Social Development Minister Louise Upston Photo: RNZ / Angus Dreaver
Social Development Minister Louise Upston has announced a ramping up of benefit sanctions will begin from June - particularly for young people.
The ministry will begin "work check-ins" for jobseekers who have been on a benefit for at least six months, "particularly young people" to "make sure job seeker beneficiaries are taking appropriate steps to find employment and are receiving the right help".
She has also released a letter she sent to the head of the Ministry of Social Development (MSD), outlining her expectations for the welfare system.
Upston announced the moves alongside Prime Minister Christopher Luxon in a briefing to media after the Monday Cabinet meeting.
Luxon said current modelling showed a young person who spent almost their entire working life on a benefit would end up costing nearly $1 million in taxpayer funding. The government's moves would ensure those people who could work, did, he said.
"There also needs to be consequences for those who knowingly abuse the support they receive from taxpayers," he said.
Upston said the group check-ins would be the first step of additional monitoring of the benefit system, and would apply to people MSD had less visibility of - those who did not already have a dedicated case manager - which was expected to be about 2500 people a month.
The check-ins were expected to cost about $1.2m a year, funded through MSD baselines.
"It is right that our welfare system acts as a safety net for those who need it. But that support comes with certain responsibilities," she said.
She said the check-ins would begin before the rollout of a "more comprehensive" system for benefit sanctions, which would include mandatory reapplication for Jobseeker Support every six months instead of each year, community-provided job coaching, needs assessments, a traffic light system, new non-financial sanctions, and action being taken for those who repeatedly failed to comply with their work obligations.
Work was under way on the traffic light system, she said, and there were several further phases which would be needed to roll it out - possibly including legislation.
She said remaining on a benefit had "become the rational choice for too many people", with 70,000 more people on jobseeker support since 2017 and 40,000 more receiving that support for at least a year.
Jobseeker is available for people not in employment and looking for a job, in part-time work and looking for more work, and those with a health condition or disability affecting their ability to work which means they need to reduce their amount of work or not work for a time.
Upston said those not considered "job-ready", such as those with health conditions and disabilities, would also have obligations - though they may be different.
"Their obligations might be to look for a few hours work, their obligations might be in training or work preparation, but we don't want to wait for the two years before we start to provide the support that they need to get back into employment.
"Let me be clear, there is the supported living payment who have permanent disabilities - this policy is not about them. This policy is about jobseekers and those who are work-ready have different obligations to be finding work now."
Luxon confirmed the check-ins would not apply to those on sole parent or supported living benefits.
She said the supported living payment was available for people with permanent disabilities, and it would not be affected by these changes.
"My expectations with MSD is very clear, it is about jobseekers."
In a statement, Upston said the coalition was taking "early action" to curb welfare dependency.
She pointed to a decline in the number of sanctions applied in the past six years, from 60,588 in 2017 to 25,329 in 2023.
"Over that time, people on jobseeker benefits increased by about 70,000 and about 40,000 more people have been receiving this support for a year or more," she said.
"I believe the previous minister set the tone for a lighter touch to benefit sanctions by saying they needed to be used 'sparingly' and as a 'last resort', dampening their effectiveness as an incentive to fulfil work obligations."
"I'm not prepared to accept the welfare system we inherited, where work-ready job seekers are forecast to spend an average of 13 years on a benefit, and teenagers could become trapped on welfare for 24 years of their working lives."
'Reset' on jobseeker benefits
Asked on Checkpoint if this was a crackdown, Upston replied it was a "reset".
"There are sanctions available when people don't play their bit, don't help themselves to find a job and we just want to make it really clear there's practical things they need to do, to be looking for a job, having a CV, applying for jobs, turning up to job interviews, and there'll be consequences if they don't take those steps.
"If a jobseeker doesn't fulfil those obligations, they may get a reduction in their benefit, the next step would be a suspension or finally a cancellation but there are warnings along the way.
"And what we do know is that the threat of a consequence is often what stirs people into action and gets them to comply again and take those necessary steps to find a job."
The minister said she did not yet have a target number on reducing the number of people on the jobseeker benefit, but that would happen in the coming weeks.
"The best way to reduce hardship for people and their children is to be in work, so I will absolutely be focused on reducing the number of people on the jobseeker benefit."
She acknowledged the jobs needed to be suitable to the person's skills and ability.
Asked if the same effort would be put into tracking down tax evaders, Upston said: "This focus is on those who are on the jobseeker benefit, taking steps that they need to take, to help themselves find work, at the same time, with this additional check-in with Work and Income, make sure that people are getting the support and systems they need.
"I fully understand that for some people they have significant challenges in finding work and we want to make sure they get the support they need."
'There needs to be consequences.'
In her letter to the Ministry of Social Development chief executive Debbie Power, Upston said she was writing to outline the government's expectations "with regard to the strong view this government holds that people who can work should, and that the settings of the wider welfare system support that".
"Leaving these work-ready people, and especially young people, out of work and drifting aimlessly is not what the Government or your staff want to see," the letter, first sent on Friday 16 February, said.
"If they fail to take work that is available, to attend interviews or to complete their pre-employment tasks, there needs to be consequences. This could encourage people to then meet work obligations and gain the benefits from being in employment."
She said this would begin before the rollout of a "more comprehensive" system for benefit sanctions, which would include mandatory reapplication for Jobseeker Support every six months, community-provided job coaching, needs assessments, a traffic light system, new non-financial sanctions, and action being taken for those who repeatedly failed to comply with their work obligations.
Asked if she had spoken to frontline workers about how the system was working and how it could work better, she said she had "absolutely been getting round Work and Income offices", and it was "not my expectation" more staff would be needed to help enforce it.
"I've seen some of the activities that Work and Income do on the front line, and they're great," she said.
Prime Minister Christopher Luxon said the ministry would also be required to report back regularly to the government on its use of sanctions.