Overall Trends in Main Benefits

Trends in the number of clients receiving a main benefit

Decreases since 2004 in the number of recipients of main benefits (see table 2.5) reflect the combination of economic changes, demographic changes, policy changes and operational factors outlined above. Of the working age recipients of main benefits over this period, between 33% and 36% were aged 25-39 years, while between 29% and 32% were aged 40-54 years.

Table 2.5 Trends in the ages of recipients of a main benefit

Age of client at the end of June	2004 Number	2005 Number	2006 Number	2007 Number	2008 Number
	Working age clients receiving a main benefit1
18-19 years	13,508	11,763	11,042	9,502	10,237
20-24 years	36,590	33,123	31,352	28,424	28,748
25-29 years	35,878	32,900	31,419	28,378	27,559
30-34 years	38,506	34,911	32,458	28,761	27,315
35-39 years	37,762	35,805	34,483	31,819	31,059
40-44 years	35,774	34,154	33,035	30,581	29,863
45-49 years	28,018	27,511	27,937	27,430	28,075
50-54 years	24,399	23,946	23,884	23,599	23,643
55-59 years	26,265	25,351	25,099	23,962	23,542
60-64 years	32,660	31,002	29,590	28,553	28,276
Total working age clients	309,360	290,466	280,299	261,009	258,317
	Other clients receiving a main benefit1
Total other clients	10,761	10,923	10,942	10,560	10,655
	All clients receiving a main benefit1
Total	320,121	301,389	291,241	271,569	268,972

Note

1. Numbers of clients recorded in SWIFTT as receiving a main benefit at the end of June.

Since 2004, the proportion of working age recipients of main benefits who were receiving an unemployment-related benefit has decreased (from 24% to 9%), while the proportions receiving Invalid's Benefits increased (from 23% to 32%) (see table 2.6). These changes in use of different types of main benefits reflect, in part, the economic, demographic and other changes outlined in Overall trends in use of financial assistance and employment services.

The proportion of these clients who had received their benefit for over two years increased slightly between 2004 and 2007 (from 52% to 56%), but decreased to 54% in the last year (see table 2.7). The decrease over the last year reflects the impact of a bulk cancellation of benefits to transfer clients from fortnightly to weekly payments (which led to clients beginning new benefit spells), while the increase over the previous three years reflects changes in the proportion of recipients of main benefits who are receiving longer-term benefits such as Invalid's Benefit or carer's benefits.

Table 2.6 Trends in the types of main benefit received by working age clients

Type of main benefit received at the end of June	Working age clients receiving a main benefit1
	2004 Number	2005 Number	2006 Number	2007 Number	2008 Number
Unemployment-related benefits2	73,572	55,342	45,498	29,488	24,285
Carer's benefits3	108,893	105,647	101,641	96,467	96,440
Sickness-related benefits4	43,698	45,176	47,072	48,063	46,271
Invalid's Benefit	70,807	73,186	75,349	77,301	82,879
Widow's Benefit	8,261	7,637	7,001	6,287	5,803
Emergency Benefit	4,129	3,478	3,738	3,403	2,639
Total	309,360	290,466	280,299	261,009	258,317

Notes

1. Numbers of working age clients recorded in SWIFTT as receiving a main benefit at the end of June.
2. Comprises Unemployment Benefits and Unemployment Benefits - Hardship paid to unemployed people or to those in training, and Independent Youth Benefits.
3. Comprises Domestic Purposes Benefits - Sole Parent, Domestic Purposes Benefits - Care of Sick or Infirm, Domestic Purposes Benefits - Women Alone, and Emergency Maintenance Allowances.
4. Comprises Sickness Benefits and Sickness Benefits - Hardship.

Table 2.7 Trends in the length of current spells receiving a main benefit, for working age clients

Length of current spell at the end of June	Working age clients receiving a main benefit1
	2004 Number	2005 Number	2006 Number	2007 Number	2008 Number
Under 6 months	65,082	57,632	55,658	48,230	51,531
6 months-2 years	84,477	79,764	75,070	67,869	67,676
2-4 years	55,720	52,118	50,530	48,466	44,454
Over 4 years	104,081	100,952	99,041	96,444	94,656
Total	309,360	290,466	280,299	261,009	258,317

Note

1. Numbers of working age clients recorded in SWIFTT as receiving a main benefit at the end of June.

Since 2004, around 46% of working age recipients of main benefits have identified as New Zealand European, and around 31% as Māori (see table 2.8).

