was "looking forward" to helping get youth into education and off benefits.
The organisation had employed eight staff to carry out its contract, which included linking youth with education providers, giving parenting and budgeting advice and "benefit administration", which was formerly carried out by Winz.
Its main aims were to ensure each client had a "plan" relating to work or training, had achieved NCEA level 2 and were not on benefits when they turned 18.
The extra money the Government was investing meant it would be able to provide support which Winz was unable to, he said.
Community Colleges New Zealand would be held accountable through quarterly reporting to Winz.