More people get into work and stay in work

Work is at the heart of a better quality of life for New Zealanders. Paid work leads to better health and wellbeing, brings in extra income, and connects people to their community. We are taking a more active approach to help people achieve their aspirations through work, not welfare.

Welfare reform

In 2011/2012, we began a programme of fundamental welfare reform. Based on the recommendations of the Welfare Working Group, we will take a long-term investment approach to getting people off welfare and into work. Through Budget 2012, the Government has invested $288 million over the next four years to implement the reform changes.

Investment Approach

A major focus for the year was the development of an investment approach for the benefit system. This type of approach has not been tried before and is central to the welfare reforms.

As part of the Investment Approach, Australian actuary firm Taylor Fry has completed an actuarial valuation of the benefit system. This valuation provides for the first time an estimate of the future cost of the benefit system, enabling us to understand who needs help, to learn what works and to adapt our services. In turn this will allow us to put resources where they have the biggest impact and to intervene earlier.

We can provide more intensive support to clients who are at a higher risk of remaining on a benefit long-term and less intensive services for clients whose primary need is income support in between jobs.

Work and Income Board

To help us with this new approach, the Work and Income Board was established in April 2012 to:

• advise and support the Chief Executive of the Ministry of Social Development in the implementation of welfare reforms
• provide assurance to the Minister of Finance, the Minister for Social Development and the Minister of State Services on the performance of Work and Income, including the design, implementation and ongoing delivery of the Investment Approach.

The Board members are Ms Paula Rebstock (Chair), Dr Ian McPherson, Professor Kathryn McPherson, Mr Andrew Body, Mr Reg Barrett and Ms Debbie Packer. The Board meets monthly.

Health and Disability Panel

During 2011/2012, we established a Health and Disability Panel of 14 experts to provide specialist and expert advice to the Ministry. The Panel helped to ensure that the welfare changes are appropriate and effective for the 143,000 people on a benefit who are sick or disabled. The Health and Disability Panel assisted us in shifting the emphasis away from what stops people on benefits from working, to what work people can do and what help they need to get them into work.

The Panel first met in October 2011 and has met on three occasions since.

Social Security (Youth Support and Work Focus) Amendment Act

• We progressed the first piece of legislation for welfare reform this year. The Social Security (Youth Support and Work Focus) Amendment Bill was introduced to the House in March 2012. The Bill was passed into law in July 2012, and supports the following service delivery changes:
• Sixteen- and 17-year-old school leavers at risk of going on a benefit will receive a wrap-around service.
• Sixteen and 17 year olds and 16- to 18-year-old teen parents who require financial support will receive a new Youth Payment and Young Parent Payment. To receive the payment, these young people will have to work with providers to ensure they:
  • receive help to manage their money
  • are in education, training or work-based learning
  • attend parenting courses and enrol their child or children in early childhood education and with a primary health provider.
• A new Guaranteed Childcare Assistance Payment will help young parents to get access to education or training and will support their children to get access to quality early childhood education.

More than half of 16 and 17 year olds who enter the benefit system spend at least five of the next 10 years on a benefit.

Approximately 3,000 young people aged 16 and 17, and teen parents aged up to 18 receive a benefit.

Social Security (Benefit Categories and Work Focus) Amendment Bill

This year we also worked on a second piece of legislation for welfare reform, which will be introduced into the House in late September 2012. This Bill includes:

• new main benefit categories that will have a focus on work
• a new approach to work with people who are sick and disabled
• drug-testing requirements where a job or training programme has prerequisite drug testing
• social obligations that beneficiaries with children must meet in order to continue to receive benefit payments
• the power to stop benefit payment to beneficiaries with a warrant to arrest in criminal proceedings
• new regulations that will specify what expenses can be funded by the Disability Allowance
• the ability for us to contract preferred suppliers of goods and services.

Continuing to deliver business as usual

During the year, we remained focused on reconnecting clients with the labour market more quickly and moving them off a main benefit. We reduced the number of working-age clients receiving a main benefit from 327,817 at the end of June 2011 to 320,041 at the end of June 2012.

The most significant change was the number of working-age clients receiving an unemployment-related benefit. As at 30 June 2012, 49,622 working-age clients were receiving the Unemployment Benefit, down from 56,264 at 30 June 2011.

