Simplified benefit system roll-out begins in May

22 February 2005 For Immediate Release

Hon Steve Maharey Minister for Social Development and Employment

Work to implement a simpler, fairer benefit system will begin in May this year, Social Development and Employment Minister Steve Maharey announced today.
"A single core benefit and enhanced employment services will replace the current raft of benefits, rules and entitlements," Steve Maharey said.

"The change to a single benefit, with one set of criteria, will dramatically reduce the time spent on administration, allowing case managers to focus more on moving people from dependency to work.

"From May this year the new service delivery model will be piloted in eleven centres around the country. Legislation for a single core benefit will be drafted and introduced this year.

"This is a system designed to meets the needs of the 21st century. We will see fewer rules, but more sophisticated assessments and services tailored to individuals."

Key features of the new system include:

• A single core benefit with one set of rates and one set of eligibility criteria
  Add-ons to support people with higher costs because of things like accommodation, childcare, or disability.
• An enhanced employment service with two distinct streams:
  • The rapid return to fulltime work stream for people who are ready and able to work and need the right services to get them there. Also included will be people for whom a return to work will take slightly longer, for example, people in work-focused training, or who are temporarily unable to work for health reasons.
  • The work, development and preparation stream for people who need a more gradual transition to full-time work, or for whom part-time or intermittent work is a realistic long-term option. People in this stream will have work-focused requirements, such as planning and assessment, to help them return to work as circumstances allow.

"No one will be financially worse off as a result of these changes. The focus is on better services to help even more people back into work. People who are unable to work because of serious health problems or disabilities will continue to be exempt from any work expectations."

Steve Maharey said the changes were a world first and would be the most significant reforms of New Zealand's welfare system since 1938.

"With unemployment at record lows and a strong labour market there has never been a better time to refocus the benefit system. These changes will help meet the challenge of filling the jobs created by a growing economy."

Contact: Daniel Lambert, Press Secretary, (04) 471 9154 or (021) 270 9115.

 

Questions and Answers

Comming up:

• April 2005 - Decisions on new service model.
• May 2005 - Trial parts of new service model in 11 areas.
• July  2005 -  Single core benifit policy decisions.
• December 2005 - Further decisions - single core benefit, new service model.

2005 - Legislation.

2006 - Roll out new service model.

2006 / 2007 - Implementation.

 

Why are we making the changes?
We need a social security system that taps into the potential of New Zealand’s beneficiary population. At 3.6%, New Zealand can now boast the lowest unemployment rate in the OECD. The challenge is no longer finding jobs for the workers, it is providing workers for the jobs.

We need a system that:

• Recognises the diversity of people’s lives and circumstances
• Provides tailored, flexible services to support people to return to work
• Matches services to the client rather than clients to the services
• Has fewer rules and a clearer work focus for those that can work.

 

What will change?

We will change the way we deliver services to assist people on working age benefits back to work. No one will be worse off financially as a result of these changes.
The complex raft of working age benefits (seven main benefits in total) will be replaced with a single core benefit with one set of rates and eligibility criteria. Add-ons will continue to support people with higher costs because of things like accommodation, childcare or disability.
The single core benefit will have two streams: a rapid return to full-time work, or work, development and preparation.

 Rapid return

Most clients coming on to a benefit will be in the rapid return to full-time work stream. These are the people who are ready to work, able to work, and just need the right services to get them there. Also included in this stream are people for whom a return to work will take slightly longer. This includes people, for example, in work-focused training or who are temporarily unable to work for health reasons.

 Work, development and preparation

The work, development and employment stream is for people who need a more gradual, transition to full-time work, or for whom part-time or intermittent work is a more realistic long-term option. Some people can only work part-time or intermittently, and the system needs to cater for that.
People in this stream will have work focused requirements, such as planning and assessment, to help them return to work as their circumstances allow. People who have such serious health problems or disabilities that it would be difficult for them to consider work at all will continue to be exempt from any work expectations, but we will link them to available support services.

A single core benefit will deliver on many fronts:

• It will prevent people being labelled or pigeon-holed by the type of benefit they receive, putting the focus on the person, their aspirations and how we can tailor support to them.
• It will remove the tangle of rules and entitlements that has become a barrier to people moving into work, whilst ensuring that we maintain financial security for those cannot.
• It will free up case managers’ time so that they can give clients active support to move into work.

 

What will it mean for clients?

The service and benefit changes are about building the kind of support that makes work possible and attractive. Work and Income will talk with clients about their circumstances and what type of assistance they need. Case managers will also link people who are unable to work at all to appropriate support services. The single core benefit will be easier to understand than the current range of benefits. No one will be financially worse off as a result of these changes.

What will it mean for employers?

We expect more people to move off benefit and into work and fewer people to come on to benefit. The reforms will therefore help employers fill vacancies, allow firms to expand and support economic growth. We will work closely with employers to identify their needs and to place and retain people in work. Employment programmes will be more flexible and responsive to employers’ needs and regional circumstances.

What are the next steps?

Work towards implementing the new service will begin in May this year when trials of the New Service Model are rolled out in 11 sites. Legislation for a Single Core Benefit will be drafted and introduced this year.
The New Service Model will be rolled out from 2006. The Single Core Benefit will come into effect from 2007/2008.
We will be talking to key stakeholders both nationally and regionally over the next few months.