Table 2.8 Trends in the ethnicity of working age recipients of a main benefit

Recorded ethnicity at the end of June	Working age clients receiving a main benefit1
	2004 Number	2005 Number	2006 Number	2007 Number	2008 Number
Māori	94,714	89,822	87,003	81,189	81,268
Pacific peoples	22,903	21,526	20,853	19,476	19,719
Other ethnic groups	42,161	39,131	37,276	34,940	34,431
New Zealand European	144,890	135,224	130,259	120,390	117,485
Not coded	4,692	4,763	4,908	5,014	5,414
Total	309,360	290,466	280,299	261,009	258,317

Note

1. Numbers of working age clients recorded in SWIFTT as receiving a main benefit at the end of June.

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Trends in main benefits granted

Decreases since 2003/2004 in the number of main benefits granted (see table 2.9) reflect a mix of improved economic conditions and changes in Government policies and in operational practices. Over this period, between 38% and 41% of the working age clients granted these benefits had not received a main benefit in the previous 12 months, while around 28% had transferred from another benefit or district.

Table 2.9 Trends in the length of periods since clients granted a main benefit last received any main benefit

Period since client last received any main benefit	2003/2004 Number	2004/2005 Number	2005/2006 Number	2006/2007 Number	2007/2008 Number
	Working age clients granted a main benefit1
None (clients transferring between benefits or districts, or transferring from the same type of benefit)2,3	69,348	61276	56342	55322	54339
Under 6 months	44,958	41508	37451	34586	31985
6-12 months	35,257	32164	28103	23856	22639
12-18 months	11,136	10696	10682	8873	9316
18 months-2 years	8,893	8120	8281	7049	6840
2-4 years	16,765	15250	15960	14580	13861
Had not received a main benefit in previous four years	55,126	49477	49309	46195	46178
Total main benefits granted to working age clients	241,483	218,491	206,128	190,461	185,158
	Other clients granted a main benefit1
Main benefits granted to other clients	8,760	8,808	8,111	7,291	7,662
	All clients granted a main benefit1
Total	250,243	227,299	214,239	197,752	192,820

Notes

1. Numbers of successful applications for main benefits recorded in SWIFTT during years ended June.
2. Includes only a minority of transfers of benefits between districts. Most such transfers are accomplished without cancelling and re-granting benefits.
3. Transfers from the same type of benefit may occur when clients receiving hardship assistance become eligible for statutory benefits (eg a transfer from a Sickness Benefit - Hardship to a Sickness Benefit), or may reflect a change in client circumstances (eg a client completing a training course may transfer from an Unemployment Benefit - Training to an Unemployment Benefit payable to an unemployed person).

Over this period, unemployment-related benefits accounted for a decreasing proportion of main benefits granted to working age clients (41% in 2007/2008, compared with 56% in 2003/2004), while the proportions accounted for by carer's benefits and sickness-related benefits both increased. Invalid's Benefits accounted for an increased proportion of these benefits between 2006/2007 and 2007/2008 (see table 2.10).

Table 2.10 Trends in the types of main benefit granted to working age clients

Type of main benefit granted	Main benefits granted to working age clients1
	2003/2004 Number	2004/2005 Number	2005/2006 Number	2006/2007 Number	2007/2008 Number
Unemployment-related benefits2	134,572	115,508	103,945	88,642	76,835
Carer's benefits3	36,604	35,304	34,142	33,471	36,494
Sickness-related benefits4	47,663	47,259	47,517	48,666	49,518
Invalid's Benefit	11,044	10,898	10,841	11,074	15,007
Widow's Benefit	1,981	1,953	1,780	1,593	1,623
Transitional Retirement Benefit5	1,242	0	0	0	0
Emergency Benefit	8,377	7,569	7,903	7,015	5,681
Total	241,483	218,491	206,128	190,461	185,158

Notes

1. Numbers of successful applications from working age clients for main benefits recorded in SWIFTT during years ended June.
2. Comprises Unemployment Benefits and Unemployment Benefits – Hardship paid to unemployed people or to those in training, and Independent Youth Benefits.
3. Comprises Domestic Purposes Benefits – Sole Parent, Domestic Purposes Benefits – Care of Sick or Infirm, Domestic Purposes Benefits – Women Alone, and Emergency Maintenance Allowances.
4. Comprises Sickness Benefits and Sickness Benefits – Hardship.
5. Phasing-out of this benefit was completed on 1 April 2004.

