Statement of Intent 2006 - Working Age People

High Level Outcome

People achieve economic independence throughout their working lives. They are able to participate in and contribute to society and have a sense of belonging.

Context

Jobs and families – young and old, are central to the lives of working age people. Getting people working and lifting productivity are central to achieving economic growth, eliminating poverty and improving social outcomes. Helping people into work and building the skills our workforce offers the economy are critical to ensuring that New Zealand can accommodate our ageing population, provide protection for those in need, and afford the health, education and social services we desire.

Through the Ministry the Government is seeking to build the skills and opportunities of the working age New Zealander. To do this we need to:

• provide enhanced work focused services to a broader range of clients
• continue developing and implementing employer and industry focused employment services
• modernise the working age benefit system to build the capacity of all who can participate in work, while protecting those who genuinely cannot work
• ensure parents can access effective paid parental leave arrangements, targeted income support, and high quality and flexible childcare and education services.

New Zealand Trends In Employment And Unemployment

Since the 1990s, participation in the labour force has been increasing for all groups. Some groups still have lower-than-average labour market participation rates, (particularly, young people, people aged 60-65, women, Pacific peoples, recent migrants and, to a lesser extent, Maori), and some of these groups have experienced faster growth in participation than other groups in recent years.

New Zealand has enjoyed a sustained period of strong economic growth, well above the OECD average, although growth is forecast to be slower over the next two to three years. At 3.6%, New Zealand’s unemployment rate to the end of December 2005 continues to be one of the lowest in the OECD.

Our Working Age Client Base

In March 2006, New Zealand had 283,584 working age clients (aged 18-64 years) who were receiving an income-tested benefit. The largest groups of beneficiaries are now sole parents and people with ill health or a disability. The reduction in numbers of Unemployment Benefit clients is enabling us to target more of our resources towards these other groups, who have not traditionally been the focus of our employment services.

The Ministry’s active work-focused services play a key role in reducing the number of clients receiving an Unemployment Benefit.

The number of working age Sickness and Invalid’s Benefit clients has been increasing since the mid 1990s. In March 2006, 120,473 working age people were receiving a Sickness or Invalid’s Benefit, compared with 116,075 in March 2005. We are continuing to work on our Sickness and Invalid’s Benefit Strategy, which aims to broaden the services provided to this client group and support those people who want to work to move towards employment.

The number of clients receiving a Domestic Purpose Benefit has decreased over the last eight years, after peaking at 114,665 in March 1998. In March 2006, figures show that 103,362 working age clients were receiving a Domestic Purposes Benefit (including Emergency Maintenance Allowance).

For clients who have the sole care of children, our approach includes exploring childcare options that take into account the ages and care needs of the children making employment more accessible and preparing for work as circumstances allow.

This year, the In-Work Payment will be available to assist sole parents and couples to raise their living standards.

Our Role

To provide security and opportunity for our working age clients, the Ministry provides:

• policy advice on social assistance, labour market participation, skills and training and student support
• research and evaluation on significant social assistance and employment initiatives
• employment, training and development opportunities, coupled with benefits and entitlements
• services to administer Student Loans and Student Allowances and the Community Services Card
• services to protect the integrity of the benefit system by preventing and reducing benefit fraud and debt.

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Our focus for the next three years

We are committed to reducing the number of working age people who need to rely on a benefit, as a means of improving economic independence and social wellbeing. Our social development approach means that on behalf of Government, we provide working age people with services that help them enter and stay in sustainable employment. This may be by providing social protection, in the form of benefits and entitlements until they are employed and assistance whilst in employment.

Core Benefit Reforms
The Core Benefit is currently being developed as part of the reforms to create a modern, flexible work focused social security system which helps people find work and remain in work where possible, and provides security for those unable to work. Key components, such as our enhanced, work focused service approach, will be rolled out as they are finalised. The Core Benefit will replace the current seven benefits for working age people with one benefit and one set of criteria. This will mean that Case Managers will be able to assist more working age New Zealanders dependent on benefit to achieve better employment outcomes. The implementation of Core benefit is expected to occur in 2007/2008.

Enhanced, Work Focused Approach
The number of working age people receiving an income tested benefit has decreased by 21% in the last five years. Our focus on helping the unemployed into work has changed the make-up of the working age beneficiary population. The new enhanced work-focused services approach involves making work-focused services available to a broader range of beneficiaries, which will help more people into work. It opens up our employment services to other client groups in addition to those receiving an Unemployment Benefit.

Instead of services and opportunities being driven by benefit type or category, the enhanced service focuses on the individual and builds services around the outcome that a person can achieve.

The starting point for the assessment of all working age clients will be to identify achievable goals for the client, always taking into account whether full-time or part-time employment is possible now or in the future with the right support.

