Photo: RNZ / Quin Tauetau
New legislation enabling non-financial sanctions against non-complying beneficiaries has passed its first reading in Parliament.
It also halves the time before jobseekers must reapply to six months, and doubles how long failures to meet obligations count against them, to two years.
The changes are part of the government's new traffic light system for beneficiaries, which aims to get them off a benefit and into work.
The Minister, Louise Upston, said the changes will keep beneficiaries on track with their requirements.
The opposition said it was just punishing beneficiaries and will not work.
The government wants it in effect by next July.
Sanctions include:
- Money management: Where half of someone's benefit is put onto an MSD payment card that can only be used in approved shops to buy essential items, such as food, transport, healthcare-related items, and education-related items. This will be for a four-week period.
- Community work experience: Where someone will need to participate in work experience at a not-for-profit organisation for at least five hours per week for four weeks.
Applications of certain benefits will also be required to complete a Jobseeker Profile before they can be granted a benefit.
"Changes to the reapplication process will also make it much smoother and faster," Upston said. "For instance, some clients may not need to meet with MSD to reapply if they have recently engaged, like people in dedicated case management. Some applicants will also be able to attend a group work seminar instead of a one-on-one appointment.
"These changes will support more people into work and help achieve the government's target of having 50,000 fewer people on Jobseeker Support by 2030, which is forecast to save the country $2.3 billion in welfare payments."
Upston said they believe having a job is the best way for people to lift themselves and their families out of hardship, and that the government is setting a clear expectation that those who can work, should work.
ACT has welcomed the first reading of the bill, which it said delivers on a coalition commitment to implement sanctions, including electronic money management, for beneficiaries who can work but refuse to take agreed steps to find a job.
"This is real change that will make it far harder to exploit the benefit system," ACT social development and employment spokesperson Dr Parmjeet Parmar said.
Parmar said benefit sanctions are a crucial tool to deal with those who take taxpayer money while refusing to take basic steps to support themselves.
She said a similar electronic money management system had successfully been trialled in Australia.
"It issues an electronic card with tracked spending and restrictions on alcohol, gambling, and tobacco expenditure. Almost all of the benefit comes in this form, with a small amount left in discretionary cash. It has been shown to improve child well-being by reducing spending on harmful habits and increasing spending on children," she said.
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