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Trends in main benefits cancelled

Reductions since 2003/2004 in the number of main benefits cancelled each year (see table 2.11) reflect the reduction in total numbers receiving a main benefit. Over the last three years, the proportion of working age clients cancelling main benefits who entered paid work decreased slightly, from 37% to 33%, with a corresponding increase in the proportion transferring to another main benefit.

Table 2.11 Trends in reasons for clients cancelling main benefits

Reason main benefit cancelled	2003/2004 Number	2004/2005 Number	2005/2006 Number	2006/2007 Number	2007/2008 Number
	Main benefits cancelled by working age clients1
Obtained paid work2	94,983	88,413	75,591	74,514	61,113
Transferred to another benefit, pension or district3,4	71,092	61,885	57,639	56,603	55,123
Other2	101,691	89,520	81,158	79,985	71,394
Total main benefits cancelled by working age clients	267,766	239,818	214,388	211,102	187,630
	Main benefits cancelled by other clients1
Total main benefits cancelled by other clients	9,220	9,508	8,685	8,326	7,441
	Main benefits cancelled by all clients1
Total	276,986	249,326	223,073	219,428	195,071

Note

1. Numbers of cancellations of main benefits recorded in SWIFTT during years ended June.
2. Due to recoding of reasons for cancelling main benefits, these figures may not reconcile with those published in previous years.
3. "Transferred to another benefit [or] pension" includes some transfers from main benefits to New Zealand Superannuation, including those previously shown as "Qualified for New Zealand Superannuation".
4. "Transferred to another … district" represents cancellations undertaken so a client's benefit can be administered from a different Work and Income service centre. These changes may arise from a change of address by the client or from an administrative decision by Work and Income. A majority of transfers of benefits between districts are completed without cancelling the client's benefit, and therefore are not included above.

Forty-four percent of main benefits cancelled by working age clients in 2007/2008 were unemployment-related, compared with 51% in 2006/2007. There was a corresponding increase in the proportion which were sickness-related benefits (from 22% to 27%) (see table 2.12).

Table 2.12 Trends in the types of main benefit cancelled by working age clients

Type of main benefit cancelled	Main benefits cancelled by working age clients1
	2003/2004 Number	2004/2005 Number	2005/2006 Number	2006/2007 Number	2007/2008 Number
Unemployment-related benefits2	167,674	137,069	113,315	106,827	82,720
Carer's benefits3	37,627	38,960	38,698	39,273	36,873
Sickness-related benefits4	42,608	45,219	44,742	47,254	51,207
Invalid's Benefit	7,158	7,961	8,082	8,454	8,530
Widow's Benefit	2,138	2,189	2,094	1,996	1,832
Transitional Retirement Benefit5	2,352	0	0	0	0
Emergency Benefit	8,209	8,420	7,457	7,298	6,468
Total	267,766	239,818	214,388	211,102	187,630

Notes

1. Numbers of cancellations by working age clients of main benefits recorded in SWIFTT during years ended June.
2. Comprises Unemployment Benefits and Unemployment Benefits – Hardship paid to unemployed people and to those in training, and Independent Youth Benefits.
3. Comprises Domestic Purposes Benefits – Sole Parent, Domestic Purposes Benefits – Care of Sick or Infirm, Domestic Purposes Benefits – Women Alone, and Emergency Maintenance Allowances.
4. Comprises Sickness Benefits and Sickness Benefits – Hardship.
5. Phasing-out of this benefit was completed on 1 April 2004.

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Trends in expenditure on pensions and main benefits

Please note that expenditure data provided in table 2.13 and table 2.14 excludes expenditure on supplementary benefits paid to recipients of the main benefit shown, while expenditure data provided in other sections of this report includes this expenditure.

Please note also that all expenditure data provided in this report for unemployment-related benefits includes expenditure on:

• Emergency Benefits paid to unemployed people and trainees, which were available after 1 October 1998
• Emergency Unemployment Benefits paid to unemployed people prior to that time.

This aims to ensure a consistent series over time for expenditure on unemployment-related benefits. Numbers provided in table 2.6, 2.10 and 2.11 above of clients receiving, granted or ceasing unemployment-related benefits, however, exclude information about the use of the Emergency Benefit and the Emergency Unemployment Benefit. Use of these benefits is reported under the heading "Emergency Benefits" in this report.

Expenditure on main benefits has decreased since 2003/2004, although the rate of decrease has slowed in recent years (see table 2.13). This trend reflects changes in both the use of main benefits and the levels at which main benefits are paid.

