Prime Minister John Key announced the first tranche of National's welfare reforms in Hamilton yesterday, putting stronger obligations on beneficiaries to look for jobs and to take work when it was offered. The changes are expected to save about $1 billion in welfare costs over four years.
Under the changes, all current benefit types would be dropped and beneficiaries placed into three categories, depending on their ability to work. Only those with terminal illnesses or serious, permanent disabilities would be exempt from having to look for work.
The harshest changes apply to some solo parents in an apparent bid to cut down on what Mr Key once described as breeding for a business solo parents who had more children, qualifying them for a larger benefit.
Mothers on the benefit who have further children will have to look for work when that child turns one. Mr Key said the 12 month `exemption' from work hunting was in line with parental leave provisions for other parents.
Other single parents will have to look for part time work when their youngest child turns five, and full time work when the youngest child is 14 - the age at which a child can be left unsupervised. Those on sickness benefits will also be required to look for work and will be offered funding for medical help to speed their recovery. The only group exempt from work requirements will be those with terminal illnesses or severe permanent disabilities.
Mr Key said the tougher obligations were fair and would be matched by $130 million in funding to provide support such as training, help with childcare costs, and medical treatment. He said the extra funding was an `investment.'
There is no over-riding reason why these sole parents can't work full time and in fact a great many outside the benefit system do.
About 328,000 people were on benefits about 12 per cent of the working age population. About 234,000 children lived in homes where the benefit was the main income.
These are poor outcomes for beneficiaries, for their children, for society and for taxpayers, and I don't believe it's what the architects of the welfare state had in mind.
He said it was currently a passive system.
For the most part, it simply hands over benefits and leaves people to their own devices. Most beneficiaries are not expected to be available for work or to take up work when it is offered to them. Naturally, many don't.
The level of benefit payments would not be cut and would continue to increase with inflation. However, sanctions in the form of cuts to their payments would apply if beneficiaries did not meet their obligations.
The changes are less severe than those recommended by the Welfare Working Group, which proposed all solo mothers be required to look for work when their youngest child was three and those who had further children to look for work when the baby was just 14 weeks old.
However, the reforms were slated by National's opponents as unfair, especially at a time when jobs were hard to get.
Labour leader Phil Goff said it was an admission of failure by National. Beneficiary numbers had increased by 60,000 under its watch.
Fiddling with the welfare system and penalising parents won't create the jobs. All [National] is proposing it to rename benefits and tell parents with children to get back to work. What you have to do is give them jobs to go to and affordable childcare.
Sue Bradford, the Mana Party welfare spokeswoman, said it amounted to harrassment of beneficiaries and a `war on the poor.'
John Key is calling it an investment approach to welfare, but the only investment is in a big stick with which to beat unfortunate beneficiaries.
Maori Party co-leader Tariana Turia said welfare dependency was bad for Maori, but the party would watch closely to ensure that the most vulnerable including the disabled and children - were not punished by the changes.
Mr Key said the job market was already picking up 43,000 more people were in work than a year ago - and was forecast to grow by a further 170,000 jobs over the next four years.
FACTBOX:
* About 135,000 people currently on the unemployment benefit, sickness benefit and sole parents whose children were aged 14 or over would go on a Job Seeker Support benefit. They will be required to look for work and take work when it is offered. Some those who were sick or injured would receive temporary exemptions until they were well.
About 93,250 single parents with children under 14 would go on a new Sole Parent Support benefit and be required to look for part time work and take part in training. Single parents who had another baby would have to look for work when that baby turned one.
About 92,500 people on the invalids' benefit or who were the sole carer for invalids would be on a Supported Living Payment, and would not be required to look for work.
* Legislation to make the changes will be introduced early next year, if National is in Government, and the changes will be phased in from July 2012 and fully in place by 2013.
Cost: $130 million a year. Savings: $1 billion over four years.
Aim: 46,000 off benefits and a further 11,000 into part time work.
- Claire Trevett, New Zealand Herald
