Goff wants means tests dropped

The Labour Party is calling for the Government to consider paying unemployment benefits to laid off workers even if their partners are on high incomes.

Labour leader Phil Goff said the measure would be temporary and was aimed at taking the pain out of increasing unemployment during the recession.

"You are not talking about people bludging off the system," Mr Goff told the New Zealand Herald.

"You are talking about people who have often never been unemployed in their lives but lose their job through no fault of their own."

Unemployment is forecast to rise as high as 180,000 by late next year.

Mr Goff criticised as inadequate the Government's ReStart programme. It provided short-term support to low- to moderate-income families with children and to people with high housing costs who have been made redundant since the election.

He suggested the requirement that a spouse's income be means-tested be suspended, if only during the recession.

The suspension would be dependent on an individual having previously been in employment for a set period -- for example five years.

The payment would recognise previous taxes paid and give time to adjust to not having a wage and avoid losing the family home.

Labour previously promised a job search allowance for people who lost their job regardless of their partner's income.

That promise was criticised for being too limited and poorly targeted as entitlement was restricted to just 13 weeks without means-testing unless the person went into training.

Mr Goff said Labour was now looking at extending the 13 weeks to a "reasonable period of time", possibly for as long as a year. He emphasised that the party had yet to fully cost the potential policy change.

At present, anyone with a partner earning more than $534 a week cannot get even a partial benefit.

Social Development Minister Paula Bennett said that under Mr Goff's proposal, someone could be eligible for a benefit for up to a year while their spouse earned $200,000, for example.

"I doubt many Kiwis would consider that a good use of the considerably fewer resources this Government now has. I'd be interested to hear what Mr Goff would cut, or which taxes he would put up, to fund such an initiative."

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