Thirty-two percent of the total expenditure on main benefits in 2007/2008 was on Invalid's Benefits, and another 15% on sickness-related benefits. This compares with 23% and 11% respectively in 2003/2004. Over the same period, the proportion of main benefit expenditure accounted for by (see table 2.13):

• unemployment-related benefits decreased from 26% to 12%
• carer's benefits was around 37%.

Increases since 2003/2004 in annual pension expenditure (see table 2.13) reflect both increases in the number of clients receiving pensions and adjustments to the rate at which pensions are paid. Over this period, New Zealand Superannuation has accounted for virtually all expenditure on pensions.

Table 2.13 Trends in expenditure on pensions and main benefits

Type of pension or main benefit	Expenditure on pensions and main benefits1,2,3
	2003/2004 Amount ($m)	2004/2005 Amount ($m)	2005/2006 Amount ($m)	2006/2007 Amount ($m)	2007/2008 Amount ($m)
Unemployment-related benefits and Emergency Benefit4,6	939	721	618	531	398
Carer's benefits4,7	1,303	1,283	1,238	1,216	1,223
Sickness-related benefits4,8	398	431	457	483	491
Invalid's Benefit4	817	858	897	945	1,014
Widow's Benefit4	78	74	69	65	61
Transitional Retirement Benefit4,9	9	0	0	0	0
Total expenditure on main benefits4	3,543	3,368	3,279	3,240	3,186
New Zealand Superannuation5	4,837	4,984	5,232	5,542	5,966
Veteran's Pension5	91	98	105	118	133
Total pensions expenditure5	4,928	5,083	5,337	5,661	6,099
Total expenditure on main benefits and pensions	8,471	8,450	8,617	8,900	9,285

Notes

1. Expenditure for years ended June. Expenditure shown is calculated on an accrual basis and excludes debts established.
2. Expenditure data in this table differs from, and should not be cited as, MSD's official measure of expenditure on financial assistance provided to clients.
3. Figures shown may not add to the totals provided because of rounding.
4. Expenditure on main benefits excludes tax paid on these benefits, and excludes supplementary benefits provided to recipients of a main benefit.
5. Expenditure on pensions excludes tax estimated at the "M" tax rate, and excludes supplementary benefits provided to pension recipients. Expenditure on pensions paid to recipients living in the United Kingdom is also excluded.
6. Comprises Unemployment Benefits and Unemployment Benefits - Hardship paid to unemployed people and to those in training, and Independent Youth Benefits. Also includes Emergency Benefits paid to unemployed people or trainees since 1October1998.
7. Comprises Domestic Purposes Benefits - Sole Parent, Domestic Purposes Benefits - Care of Sick or Infirm, Domestic Purposes Benefit - Women Alone, and Emergency Maintenance Allowances.
8. Comprises Sickness Benefits and Sickness Benefits - Hardship.
9. Phasing-out of this benefit was completed on 1 April 2004.

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Trends in the proportion of Gross Domestic Product accounted for by expenditure on pensions and main benefits

The proportion of Gross Domestic Product accounted for by expenditure on pensions and main benefits has decreased since 2003/2004, although the rate of decrease has slowed in the last two years (see table 2.14). This reflects slowing decreases in expenditure on main benefits and ongoing increases in expenditure on pensions during a period when GDP was expanding yearly.

Table 2.14 Trends in the proportion of Gross Domestic Product accounted for by expenditure on pensions and main benefits

Type of expenditure	Expenditure on pensions and main benefits1,2,3
	2003/2004	2004/2005	2005/2006	2006/2007	2007/2008
Total expenditure on main benefits ($m)4	3,543	3,368	3,279	3,240	3,186
Total expenditure on pensions ($m)5	4,928	5,083	5,337	5,661	6,099
Total expenditure on pensions and main benefits ($m)	8,471	8,450	8,617	8,900	9,285
Gross Domestic Product (GDP) ($m)6	143,127	152,060	158,283	168,571	179,048
Expenditure on main benefits as a percentage of GDP4	2.5%	2.2%	2.1%	1.9%	1.8%
Expenditure on pensions as a percentage of GDP5	3.4%	3.3%	3.4%	3.4%	3.4%
Percentage of Gross Domestic Product7	5.9%	5.6%	5.4%	5.3%	5.2%

