Future Focus overview

Future Focus is a comprehensive package of reforms aiming to break the cycle of welfare dependency.

The legislation supporting Future Focus, the Social Security (New Work Tests, Incentives and Obligations) Amendment Bill, was signed into law on 23 August 2010.

The new provisions come into effect on 27 September 2010.

The Package

• Government believes that those who can work should
• Re-balances the obligations & incentives
• Costs around $88 million over four years, including:
  • Increases to the abatement thresholds ($53 million).
  • Introduction of a new study loan for DPB sole parents (up to $9 million)
  • Changes to OSCAR rules which we expect will lead to more childcare ($4 million)
• Largely funded through savings from adjusting income thresholds for new applications for childcare assistance (from $77,272 for 1 child to $72,800)
• Implementation costs ($22 million) - staff time, resources and IT changes of $5.5 million a year to be met from reprioritisation within MSD
• Potential benefit savings of around $100 million over four years

Obligations

• Introduces part-time work test for DPB with children 6 and over (from September 2010)
• Introduces part-time work test for SB who are able to work part-time (from May 2011)
• Have to reapply for UB after 12 months
• 12 month review for SB
• New 8 week medical certificate required for SB
• Repeat applicants for one off hardship payments will get budgeting help
• Introduces graduated sanctions when obligations are not met
• Require young people on IYB to be in education, work or training

Incentives

• 28,000 people a year will benefit from the increased abatement thresholds
• 3,600 $500 loans to help sole parents in tertiary study
• new rules to make it easier for home based and other providers to get OSCAR funding - $4 million extra OSCAR subsidies as a result
• Legislates annual CPI adjustments, previously not set down in law, which will support 345,000 beneficiaries and 53,000 Students

Domestic Purposes Benefit

A benefit for sole parents with children in their care.

• 97,000 currently receive DPB
• 43,000 have a youngest child over six
• 54,000 have youngest child under six
• 8,500 are former teen parents with children over six
• Will be work testing 4,500 at any one time
• Government spend $1,530 million 2008/09 year

Unemployment Benefit

A short-term benefit for those temporarily unable to find work

• 64,000 currently receive UB
• 12,000 people currently on UB have received it for more than 1 year
• Will have to reapply after 12 months and undergo comprehensive work assessment
• Government spend $586 million 2008/09 year

Sickness Benefit

A short-term benefit for those temporarily unable to work full-time because of illness, injury, or disability

• 58,000 currently receive SB
• 29,580 have been on SB for more than one year
• 9,000 are already medically assessed as capable of some part-time work or light duties - will be expected to work if jobs are available
• Government spend $613 million 2008/09 year

Invalid's Benefit

A long-term benefit for those who are unlikely to be able to work in the next two years because of severe illness, injury, or disability

• 85,000 currently receive IB
• No change for those with serious incapacity to work
• Eligibility criteria will be applied rigorously to new applicants to ensure they are receiving the appropriate benefit
• Government spend $1,260 million 2008/09 year

Hardship Payments

People will need to take reasonable steps towards managing their money

• Administration will be streamlined to focus case management on those beneficiaries who are high users
• Greater support in budgeting for repeat applicants, such as planning and budgeting support
• People who can't show that they are working budgeting skills and trying to improve their situation will not be eligible for more hardship assistance