Statement of Intent 2007 - Working Age People
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Paid work is a foundation to the wellbeing of New Zealand families – young and old. Economically healthy families, families that are productive, have high self-esteem and strong connections with their communities. Getting people into work is vital to achieving the economic growth required to provide resources for those in need and for the health, education and social services we desire.
All working age New Zealanders who can work should have the opportunity to do so. Some will need additional support, such as access to help with childcare. Those who can work – but not right now – need help to plan their path towards future employment so they are well equipped when their circumstances allow them to join or rejoin the workforce.
Our 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
On average, paid work directly accounts for about two-thirds of the income of New Zealand households. For most households the proportion is substantially greater. The financial security provided by paid work not only ensures a person’s wellbeing while they are working. Many retired New Zealanders support their current standard of living with savings made during their working life.
Paid work offers people more than simply a means to address material needs and comfort. Work can provide a sense of satisfaction and self-worth. Through social contact, paid work can build a person’s sense of belonging and personal identity. For many New Zealanders, much of their social contact is work-related and is a strong component of their wellbeing.
On the other hand, being out of the workforce can isolate people and cause them to lose self-confidence. Unemployed New Zealanders are more likely to experience poorer mental and physical health and be less satisfied with their lives.
Over the last eight years the New Zealand economy has strengthened and our labour market has tightened. This has changed the needs and expectations of our clients and New Zealand employers giving us the opportunity to change how we work with clients.
What we do
- provide employment, training and development opportunities, coupled with benefits and entitlements
- administer student loans, student allowances and scholarships and the Community Services Card
- provide policy advice on social assistance, labour market participation, skills, training and student support
- research and evaluate significant social assistance and employment initiatives
- protect the integrity of the benefit system by preventing and reducing benefit fraud and debt.
Current trends
New Zealand is enjoying sustained growth. At 3.7 per cent as at December 2006, we continue to have one of the lowest rates of unemployment of Organisation for Economic Co-operation and Development countries.
The number of working age people receiving a benefit has declined over the last seven years. In December 1999, there were 401,415 working aged people receiving a benefit. In March 2007, this number had declined to 265,747. A rapid reduction in Unemployment Benefit numbers has driven the decrease – falling from over 160,000 in December 1999 to less than 30,000 today. Unemployment Benefit recipients are now a relatively small percentage of the total working age people population that we work with. The majority of people on a benefit are now receiving a non-work tested benefit and often face significant barriers to employment.
The number of people receiving the Domestic Purposes Benefit – Sole Parent (DPB-SP) is the lowest in over a decade. Although DPB-SP numbers are declining, the simultaneous rapid reduction in Unemployment Benefit numbers means that the DPB-SP group now makes up the largest benefit group overall. As at the end of March 2007 there were 88,508 DPB-SP recipients, down 18,169 over the last 10 years. In addition to the effectiveness of a variety of interventions we administer, the decline appears to be due to the continued strength of the labour market and perhaps the changing patterns in childbirth for those aged under 35. In 2002, the Government introduced enhanced case management to encourage people receiving the DPB and Widow’s Benefit to participate in a process that promoted goal setting and planning for the time when they are ready and able to work.
In 2004, the Government introduced the Working for Families package, to make it financially easier to work and raise a family. The package introduced an in-work tax credit in April 2006, which helps to ensure that work pays more than the benefit for sole parents working more than 20 hours a week.
The number of people receiving Sickness Benefit or Invalid’s Benefit has continued to increase over the years, although the rate of increase is less than a few years ago. As at the end of March 2007, there were 47,862 people receiving Sickness Benefit and 76,619 receiving Invalid’s Benefit. People are eligible for these benefits for a number of health or disability reasons. Mental health conditions such as stress or depression, now account for 25 per cent of people on a Sickness Benefit.