For those where employment is a realistic option, the first step will be to match the client to employment opportunities, to help them get a job. These opportunities will include information about the local labour market, benefit eligibility and responsibilities and will be available regardless of a person’s benefit type.

The Right Job At The Right Time, Right From The Start
Our aim is to get people into the right job at the right time, right from the start, reducing their need to apply for a benefit where possible. We know that for working age people on a benefit, some can be more readily assisted toward economic independence than others. Focusing on those we know we can help delivers a return to them and their families in the form of better outcomes over time, and a return to Government through less demand for benefits. It also enables us to focus on the needs of others who require higher levels of assistance or who may never be fully self-reliant.

Work for You (WRK4U) seminars are designed for job seekers and reinforce the message that work is available and should be considered ahead of benefit payments. The seminars provide information on local labour market opportunities and practical help to get work.

The enhanced work-focused services approach supports active case management which enables us to assess a client’s work needs immediately and help them move into employment more quickly.

Work For Those Who Can, Security For Those Who Can’t
The ability to participate in paid employment is the key means through which people can improve their overall quality of life. However, for those who are caring for children, employment decisions must be balanced against other family considerations and needs.

The Government’s Working for Families package targets resources for low- to moderate–income families with children, with a particular emphasis on supporting movement from benefit into work. The package is being delivered by Work and Income and the Inland Revenue Department and includes:

• a new In-Work Payment for working families with children
• increased help with childcare costs for pre-school and out-of-school care
• increased Family Support (a component of Family Assistance)
• increased Accommodation Supplement for more working families and many people without children to make housing more affordable.

The combined effect of all the Working for Families changes to Family Assistance is an estimated average gain of $64 per week in Family Assistance to around 350,000 families from 1 April 2006. This is estimated to represent over three quarters of all families.

Planning For Work As Circumstances Allow
The current benefit system groups working age clients into three broad categories: unemployment, ill health or disability, and sole parents and widows. Sole parents, and Sickness and Invalid beneficiaries are not always ready to move into work straight away.

The implementation of the Core Benefit for these clients means that we will need to work on the following:

• enhancing employment services for people currently on the Sickness and Invalid’s Benefit
• intensive work-readiness training for long-term unemployed clients
• providing employment services for all clients unemployed for three years or more
• working with Domestic Purposes Benefit clients to plan for their return to work as their parenting responsibilities allow
• providing financial security for clients through the timely and accurate payment of benefits and entitlements.

Initiatives such as the Working for Families package will help remove financial barriers to employment, while clients who are unable to work will continue to receive social support services that enhance their participation in communities, as well as their quality of life.

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Seeing results

Working age people are a large and diverse client group and we need a range of measures to identify how well we are achieving our high-level outcome. The results we want to see from our work are that:

• job seekers achieve sustainable employment
• all our working age clients (working age students, beneficiaries, and working people) get the financial support they are entitled to
• our clients are aware of all their entitlements, including entitlements while working and leading up to and during retirement
• benefit fraud is prevented and/or detected early
• the debts of beneficiaries and former beneficiaries are minimised, and their debts are managed accordingly.

Each of our contributing outcomes is about achieving these results, and ultimately achieving our high-level outcome. As with all our outcomes, the contributing outcomes overlap and support each other.

Working age people are able to work and achieve economic independence through sustainable employment

For most working age people, employment is the path to economic independence and plays a central role in promoting self-esteem and social connectedness. Our services are about getting people into employment and helping them stay in employment for longer periods of time.

Our implementation of the Government’s Working for Families package helps low- and middle-income parents stay in employment by removing financial barriers to work and by providing more help, such as childcare assistance.

The introduction of the Government’s Core Benefit will remove layers of administrative detail from the benefit system, enabling case managers to provide active employment support while still ensuring clients receive their entitlements.

As a Ministry, we are keen to follow international best practice, and also share our experiences in social development with our overseas counterparts.

A good example of how we are being recognised overseas is:

The OECD Employment Outlook 2005 report
The OCED profiled some of the work we do in a report, referring to New Zealand as a ‘labour market success story’. The report recognised that the Ministry has taken our activation programmes to international best practice standards. Some of the successes discussed in the report include:

• WRK4U (Work for you) seminars for potential clients that reinforce the message that work is available, and should be considered ahead of benefit payments.
• JPI (Jobs Partnership Industry), where the Ministry has developed employment partnerships and programmes that will fill skill shortages and ensure that training leads to real work.

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Encourage and enable participation in tertiary education that leads to successful educational outcomes and sustainable employment while minimising debt

Tertiary education and industry training play a crucial role in equipping people with skills and knowledge. Education and training can be seen as a way to enhance a client’s employment prospects and lifetime earnings.

