Government warned against work-for-the-dole sanctions, documents reveal

The coalition government was warned that work-for-the-dole programmes do not increase the chances of people coming off welfare and into work, documents have revealed.

Cabinet has agreed to introduce a suite of new obligations and sanctions, including community work experience (CWE), for job seekers next year.

Official advice, obtained by the Greens under the Official Information Act, shows the Ministry of Social Development warned against CWE in May.

"As described, CWE is essentially a work-for-the-dole programme if it was to be made mandatory," the departmental report said.

"Most evidence shows that work-for-the-dole programmes do not increase the probability of participants moving off [the] benefit and into employment.

"Instead, participants remain on benefit longer than would otherwise be the case (known as the lock-in effect). Investment into other employment supports may be more cost effective."

The ministry said evidence showed CWE worked best for people with limited work experience or readiness and was already offered in some regions on an opt-in basis for clients who met eligibility criteria.

"Staff also exercise discretion as to which clients they recommend to these supports, especially in cases where there is capped funding.

"Some programmes also have low uptake and/or limited funding, with some regions choosing not to offer these programmes and low awareness among frontline staff."

The ministry said it could take steps to "increase the likelihood of effectiveness" by using discretion and eligibility criteria for clients, restricting placement duration and hours and requiring evidence of job searching during participation.

"As evidence indicates, the success of CWE relies on discretionary application to those who would benefit from it most."

The ministry also warned it would need to create a new programme, or significantly change an existing one, to implement mandatory CWE.

"This would take time and resource to work through operationalisation considerations and risks, potentially taking focus away from other aspects of the traffic light system.

"As a result, you may wish to prioritise other deliverables of CWE."

The Green Party's social development and employment spokesperson Ricardo Menéndez March said the government was overlooking official advice and evidence.

"[Social Development and Employment Minister] Louise Upston's complete disregard for evidence just shows that she's actually not interested in improving employment outcomes and rather all she wants is to continue punching down on beneficiaries with rehashed policies from the '90s that did not support people into employment or to meet their aspirations."

He said the coalition should keep community work experience as an opt-in model, rather than a sanction, to help get people off benefits and into work.

"Louise has talked a big game around preventing people being on benefits for a very long time and yet, her own advice shows that work-for-the-dole schemes that are made mandatory could do the exact opposite she is trying to achieve," Menéndez March said.

In a response to RNZ, Upston said the government was focused on reducing welfare dependency that had grown worse since National was last in office.

"Community Work Experience will be another tool at MSD's disposal for keeping job seekers on the pathway to employment when they haven't been fulfilling their obligations to prepare for or find work.

"We will design our own form of Community Work Experience that works for our welfare system. The experience will build the skills and confidence that job seekers need to help them into future employment."

Upston said it was possible to mitigative the negative effects of CWE so people could gain community connections and experience while also focusing on seeking paid work.

"As officials have noted, there are ways to mitigate the 'lock-in effect' associated with these types of interventions by only applying it to beneficiaries where it makes sense given their circumstances and applying it for a relatively short duration of four weeks, which will both be features of this sanction.

"Those who are required to perform community work under our system will also be expected to continue job searching while carrying out the sanction. The hours of community work they will be required to do will be set at a level that allows this."

The Ministry of Social Development is expected to implement new sanctions by July 2025, with legislation being introduced to the House before the end of the year.

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