How the Ministry improves outcomes for working aged people
| What we are trying to achieve | How we do it |
|---|---|
| Working age people to be in sustainable employment and be better off financially. |
We do this by:
|
| People to make informed study choices. | We do this by providing information on financing tertiary studies through On Course and StudyWise. |
| People to receive the right assistance at the right time. |
We do this by:
|
| Disabled people and those with ill health to have the same opportunities, choices, responsibilities and rights as other New Zealanders. |
We do this by:
|
| People to be supported to access health services. | We do this by administering the Community Services Card on behalf of the Ministry of Health. |
| Working age people prepared for retirement. | We do this by working with the Retirement Commissioner. |
| People to increase their financial independence and make sure debt is not a problem. | We do this by implementing a debt management strategy to prevent and minimise debt, and reduce barriers to sustainable employment. |
Over the next three years…
We will support more New Zealanders to get into or to stay in work and advance in their employment prospects
Getting New Zealanders into paid work is vital to the Government’s priority of economic transformation.
To ensure that all New Zealanders have the opportunity to share in our economic prosperity, we need to continue helping unemployed people into work. Also, many sole parents and people with ill-health or disabilities, want to work and can do so, with the right support.
The design and delivery of our social support system has lacked a consistent work focus. Sometimes this acts as a barrier for people to take part in the labour market. We have begun introducing changes that provide people with the services, support and encouragement they need to work if they can. The changes are about support. They are not about compelling sole parents and people with ill-health or disabilities to take up work. However, generally, these groups will be expected to undertake work-related activities to prepare for work in the future. We will support this expectation with services, and employment and training programmes.
The main vehicle for these changes is the New Service Approach within the Work and Income service. We have implemented this approach to improve service delivery and focus on work from our first contact with a person. Their personal circumstances and need for assistance to get work drives their access to employment services, rather than the benefit they may be eligible to receive. This allows us to better provide people with the right services. The approach uses seminars to help inform clients - both those able to work now and for others who can work in the future. It also provides earlier access to work brokerage services and employment programmes. The New Service Approach has been operating nationwide since May 2006.
We are also improving the work focus of our service through introducing an efficient Job Search Service, a 13-week service that aims to get people able to work back into employment as quickly as possible.
We will provide enhanced job search support
Our Job Search Service is a key part of the New Service Approach. It is designed predominantly for clients most ready to work, such as those receiving a work-tested benefit. However, non-traditional job-seeking clients such as those receiving Sickness and Invalid’s and sole parent benefits may also participate.
The Job Search Service recognises that many people who are work ready can move quickly into work through job search activity and support, without the immediate need for one-on-one case management. Clients can join in one or a combination of group-facilitated activities during the 13-week programme.
Throughout, we maintain regular contact with clients either through the Work and Income contact centre or through participation in structured job search activities to ensure that they remain engaged and are proactive in their job search. We also assess their progress and needs at six and 12 weeks, where, if needed, we apply more intensive one-on-one case management.
Other initiatives support this service. Industry Partnerships help us to identify specific employment needs. The Transition to Work Grant as well as Working for Families entitlements help people access the financial support they need to move into and stay in work.
Clients who are not ready to work may be assigned to another support stream including:
- Work Development Support–mostly Domestic Purposes, Sickness, Invalid’s and Widows Benefit clients
- Community Support, which includes people on Domestic Purposes Benefit: Care of Sick or Infirm.
Clients in these support streams will receive more intensive one-on-one case management. However, at any stage, they can choose to participate in the Work Support services.
The Job Search Service is now available in all Work and Income service centres. We expect it to contribute to our high-level sustainable employment measures of:
- 35 per cent of job seekers receiving a benefit exit into employment
- 36 per cent of job seekers receiving a benefit for six months or more exit into employment
- 58 per cent of jobseekers who exited into employment worked continuously for six months.
We will assess the success of the Job Search Services as part of our overall evaluation of Working New Zealand: Work Focused Support. The evaluation will support service design development and will help us monitor and understand the implementation and the outcomes achieved.
We will enhance our case management
Over the next three years we will continue to provide a more intensive, one-on-one case management for Work Development Support and Community Support stream clients. Enhanced case management and the Working for Families package that reduces barriers to employment are already helping more Domestic Purposes Benefit clients into employment.
