Statement of Intent - Outcomes for Working age people

Government priority

Protect people from the worst effects of the recession and minimise unemployment.

Outcome

• People get into or stay in work and for those not ready for work advance their employment prospects.

To achieve this we will:

•  work on the system to improve incentives to work
•  provide enhanced job search
• work with employers and industries to develop tailored solutions to their workforce needs
• support students to make good financial choices in tertiary education
•  enable more disabled people to get work.

Departmental output expenses that contribute

Vote Social Development

• Collection of Balances Owed by Former Clients and Non-beneficiaries
• Management of Student Support
  - Output: Student Allowances
  - Output: Student Loans
  - Output: Administration of Grants and Scholarships
• Policy Advice and Support to Ministers (MCOA)
• Social Policy Advice Output Class
  - Output: Ministerial Servicing
  - Output: Social Services Policy Advice
  - Output: Strategic Social Policy Advice
  Crown Entity Monitoring Output Class
• Services to Protect the Integrity of the Benefit System
• Tailored Sets of Services to Help People into Work or Achieve Independence
• Vocational Skills Training.

Vote Veterans' Affairs - Social Development

• Processing and Payment of Veterans' Pensions.
  - Output: Processing and Payment of Veterans' Pensions

People get into or stay in work and those not ready for work advance their employment prospects

We know that work is the best way out of poverty. Having a job provides financial security. It builds self confidence and connects people with their communities. It gives people pride and independence.

Our active case management gets more than 30 per cent of the people who come to Work and Income expecting to go on a benefit, a job instead. We do this even in the current tough labour market. For the people who do go on an Unemployment Benefit, we redouble our efforts to get them working again.
If a person loses their job, it's important they find another one quickly. They are more likely to be attractive to employers while their skills are current and they are still confident.

We have been successful in getting more people into work than other countries because when New Zealanders register for a benefit we work with them to address all their barriers to work. Some people need help getting job-ready, including help with everything from interview preparation to sorting out family and housing situations. By acting on clients' needs upfront, we minimise the time out of work and maximise the chances of staying in work.

We have already launched the ReStart and Job Support Schemes in response to the economic downturn. ReStart gives temporary financial help and job search assistance to people immediately after they have been made redundant. The Job Support Scheme will help to reduce the number of employees facing redundancy. The scheme pays an allowance to workers who have agreed to work reduced hours and is available to employers with 50 or more staff.
 
We are here to help people get on with their lives and to be independent. People on Sickness Benefit will be regularly assessed so they can be work-ready as soon as they are well enough. We will continue to support those who, through no fault of their own, are unable to work due to ill health or disability.

This means we have to find job openings to get people into work. Working directly with employers is essential for this. Building stronger relationships with employers will help us to meet their employment needs. We will step up how we work with employers so we can reconnect people with the workforce as quickly as possible.

The next generation of employees needs to be equipped to contribute to the workforce with a minimum of student loan debt. Students will be supported to make informed decisions about the financial aspects of their study options and to manage their loans and allowances.

Over the next three years we will:

• Support people getting over the shock of redundancy through the ReStart package. The package offers temporary financial help and job search assistance to those who need it.
• Help businesses keep their workers employed by growing the Job Support Scheme.
• Identify areas of demand for skills and prepare job-seekers to meet these demands. We will do this by working with nationally significant employers and by working with iwi, Māori and Pacific communities to develop programmes that enhance employment outcomes for Māori and Pacific people, especially youth.
• Meet the needs of our client base by increasing the range of work-focused seminars we offer.
• Match employers and job-seekers by launching online tools for employers to advertise their vacancies. Our extensive database of potential candidates will help employers find a candidate to match their needs.
• Remove the barriers between employers and seasonal workers by creating a seasonal work marketplace.
• Create online facilities for people to update their own details. This will free up frontline staff to work more intensively with clients and their families.
• Provide students with information and online tools so they can make informed decisions about their study and its funding.

We are committed to a benefit system that provides a genuine safety net in times of need and that also has incentives for people to go back to work. With careful consideration for the timing of any policy changes in this weaker labour market we will:

• Require all people who have been receiving an Unemployment Benefit for 12 months or more to reapply for their benefit and undergo a comprehensive work assessment.
• Get the incentives right to get Sickness beneficiaries back into employment as soon as possible. To encourage working, we will require a second medical certificate for Sickness Benefit to be for no longer than four weeks. We will also require a compulsory second opinion medical assessment for those on a Sickness Benefit for a year. We will work with Sickness beneficiaries to get them work-ready as soon as possible.
• Extend part-time work obligations to Domestic Purposes beneficiaries once their youngest child is six years old.
• Increase the amount of money earned before benefits are abated to $100 a week.

How we will show progress

The main impact we have is on reducing the number of people claiming a benefit. We will do this by:

• getting job-seekers straight into work if possible
• working with people on a benefit to reduce their barriers
  to work
• working with employers to help them keep people in work
• working with employers to help them increase employment opportunities
• ensuring that benefits are a last resort.

When the economy is in recession our efforts are vital. People out of work do not pay taxes and often need benefits or other assistance to support their families. We need to move as many people as we can straight into available work. We also need to support employers to hold current employees in work.

The Ministry and the Treasury worked together in 2008 to measure the impact that Work and Income had on employment levels. That work showed that the number of working-age people on a benefit at the end of 2007 would have been at least 7–10 per cent higher without Work and Income services. The Ministry is continuing to monitor the impact of Work and Income services in the context of a weaker economy.

The Job Search Service helps people to make a quick return
to work, often without the need to go onto a benefit. Applicants for benefit attend a Work for You seminar. Of those who attended a seminar in March, 34.4 per cent did not need a benefit within 28 days of attending.

If all the people who go into Work and Income went straight onto a benefit rather than into work, the estimated cost in benefits would be an additional $55 million a year. We would also need to employ an estimated 276 more case managers and fund the extra associated costs.

When people do come onto benefits, our case managers work with them to either place them in work or prepare them for work. In 2007/2008 30,553 people left a benefit and stayed in work for six months or more. If these people had remained on a benefit the cost of the benefit alone would have been $172 million.

During 2008/2009, reductions in the demand for labour have affected our ability to move people off benefits. However, even in this tough environment there are still significant numbers exiting the Unemployment Benefit. In the period from January to March 2009 exits were 66 per cent of new grants, with the actual numbers exiting often above pre-recession exit numbers.

Another way of showing progress in this area is through international comparison. New Zealand is more successful than other comparable OECD countries in placing people into and holding people in work, particularly people from vulnerable groups (long-term unemployed, low-skilled, youth).

We will continue to measure the proportion of applicants who do not go onto a benefit and the number of beneficiaries exiting into work as indicators of our impact in protecting people from the recession and minimising unemployment.

Indicators - People get into or stay in work and those not ready for work advance their employment prospects

Indicator	Current	Trend
Proportion of applicants who attend a Work for You seminar and do not need a benefit within 28 days	34.4% end of March 2009	New measure
Number of people exiting a main benefit and staying in work for six months or longer	30,553 2007/2008	Declining

 

Source: MSD's Information Analysis Platform

Detailed information about the Ministry's performance in this area is contained in the Information Supporting the Estimates and in the 2009/2010 Output Plan.