Statistics Report Cover 2008

Unemployment-related benefits

Overview

This group of main benefits comprises Unemployment Benefits, Unemployment Benefits - Hardship and Independent Youth Benefits. Please note that the recipients of these benefits are not necessarily officially unemployed, and in particular that some are in approved full-time training.

Between 1 October 1998 and 30 June 2001:

  • an Unemployment Benefit paid to an unemployed person was known as a Community Wage - Job Seeker
  • an Unemployment Benefit - Hardship paid to an unemployed person was known as a Community Wage - Emergency Job Seeker
  • an Unemployment Benefit paid to a person in training was known as a Community Wage - Training.

Clients receiving an unemployment-related benefit are subject to a full-time work test, with most being registered as job seekers. Between April 1997 and September 2007, the spouses or partners of clients receiving an unemployment-related benefit were also subject to a full-time work test if:

  • they had no dependent children, or
  • their youngest dependent child was aged 14 years or over.

Between April 1997 and February 1999, the spouses or partners of clients who had received unemployment-related benefits for more than one year were required to attend an annual interview with a Work and Income case manager if their youngest dependent child was aged 7-13 years. This interview was aimed at planning their entry into paid work.

Between February 1999 and September 2007, the spouses or partners of recipients of an unemployment-related benefit whose dependent children were aged under 14 years were subject to:

  • a part-time work test if their youngest dependent child was aged 6-13 years
  • a requirement to attend an annual planning interview with a Work and Income case manager if their youngest dependent child was aged under six years (the aim of this interview was to plan their entry into paid work once their youngest dependent child reached the age of six years).

From September 2007, spouses and partners of recipients of an unemployment-related benefit were subject to:

  • a full-time work test if they had no dependent children, or if their youngest dependent child was aged 18 or over (unless that child was aged 18 years and engaged in full-time education or training)
  • a part-time work test if their youngest child was aged 6-17 years, or was aged 18 years and engaged in full-time education or training.

From September 2007, these partners or spouses have not been subject to work test requirements if the couple's youngest dependent child is aged under six years. However, these partners or spouses are obliged to engage with the Personal Development and Employment planning process if required.

During the 2003/2004 financial year, work-tested clients had Government expectations about meeting the work test made clearer. Other work test requirements added during the 2003/2004 financial year included a requirement to:

  • take pre-employment drug tests if required to by a prospective employer (from October 2003)
  • commute to seek and undertake paid work if there is no such work available in their local area (from March 2004).

Eligibility for unemployment-related benefits

Unemployment Benefit

An Unemployment Benefit is available to people who are:

  • available for and actively seeking full-time work
  • not already in full-time employment
  • willing and able to undertake suitable full-time work.

To be eligible to receive an Unemployment Benefit, clients must also be:

  • aged 18 years or over, or
  • aged 16–17 years, married or in a civil union, and supporting dependent children.

Residency and income tests apply.

Clients applying for an Unemployment Benefit must meet all pre-benefit requirements (eg attending pre-benefit courses, applying for jobs) before receiving a benefit.

From 8 December 2003, clients aged 55-59 years applying for an Unemployment Benefit could no longer receive a work-test exemption. Unemployment Benefit recipients previously exempted from the work test through being aged 55-59 years had this exemption removed from January 2004, unless they would have turned 60 years of age by 31 July 2004.

An Unemployment Benefit is also available to full-time trainees on approved training courses who are:

  • aged 18 years or over, or
  • aged 16–17 years, married or in a civil union, and supporting dependent children.

Income and residency qualifications apply.

Unemployment Benefit - Hardship

An Unemployment Benefit - Hardship is available to people who don't meet all of the eligibility criteria for the Unemployment Benefit but who have not been successful in supporting themselves through paid employment or other means. Income and asset tests apply.

Full-time tertiary students who are unable to secure employment over the summer vacation may be eligible for an Unemployment Benefit - Hardship. To be eligible, students must meet income and asset tests and:

  • have received a Student Allowance during the academic year
  • be entitled to receive a Student Allowance during the next academic year, or
  • have exceptional circumstances.

Independent Youth Benefit

An Independent Youth Benefit is available to 16–17 year olds who, for some serious reason, can't live with their parents, can't get financial support from their parents or anyone else, and are:

  • actively looking for full-time work
  • a full-time trainee in an approved training course
  • attending secondary school, or
  • temporarily unable to work through sickness or injury.

Residency and income tests apply. From 1 January 1998, an Independent Youth Benefit was no longer available to 16 and 17 year olds who had moved away from home in search of work when no family breakdown had occurred.


Trends in the number of clients receiving an unemployment-related benefit

Decreases since 2004 in the number of clients receiving an unemployment-related benefit (see table 3.1) reflect improved economic conditions combined with policy and operational changes, as outlined in Overall trends in use of financial assistance and employment services. Decreases in numbers receiving unemployment-related benefits have slowed over the last year. Over this period, virtually all recipients of these benefits have been working age clients, with most of the remainder aged under 18 years and receiving an Independent Youth Benefit.