Sole parents will be offered the opportunity to participate in the Job Search Service. We are developing services to support sole parents exiting into work and ensuring access to the in-work family tax credit and childcare provisions. We will promote sole parent placements through Industry Partnerships and will look closely at the need for post placement support to help sole parents stay in work and manage child rearing at the same time.
We recognise that some people such as people on Invalid’s Benefit with severe disability or ill-health are unable to work and we will exempt them from planning and activity requirements.
For people with ill-health and disabilities we will engage specialist health advisors, disability advisors and employment co-ordinators. We will also work closely with other agencies involved in the provision of disability and social support services to provide additional health and disability services. The focus will be on services that will help people gain, retain or resume employment. Over time we will build up our knowledge of the range of health and disability services that are most effective in helping people with ill-health or disabilities move into and stay in work.
We will improve education and training programme support
We are introducing improvements to a number of employment and training programmes for Work and Income clients. The improvements seek to address gaps, remove duplication, lift responsiveness and broaden our reach to people, based on their individual need rather than the benefit they receive.
Phase one of our improvement programme will focus on:
- Training Incentive Allowance - which helps with the financial costs of training and skills development for courses meeting quality and relevance standards.
- Course Participation Assistance Grant - which helps clients into short-term employment and training. Assistance for costs such as transport, childcare of up to $1,000 is available over 52 weeks.
- Wage subsidies will be reduced to just two:
- Skills investment subsidy - available for 52 weeks to job seekers who are further from sustainable employment
- Time-limited project subsidy - for project-based work of less than six months, for example, Taskforce Green.
- Transition to Work - we plan to replace current programmes such as the Work Start Grant and Pathways Payment with more flexible assistance. This will see assistance of up to $1,500 per year to help with job-search costs and other costs of entering employment.
- Work Experience - we will improve access to this programme and increase its effectiveness by changing the maximum period to four weeks, with a maximum of five days per week for 40 hours a week.
- Activity in the Community - we will make this available only to non-work tested clients or those exempt from engaging in job seeking and planning activities.
Through these changes, Work and Income will be better able to work with clients ‘at risk’ of becoming long-term unemployed and reduce that risk at the earliest possible point.
We will strengthen our relationships with our service delivery partners
We are working together with Inland Revenue and the Ministry of Education to develop shared outcomes for tertiary student support. This includes looking for ways in which the three agencies can provide more seamless services to common clients.
We will manage clients’ benefit debt problems
We are changing the way we manage clients’ benefit debt. Our emphasis is on preventing it from occurring in the first place, by:
- advising clients what they need to tell us and when
- making it easier for clients to tell us what we need to know
- making sure we do things right for clients the first time
- providing clients with good advice when they ask for extra monetary assistance
- determining the risk factors associated with multiple debts.
We will support students to succeed in tertiary education
The many tertiary education options available to students make it important that they choose wisely when considering what they will study and how they will fund it. We want students to successfully complete their studies incurring minimal debt. Their course choices need to reflect their goals and aspirations. At the same time they need to get value for money in terms of the financial investment they are making in their education.
StudyLink will contribute to these outcomes by:
- making sure students can easily get the assistance they are entitled to
- providing the advice and support students need to make good decisions about their study and the best way to fund their studies
- working with other agencies where the desired outcomes are complementary.
To make these things happen StudyLink will:
- Introduce new web-based services over the next three years. Students will be able to view and update their personal information online and use web tools to help them work out their eligibility and make decisions about their study and finances.
- Enhance our On Course and StudyWise programmes. These target information and advice at secondary school students and Student Loan applicants to help them make wise decisions about their study and borrowing.
- Introduce new targeted services (including On Course information) to better support clients who are moving from a benefit into tertiary study.
- Introduce enhancements to Step-Up scholarships from 2008. This will expand the volume of new awards and increase access opportunities for students who are underrepresented at degree level.
- Introduce changes to improve the delivery of TeachNZ scholarships.
- Streamline the processes we have with education providers to deliver scholarships to their students.
- Develop more joined-up services with other agencies, such as Career Services and Inland Revenue, where their services are complementary.