Notes

1. Expenditure on pensions and main benefits for years ended June. Expenditure shown is calculated on an accrual basis and excludes debts established.
2. Expenditure data in this table differs from, and should not be cited as, MSD's official measure of expenditure on financial assistance provided to clients.
3. Figures shown may not add to the totals provided because of rounding.
4. Excludes tax paid on main benefits, and excludes expenditure on supplementary benefits provided to recipients of main benefits.
5. Includes expenditure on New Zealand Superannuation. Excludes tax estimated at the "M" tax rate, excludes expenditure on supplementary benefits provided to pension recipients, and excludes expenditure on pensions paid to recipients in the United Kingdom.
6. Expenditure on Gross Domestic Product in actual current prices (Statistics New Zealand series SNC-S1NB15). Statistics provided include all revisions as at release of June 2008 quarter data. Value shown is sum of quarters ended September to June.
7. Total combined expenditure on pensions and main benefits for years ended June as a percentage of Gross Domestic Product in years ended June.

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Trends in the distribution of main benefit expenditure among client groups

The distribution among client groups of expenditure on main benefits reflects a combination of factors. These include patterns in: the uptake of main benefits; the length of spells receiving a main benefit; and whether or not clients have dependent children.

Of annual expenditure on main benefits since 2003/2004:

• the proportion accounted for by clients aged 40-64 years increased slightly (from 45% to 49%), with a corresponding decrease in the proportion accounted for by clients aged 25-39 years (see table 2.15)
• around 65% was accounted for by women (see table 2.16)
• around 44% was accounted for by New Zealand Europeans, and around 31% by Māori (see table 2.17).

Table 2.15 Trends in the distribution across age groups of expenditure on main benefits

Age of client when payment made	2003/2004 Percent	2004/2005 Percent	2005/2006 Percent	2006/2007 Percent	2007/2008 Percent
	Percentage of expenditure on main benefits paid to working age clients1,2
18-19 years	3.5%	3.3%	3.3%	3.2%	1.9%
20-24 years	11.2%	10.7%	10.6%	10.4%	9.5%
25-29 years	11.9%	11.5%	11.3%	11.1%	11.1%
30-39 years	25.7%	25.2%	24.4%	23.8%	23.8%
40-49 years	20.1%	20.7%	21.1%	21.5%	22.1%
50-59 years	15.3%	15.8%	16.3%	16.7%	16.9%
60-64 years	9.4%	9.6%	9.6%	9.7%	10.2%
Total working age clients	97.1%	96.8%	96.6%	96.5%	95.5%
	Percentage of expenditure on main benefits paid to other clients1,2
Total other clients	2.9%	3.2%	3.4%	3.5%	4.5%
	Percentage of expenditure on main benefits paid to all clients1,2
Total all clients	100.0%	100.0%	100.0%	100.0%	100.0%

Notes

1. Percentage of expenditure on main benefits in years ended June. Due to rounding, percentage figures may not add to the totals indicated.
2. Excludes tax paid on main benefits, and excludes expenditure on supplementary benefits provided to clients receiving a main benefit.

Table 2.16 Trends in the distribution across gender groups of expenditure on main benefits

Gender of client	Percentage of expenditure on main benefits1,2
	2003/2004 Percent	2004/2005 Percent	2005/2006 Percent	2006/2007 Percent	2007/2008 Percent
Female	64.0%	65.1%	64.9%	64.7%	65.2%
Male	36.0%	34.9%	35.1%	35.3%	34.8%
Total	100.0%	100.0%	100.0%	100.0%	100.0%

Notes

1. Percentage of expenditure on main benefits in years ended June. Due to rounding, percentage figures may not add to the totals indicated.
2. Excludes tax paid on main benefits, and excludes expenditure on supplementary benefits provided to clients receiving a main benefit.

Table 2.17 Trends in the distribution across ethnic groups of expenditure on main benefits

Ethnic group client identifies with at end of year shown	Percentage of expenditure on main benefits1,2
	2003/2004 Percent	2004/2005 Percent	2005/2006 Percent	2006/2007 Percent	2007/2008 Percent
Māori	30.5%	30.7%	31.0%	31.0%	31.0%
Pacific peoples	7.8%	7.9%	7.9%	8.0%	8.0%
Other ethnic groups	15.2%	15.3%	15.1%	15.2%	15.4%
New Zealand European	45.3%	44.7%	44.7%	44.1%	44.1%
Unspecified	1.2%	1.5%	1.4%	1.6%	1.5%
Total	100.0%	100.0%	100.0%	100.0%	100.0%

Notes

1. Percentage of expenditure on main benefits in years ended June. Due to rounding, percentage figures may not add to the totals indicated.
2. Excludes tax paid on main benefits, and excludes expenditure on supplementary benefits provided to clients receiving a main benefit.

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