Domestic Purposes Benefit Factsheet

Domestic Purposes Benefit (DPB) is a weekly payment which helps sole parents with one or more dependent children to look after those children.

Why are we changing DPB?

Future Focus is about helping people on benefits to get back into work as quickly as possible. Sole parents whose youngest child is six are well placed to undertake at least part-time work and their families will be much better off if they are in some type of paid work.

Working just 15 hours a week will mean more money in the pocket of a sole parent than being on DPB. Working 20 hours or more a week will mean they can get off DPB altogether. Research shows that work not only improves their financial situation but increases self-esteem and provides children with positive role models.

What’s new for people on DPB?

• From 27 September 2010, sole parents on DPB will be subject to part-time work obligations when their youngest dependent child is six or older. This will be done using a staged approach where Work and Income will actively work with groups of people to manage their return to work.
• Exemptions may be given to sole parents who genuinely cannot work immediately, such as those with children with special needs or who have just separated for example, but they may still be required to plan for work when they can. There will also be an exemption for sole parents who study full-time at level 4 or above.
• A new loan of $500 per year will be introduced from the 2011 academic year to support DPB sole parents to study at level 4 or above. This loan will help DPB sole parents to meet their course-related costs, on top of the $1,000for course-related costs that is available through the student loan system.
• Sole parents on DPB will be able to earn more before their benefit is affected. The abatement free threshold will increase from $80 to $100 per week and the part-time abatement threshold will increase from $180 to $200 per week.
• Sole parents will lose 50 per cent of their benefit if they do not comply with their work obligations. If this happens, they will continue to receive supplementary assistance.
• We will make it easier for providers to become OSCAR programmes
  • OSCAR Standards for Approval will be reviewed to allow home-based and small scale providers to enter the market
  • OSCAR grant funding will be targeted to encourage provision in the areas where it is most needed.
• Sole parents with children under six will develop an agreed Employment Plan with Work and Income to identify their skills and any areas for development or training.
• The DPB rate will increase in line with the Consumer Price Index each year. This will be enshrined in legislation, rather than occurring by convention, as it currently does.

Who’s eligible for DPB?

The eligibility criteria for DPB remain the same. A person may be eligible for DPB if they:

• have a child under 18 who is dependent on them
• are not in a relationship with the other parent (e.g. not in a relationship in the nature of marriage)
• don't have a partner or have lost the support of their partner
• are 18 or over (or 16-17 if they were legally married or in a civil union).

They must also:

• be a New Zealand citizen or permanent resident
• have lived in New Zealand for at least two years at any one time since becoming a New Zealand citizen or resident (unless a refugee).

What do the part-time work obligations involve?

Under the new part-time work obligations DPB sole parents with children six or over will be required to:

• be available for, and take reasonable steps to obtain, suitable part-time employment
• accept any offer of suitable part-time employment
• attend interviews for suitable part-time employment
• undertake planning for employment
• undertake and participate in employment-related training, work experience and work assessments
• report progress on their compliance with their work obligations as often as required.

How much do people receive on DPB?

The base rate for a sole parent on DPB is $278.04 (after tax) per week.

However, the amount received depends on many factors, including the number of dependent children in a sole parent’s care and where they live - 70% of sole parents also receive additional assistance such as an Accommodation Supplement.

A sole parent, with two dependent children, renting in Auckland on DPB could receive approximately $580 per week including Accommodation Supplement and other allowances.

A sole parent, with two dependent children, renting in the South Island on DPB could receive approximately $500 per week including Accommodation Supplement and other allowances

Important statistics about DPB

• There were 97,000 New Zealanders on DPB for sole parents in February 2010. This is up from 90,000 in February 2009 - an increase of 8 per cent.
• 43,000 sole parents on DPB have a child aged six and over. Over half had one child and 30 per cent had two children.
• Māori make up 38 per cent of DPB sole parents who will be work-tested, while Pacific Island people make up 8 per cent of this group.
• 12,500 DPB who will be work-tested have recent work experience or have completed training.
• New Zealand is one of the few countries in the OECD to have no work expectations for sole parents with children aged under 18 years.
• 15 per cent of sole parents on DPB have been in some paid work during the last year.
• Statistics show the number of sole mothers who work full-time has increased significantly in the last 15 years.
• Sole mother full-time employment rates increased rapidly when work tests were previously introduced for people receiving DPB (1997-2003).

Important statistics about OSCAR

• Out of School Care and Recreation (OSCAR) is the main type of care available for school-age children. At the end of June 2009 there were 11,000 OSCAR subsidies being paid.
• Currently there are approximately 1,400 approved OSCAR programmes and 790 unapproved programmes. Forecast Crown Expenditure for OSCAR assistance grant funding for 2009/10 is $16.5 million.
• Other changes being made will make it easier home-based and small scale providers to become OSCAR approved. Grant funding will be targeted to encourage provision in the areas where it is most needed. This is an additional investment of $4 million over 3 years.