Reduce long-term welfare dependency
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Work is at the heart of a better quality of life for New Zealanders. Being in paid work, rather than on a benefit, leads to better health and wellbeing, brings in extra income, builds pride and connects people to their community.
|Government Priority||Government Theme||Government Result Area||Ministry Outcome|
|Delivering Better Public Services||Reducing Long-term Welfare Dependency||Reduce the number of people who have been on a working age benefit for more than 12 months||More people into work and out of welfare dependency|
What we want to achieve
The Government Theme of Reducing Long-term Welfare Dependency has one specific result area: Reduce the number of people who have been on a working age benefit for more than 12 months. The Ministry co-ordinates the cross-agency effort to achieve this result.
We are taking a more active approach to help people achieve their aspirations through work, not welfare. We will implement the Government’s Welfare Reform Programme to transform the welfare system into a modern, active and work-focused system that focuses on what people are capable of – not what they cannot do.
Specifically, in our context, we will deliver on the Ministry Outcome:
- More people into work and out of welfare dependency.
More people into work and out of welfare dependency
Linking it all together
Reducing Long-term Welfare Dependency
|Ministry Outcome||More people into work and out of welfare dependency|
|Ministry Intermediate Outcomes||Fewer clients are reliant on welfare||Fewer clients require a benefit long term|
|Ministry Output Expenses that Contribute||Vote Social Development
Vote Veterans’ Affairs – Social Development
More people into work and out of welfare dependency
Targeting our services to those who need it most and moving people off welfare and into work will lead to better lives for people and their families.
The next three years
Implement welfare reforms
Over the next three years we will fundamentally reform the welfare system and the way it is delivered. The welfare system will be more active, modern and work-focused, reducing the long-term welfare dependency experienced by too many New Zealanders.
Simplify the current benefit system
We will simplify the current benefit structure so that it is easier to understand and use. The Government is committed to grouping benefit support differently and changing the benefit names to reflect the new groups. Jobseeker Support, Sole Parent Support and Supported Living Payment will be introduced.
There will also be changes to the way we work with young people and what we expect from them. Two new benefits – the Young Parent Payment and the Youth Payment – reflect these changes.
The changes to the benefits will mean there is a more active system, which is simpler, with clear obligations for beneficiaries, and more transparent for taxpayers. The new benefits focus on what people can do and will replace the outdated Unemployment Benefit, Domestic Purposes Benefits, Sickness Benefit, Invalid’s Benefit, Independent Youth Benefit, Emergency Maintenance Allowance and Domestic Purposes Benefit for 18 year olds.
The changes will clarify who is expected to be available for work. More clients will now be obligated to actively seek work, including those on the old Domestic Purposes – Women Alone and Widow’s Benefits. To support the policy changes, case managers will have greater powers to require clients to actively seek work.
Investing up front
There are huge numbers of people on a benefit. Taking into account the longer-term costs of benefit spending, it makes economic and social sense to invest more up front in order to support more people into work sooner.
A key part of the welfare reform is the investment approach. It will help us make more informed decisions on when and where to focus our services for the greatest impact.
By using our own experiences, actuarial advice and better data we will make improved evidence-based strategic decisions about where to focus resources. This will ensure we make optimal gains in reducing future welfare costs.
This is not a one-size-fits-all approach. Our support will be focused on those that need it, more support will be available to people who are most likely to stay on a benefit for a long time. For people who cannot work, the benefit system will continue to protect them.
The investment approach means we will need to trial new ways of working. Regular and agile evaluation will quickly test if new ways of working are making a real difference. That data will be fed back to the work to actively improve the programmes in real time. The lessons learnt from this process will inform the way we work with other beneficiaries, making constant improvements along the way.
The Board provides assurance
The Work and Income Board will provide assurance to Joint Ministers on our performance as we work towards reducing long-term benefit dependency through the investment approach.
Some members of the Work and Income Board come with strong experience from the insurance and finance industries which already use investment approaches to reduce future liabilities. This will provide the Ministry with expertise and support as we test a new way of operating.
Added support for young people
The reforms will positively affect the lives of young people. We will focus on young people leaving the education system who are at risk of going on a benefit.
For those on a benefit, there are clear expectations and obligations to be in education, training or work-based learning in return for payment.
A Youth Service Provider will be attached to each young person on a benefit to mentor and help them with money management and decision-making. The goal is to support them to live independently and not simply go onto a benefit when they reach 18 years of age.
There are also new obligations for teen parents. With their benefit comes the requirement to enrol their child with a primary health care provider and complete Well-Child/Tamariki Ora checks. A Guaranteed Childcare Assistance Payment for children under five will be provided so that childcare costs do not prevent teen parents from studying.
These young people will receive extra money for staying in education for a sustained period of time.
The changes bring a twofold benefit, allowing parents to connect to education and exposing their children to quality early childhood education.
Delivering results together
Making the most of the strength and reach of third-party providers to supplement our own delivery is a key part of welfare reform.
While we already engage with a range of third-party providers, the move to intensive support for some of our clients, as part of the welfare reform means we will need to increase this engagement.
We will contract with proven providers to deliver job training, job-search and post-placement support to help clients stay in work once they get there. Other contracted services include more money management, budgeting and parenting services.
Work with industries and employers
It is important that we continue to generate opportunities working closely with industry associations and large employers. In partnership with industry we also purchase industry training programmes that focus on specific workforce skills and respond to skill shortages, particularly in Christchurch.
How we will demonstrate success
We will know that we have achieved our outcome when more people get into work and out of welfare dependency.
We will co-ordinate the cross-agency response to Government Result Area Number 1 Reduce the number of people who have been on a working age benefit for more than 12 months.
To be accountable and demonstrate our progress, we will use short and long-term measures to track our achievement. Our short-term performance will be measured against the performance measures in our key accountability documents.
|Ministry Outcome – More people into work and out of welfare dependency|
|Intermediate Outcome||Measure||Target||Comment/current Result|
|Fewer clients are reliant on welfare||The proportion of clients who get work before they require a benefit||Increasing proportion||New measure for 2012/2013|
|The proportion of clients who are working part time||Increasing proportion||New measure for 2012/2013|
|The proportion of clients who cancel their benefit and exit into employment||Increasing proportion||New measure for 2012/2013|
|The proportion of clients that are work ready||Increasing proportion||New measure for 2012/2013|
|Fewer clients require a benefit long term||The proportion of clients who remain on a working age benefit for longer than 12 months||Decreasing proportion||New measure for 2012/2013|