More than 1.7 million clients were seen at our service centres.

Future Focus

We continued to implement the Future Focus changes. During 2011/2012:

• 16,358 Domestic Purposes Benefit clients undertook part-time work, compared to 15,312 in 2010/2011
• 4,545 Sickness Benefit recipients undertook part-time work, compared to 4,212 in 2010/2011
• nearly 8,000 benefits were cancelled following a requirement to prove continuing entitlement to the Unemployment Benefit after 12 months
• we referred 175,136 repeat applicants for one-off hardship payments to a budgeting course, compared to 121,177 in 2010/2011 – an increase of just over 30 per cent.

Future Focus changes strengthened full-time and part-time work testing, reapplication or budgeting requirements for some clients.

Job Search Service

Our Job Search Service helps clients to reconnect with the labour market. At the outset, clients are required to attend a Work for You seminar which introduces them to local job information, job-search activities, one-on-one case management and group workshops. In 2011/2012, 52,473 jobseekers aged 18 to 24 years who attended a Work for You seminar (47 per cent of attendees) did not require a benefit within 28 days of attending.

Job Connect provides a recruitment service to jobseekers and employers via the telephone. Job Connect listed 13,500 jobs and placed more than 5,000 clients into work in 2011/2012.

Compared to June 2011, there has been a 12 per cent decrease in clients receiving the Unemployment Benefit.

Employment support for disabled people

In 2011/2012, we continued to provide opportunities for disabled people to participate and be included in everyday life through:

• The Mainstream employment programme, which provides a support and subsidy package to employers. The programme supported 349 disabled people to gain work experience.
• The Employers’ Disability Network, which takes a leadership role for disabled clients in the private sector. We facilitated ongoing discussions between employers, the disability sector and government agencies to identify priorities to be included in our Disability Action Plan.
• Our Think Differently campaign DVD, which showcased employer success stories as well as research on employer perceptions to support the employer forums.
• The Employment Innovation Fund from November 2011, which funded employers and the non-government sector to develop 18 innovative initiatives to help disabled people get and stay in employment.

Online services

During 2011/2012, we further strengthened our use of technology to enable us to direct our face-to-face resources to those who need it.

Between August and October 2011, we opened more self-service kiosks in our Work and Income service centres. We reorganised online material on the kiosks to make it more user-friendly for our clients to access, and repositioned our kiosks so that they are easy for our clients to find.

These improvements contributed to an increase of more than 20 per cent in the number of people using the kiosks. By June 2012, 61 per cent of Unemployment Benefit-related[1] applications and 36 per cent of Domestic Purposes Benefit-related applications were completed online.

In July 2011, we also added new features to ‘My Account’[2] so clients can check their benefit payment details and update some of their contact details online.

Usage of ‘My Account’ has increased from around 50,000 to around 300,000 page views per month to June 2012.

[1] Applications include Unemployment Benefit and Unemployment Benefit­ – Hardship.

[2] ‘My Account’ is a service which allows clients to access information and services online.

Providing support in emergencies

Assistance and employment opportunities in Christchurch

In response to the Canterbury earthquakes of 2010 and 2011, we created employment opportunities for Cantabrians including:

• ‘on the spot’ services for employers, further enabling the timely and efficient matching of clients to jobs
• over 500 places in training to help with the rebuilding of Christchurch
• the Jobs for a Local subsidy, which encouraged employers to take on staff whose work had been negatively impacted by the disaster.

We are committed to playing a part in the recovery and rebuild of Christchurch.

Agile assistance

During 2011/2012, the Government introduced the Rena Support Subsidy to minimise the adverse impact of the Rena grounding in the Bay of Plenty on employees of affected businesses. We paid out more than $84,000 in assistance to 19 businesses, representing 41 employees.

In response to the Nelson floods in December 2011, we made 77 Civil Defence payments to 41 people for food, clothing and accommodation.

The future

Our work to deliver against this outcome in 2011/2012 has positioned us well to co-ordinate the cross-sector response to achieve Better Public Services Result 1: Reduce the number of people who have been on a working-age benefit for more than 12 months.

We will also contribute to Better Public Services Result 10: New Zealanders can complete their transactions with the Government easily in a digital environment.

2011–2014 Statement of Intent Performance Indicators 

More people get into work and stay in work