How we will measure cost-effectiveness
Our outcomes for working age people focus on people accessing sustainable employment and receiving timely assistance to prevent undue hardship. These two outcomes are closely related. Our effectiveness in moving people into sustainable employment will reduce the numbers requiring social assistance support.
Sustainable employment
In 2006/2007 the Ministry will spend approximately $250 million on services to help get people into employment.
Our primary focus has been on the effectiveness of our efforts to support sustainable employment outcomes. Our impact on beneficiary numbers and on Crown benefit expenditure offer a high-level measure of effectiveness.
We have begun assessing the cost-effectiveness of programmes such as Work Confidence, Training Opportunities, Community Work Experience, Subsidised Work Experience, Job Search, Hiring Subsidy, and Self-Employment Assistance. The results vary considerably from highly effective to ineffective.
While these programme level assessments are valuable, we need to apply caution in using the results. Many of the programmes have different objectives such as skill development, job placement and employment demand development. Also, most clients receive a mix of services tailored to fit their needs. This makes it difficult to ascribe cost effectiveness to particular programmes or services. Our aim over time is to adjust the mix and refine our programmes and interventions to ensure they are collectively the most effective for our clients and ensure assistance goes to the right people.
Given these constraints we are focusing our measurement of cost effectiveness at the overall appropriation level. In the 2005/2006 year 38,116 people left a benefit and stayed in work for six months or more. If these people had remained on benefit the cost of the benefit would have amounted to around $204 million. We will continue to monitor sustainable employment outcomes during future years in order to determine an appropriate benchmark measure going forward.
We have also implemented programmes to provide opportunities for people to move straight into work without the need to receive a benefit. WRK4U seminars have led to a decline of between 10 per cent and 20 per cent (approximately 12,000) in the number of new applicants. Had these people stayed on benefit for an average of 14 weeks the cost would have been approximately $35 million.
With the introduction of our New Service Approach within Work and Income, we are expanding our focus to include non work-tested clients and non-traditional job seekers such as Domestic Purpose beneficiaries and Sickness and Invalid’s Benefit clients. These clients often suffer higher barriers to returning to work. They require more intensive and more costly one-on-one case management and a wider range of support such as child and after school care, medical intervention or special transport needs to achieve their goals. While greater resources are required to achieve sustainable employment outcomes, these are offset by greater Crown benefit reductions as these clients spend less time on a benefit. We are currently determining the future liabilities for these groups, taking into account average benefit durations and taxation revenue that would be paid in employment.
Students
Our outcomes for students focus on ensuring that they make successful study choices, including the best way to fund their study, successfully complete their study and make successful transitions from study to quality work.
The Ministry of Education, the Tertiary Education Commission, Inland Revenue and the Ministry all have interests in student outcomes with each agency having leverage at different stages of the process. We have a significant role in ensuring that students make good decisions about their financial investment in study from the start. During the coming year we will liaise with partner agencies to determine whether a joint outcomes approach can be developed. This will involve identifying the range of resources that are being committed to the outcomes and then looking at how we might measure overall effectiveness.
Monitoring progress
| Indicators – working age people receiving income support | ||
|---|---|---|
| Indicator | Current | Trend |
| Percentage of total population aged 18-64 receiving an income-tested benefit | 10.9% (2006) |
Declining |
| Percentage of Ma-ori population aged 18-64 receiving an income-tested benefit | 24.6% (2006) |
Declining |
| Percentage of Pacific peoples aged 18-64 receiving an income-tested benefit | 14.7% (2006) |
Declining |
| Percentage of population aged 18-64 whose current spell on benefit has lasted for two years or more | 5.8% (2006) |
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 population aged 15-64 employed (all ethnic groups) | 75.2% (2006) |
Increasing |
| Percentage of population aged 15-64 employed (Ma-ori) | 64.6% (2006) |
Increasing |
| Percentage of population aged 15-64 employed (Pacific) | 61.6% (2006) |
Steady |
| Percentage of unemployed people who had been unemployed for six months or longer | 20.1% (2006) |
Declining |
| Source: Statistics New Zealand, Household Labour Force Survey, annual average for year ended December. | ||