To assist students with their decision making, our StudyLink service line provides an information and advisory service through StudyWise. This service offers students advice on study choices and how to finance their studies so that they only borrow what they need. The service is available to all students, whether they be students transitioning from school to tertiary education or working age people undertaking tertiary study later in life.

Scholarships For Tertiary Students
StudyLink administers a range of scholarships that provide financial support for tertiary students while studying. The scholarships aim to improve participation by low income students and to retain more skilled graduates in New Zealand.

We administer the following scholarships, each aimed at a different group of students:

• Step-Up Scholarships
• Bonded Merit Scholarships
• Teach NZ Scholarships
• NZ Scholarship and NQF/NCEA Awards.

Working age people unable to achieve economic independence have adequate income, the opportunity to engage in paid work, and are able to participate in the life of their communities

Social protection is about supporting people in times of need. Social investment addresses the causes that lead to the need for social protection. Social investment is emphasised as the pathway to employment, economic independence and social participation.

We will continue to be active in supporting employment opportunities for job seekers. We are enhancing employment services for Sickness and Invalid’s Benefit clients by combining tailored case management, employment programmes and access to health services to support clients into full-time, part-time or temporary work. Many people receiving these benefits are able to work but need increased support so that they can hold down jobs while still being able to manage their health or disability.

We are placing more people with mental health disabilities into employment by working more closely with and supporting their employers. Over the next couple of years, we will continue to implement, evaluate and refine the enhanced, work-focused services for Sickness and Invalid’s beneficiaries.

We will continue to provide enhanced case management and personal planning for Domestic Purposes Benefit clients, to sustain the progress we have seen in these clients moving off a benefit into employment as their circumstances allow.

People are supported to access health services for themselves and their families where barriers arising from cost, income and other circumstances are high

Access to health services is important for a person’s wellbeing and for their ability to participate in their community, and to enter and stay in employment. Providing access to health solutions is part of our holistic approach to social development.

PATHS (Providing Access to Health Solutions) is a unique programme that brings together regional public health, community mental health and welfare networks to work in partnership to help reduce or remove health barriers to employment for people receiving a Sickness or Invalid’s benefit. The programme works intensively with participants to develop individual plans to reduce these barriers, with interventions that may involve clinical treatments or social supports – anything that can effectively remove or reduce the barrier. We will continue to implement PATHS in five regions (South Auckland, Western Bay of Plenty, Taranaki, Wellington and Canterbury).

The Community Services Card continues to provide low-income individuals and their families with access to subsidised primary health care. The card helps around one million New Zealanders access affordable health services.

On 1 April 2006, the income thresholds for Community Services Card holders were increased. The thresholds have been adjusted to take into account the change in income levels due to the Working for Families changes that also took effect on 1 April. No card holders will lose their entitlement to the card as a result of the increase in their benefit or the Working for Families package. The increase in the thresholds means that some New Zealanders who have not previously been entitled to a card are now eligible for one.

Working age people are prepared for a successful transition to retirement

In order for people to prepare for a successful transition to retirement, they need to be provided with information that will enable them to make sound decisions about savings and future work / life balance.

The Ministry provides information to people who receive New Zealand Superannuation and associated benefits such as:

• entitlement to New Zealand Superannuation regardless of where superannuitants choose to retire
• payment of War Disablement Pensions and related allowances
• payment of Veteran’s Pensions and concessions.

We aim to help people make sound decisions about their retirement, based on a good understanding of the assistance and services available.

People receive their correct entitlement to social security assistance

Preventing and minimising errors, abuse, fraud and debt are essential to maintaining the integrity of the benefit system. The overall integrity of our system of social assistance relies on three equally important components, each with strong elements of prevention and active client management:

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Research and evaluation

Our research and evaluation work provides the evidence base that tells us “what works” to improve social outcomes, and informs the development of our policy and delivery.

Stable and adequate income and the ability to participate in society are strong bases on which to build an inclusive and prosperous New Zealand. On behalf of the Government, the Ministry invests in working age people to support these goals by fostering sustainable employment and providing social assistance policies as a safety net to protect people in hard times.

We pilot new solutions to improve outcomes and we evaluate our services as we implement them, and we adjust our delivery according to what works.

Significant research and evaluation projects over the next three years include the following:

Working For Families
Our real-time evaluation of Working for Families is comprehensive. The first phase of the evaluation has focused on the implementation and delivery of the programme as a whole. The first phase has also considered some components of the programme such as:

• whether people are receiving the assistance to which they are entitled and
• the factors that prevent and/or encourage people to apply for the assistance to which they are entitled.

The second phase of the evaluation will study the effect of Working for Families on employment-related decisions, particularly among second earners in families. It will also measure the programme effects on income, poverty and living standards, especially for lower- to middle-income families with dependent children.

The evaluation will enable us to understand more about those who benefit from the Working for Families package and better inform policy with new information in the areas of service delivery, changing family composition, employment hours, housing costs, and access to and use of childcare.

Social Assistance Reforms
We are planning to run an evaluation of the social assistance benefit reforms. The evaluation will examine changes to the provision of income support, eg the introduction of a Core Benefit and amendments to ill health and disability-related assistance, employment assistance strengthening work expectations, and the development and national roll-out of the new service delivery model.

The evaluation will cover two key areas:

• the implementation and ongoing operation of the benefit reform
• outcomes of these changes.

The evaluation will examine changes to the provision of income support, including second-tier disability-related assistance, employment assistance to strengthen work expectations of clients, and the development national roll-out of the new service delivery model.

Jobs Jolt
The Jobs Jolt evaluation has focused on the implementation and operation of the Jobs Jolt initiatives and the outcomes and impact of the package. The evaluation has been conducted in “real time” and has provided useful information on the initiatives as they were being implemented and bedded in. The evaluation has also provided useful input to the development of other projects, such as the social assistance reforms.

The Jobs Jolt evaluation is currently focusing on assessing the outcomes and impact of the Jobs Jolt package over the intended lifespan of the package.

National Survey Of Debtors And Non-Debtors
This work will enable us to increase our understanding of why some low-income people have debts and others do not, to describe their circumstances and background, and to examine the differences between those who appear to be managing their debts and those who are struggling. The findings are intended to improve government services offered to people with low incomes, or who are in debt or at risk of acquiring debt, and inform policy development to the main state agencies to which New Zealanders are in debt. These include the Ministry of Social Development, the Inland Revenue Department, the Housing New Zealand Corporation and the Ministry of Justice.

Client Clustering Research
Client Clustering Research seeks to group Sickness and Invalid’s Benefit clients into meaningful clusters based on the nature and duration of their benefit receipt, their past and current attachment to the labour market and their pathways onto and off Sickness and Invalid’s benefits.

Future research will extend the clustering work to those who receive other benefits, in the first instance recipients of the Domestic Purposes Benefit. Ongoing work will focus on potential outcomes and barriers to employment and gathering evidence about which approaches work best for which clients.

Domestic Purposes And Widow’s Benefit Reforms
Evaluation of the 2002/2003 Domestic Purposes and Widow’s Benefit reforms provides comprehensive information on the implementation of the reforms. This helps Work and Income to better target their interventions.

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Managing our capabilities

Managing our capability in policy and delivery will support us to achieve our contributing outcomes and our high-level outcome for working age people.

Work focused case management involves supporting clients to prepare for work, helping them get into the right job right from the start, and providing support once they are in employment. It means focusing primarily on the client’s abilities, rather than their barriers to work, identifying and meeting local labour market requirements, and supporting good practice for frontline staff.

To support the implementation and development of this work, we will:

• strengthen our understanding of client needs and requirements and meet these with more flexible client-driven services
• provide information and promote choices that will impact on longer term opportunities and wellbeing as part of our social investment strategies (e.g. retirement planning, reducing student debt)
• develop our capability to work more effectively with clients that have high and complex needs, by working collaboratively with other agencies
• develop a new assessment process, including an automated assessment and job matching tool for frontline staff, clients and employers
• increase our knowledge of the local labour market, matching training courses to local requirements and building relationships with industry and employers.

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Monitoring progress

Outcome indicators

INDICATORS – WORKING AGE PEOPLE RECEIVING INCOME SUPPORT
Indicator	Current	Trend
Percentage of total population aged 18-64 receiving an income-tested benefit	11.5% (2005)	Declining
Percentage of Maori population aged 18-64 receiving an income-tested benefit	26% (2005)	Declining
Percentage of Pacific peoples aged 18-64 receiving an income-tested benefit	15.5% (2005)	Declining
Percentage of population aged 18-64 whose current period on a benefit has lasted for two years or more	6% (2005)	Declining

Sources: Statistics New Zealand, population estimates and Pacific population projections; Ministry of Social Development, SWIFTT

INDICATORS – WORKING AGE PEOPLE - EMPLOYMENT
Indicator	Current	Trend
Percentage of total population aged 15-64 employed	74.6% (2005)	Increasing
Percentage of Maori population aged 15-64 employed	63.8% (2005)	Increasing
Percentage of Pacific peoples aged 15-64 employed	61.8% (2005)	Increasing
Percentage of unemployed people who had been unemployed for six months or longer	21.8% (2005)	Declining

Source: Statistics New Zealand, Household Labour Force Survey, annual average for year ended December

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