Since 2005, the proportion of working age recipients of these benefits who were aged 55-64 years has fallen (from 21% to 16%), while the proportion aged 40-54 years has increased slightly (from 21% to 24%) (see table 3.1). Since 2004, there have been increases in the proportion of these benefit recipients who:

  • were receiving a benefit paid to people in training (from 6% to 26%) (see table 3.2)
  • had received their benefit for less than six months (from 39% to 58%) (see table 3.3).

Table 3.1 Trends in the ages of recipients of an unemployment-related benefit

Age of client at the end of June 2004 Number 2005 Number 2006 Number 2007 Number 2008 Number
Working age clients receiving an unemployment-related benefit1,2
18-19 years 7,574 5,630 4,550 2,787 2,893
20-24 years 12,695 9,651 7,587 4,713 4,123
25-29 years 8,676 6,578 5,627 3,456 2,873
30-34 years 7,284 5,367 4,545 2,904 2,425
35-39 years 6,235 4,819 4,106 2,789 2,249
40-44 years 5,821 4,312 3,706 2,507 2,097
45-49 years 5,090 3,875 3,385 2,342 2,111
50-54 years 4,510 3,347 2,816 1,931 1,665
55-59 years 5,161 3,398 2,735 1,716 1,375
60-64 years 10,526 8,365 6,441 4,343 2,474
Total working age clients 73,572 55,342 45,498 29,488 24,285
  Other clients receiving an unemployment-related benefit1,2
Total other clients 3,193 2,497 1,930 1,437 1,365
  All clients receiving an unemployment-related benefit1,2
Total 76,765 57,839 47,428 30,925 25,650

Notes

  1. Unemployment-related benefits comprise Unemployment Benefits and Unemployment Benefits - Hardship paid to unemployed people or to those in training, and Independent Youth Benefits.
  2. Numbers of clients recorded in SWIFTT as receiving an unemployment-related benefit at the end of June.

Table 3.2 Trends in the types of unemployment-related benefit received by working age clients

Type of unemployment-related benefit received at the end of June Working age clients receiving an unemployment-related benefit1
2004 Number 2005 Number 2006 Number 2007 Number 2008 Number
Unemployment Benefits and Unemployment Benefits -Hardship paid to unemployed people 68,755 50,714 39,752 23,159 17,710
Unemployment Benefits and Unemployment Benefits -Hardship paid to people in training 4,469 4,364 5,566 6,099 6,432
Unemployment Benefit – Hardship paid to students 230 167 115 139 91
Independent Youth Benefit 118 97 65 91 52
Total 73,572 55,342 45,498 29,488 24,285

Note

  1. Numbers of working age clients recorded in SWIFTT as receiving an unemployment-related benefit at the end of June.

Table 3.3 Trends in the length of current spells receiving an unemployment-related benefit, for working age clients

Length of current spell to the end of June Working age clients receiving an unemployment-related benefit1,2
2004 Number 2005 Number 2006 Number 2007 Number 2008 Number
Under 6 months 28,669 23,810 21,374 14,096 14,032
6 months-2 years 23,256 17,510 14,875 9,142 6,403
2-4 years 10,048 6,243 4,063 3,109 2,076
Over 4 years 11,599 7,779 5,186 3,141 1,774
Total 73,572 55,342 45,498 29,488 24,285

Notes

  1. Unemployment-related benefits comprise Unemployment Benefits and Unemployment Benefits - Hardship paid to unemployed people and to people in training, and Independent Youth Benefits.
  2. Numbers of working age clients recorded in SWIFTT as receiving an unemployment-related benefit at the end of June.

Table 8.1 shows trends since 1940 in the number of clients receiving an unemployment-related benefit other than an Independent Youth Benefit. This table also shows trends since 1991 in the number of people receiving an Independent Youth Benefit.


Trends in the proportion of working age people receiving an unemployment-related benefit

The proportion of all working age people in the New Zealand population who were receiving an unemployment-related benefit at the end of June each year has decreased since 2004 (see figure 3.1). This reflects the economic, policy and operational factors outlined earlier.

Since 2004, 18-24 year olds and 60-64 year olds have been more likely than other age groups to be receiving an unemployment-related benefit. This reflects in part the relative difficulty encountered by 18-24 year olds in making an initial transition into the labour market, and by 60-64 year olds in obtaining and retaining paid work. These age groups have, however, experienced the steepest falls in the proportion receiving unemployment-related benefits (see figure 3.1). This reflects a focus by Work and Income on placing young people into work, and numbers of cancellations of these benefits by 60-64 year olds which exceed numbers of benefits granted.

figure 3.1 Trends in the proportion of working age people receiving an unemployment-related benefit,1 by age

Trends in the proportion of working aged people receiving an unemployment-related benefit, by age.

Notes

  1. Unemployment-related benefits comprise Unemployment Benefits and Unemployment Benefits - Hardship paid to unemployed people and to people in training, and Independent Youth Benefits.
  2. Proportion shows:
    1. number in age group who are recorded in SWIFTT as receiving an unemployment-related benefit at the end of June, divided by
    2. Statistics New Zealand final estimate of the resident population in age group at the end of June.

See table A3.4 for a summary of the SWIFTT data underlying figure 3.1.


Trends in the proportion of 16–17 year olds receiving an Independent Youth Benefit

The proportion of all 16–17 year olds in the New Zealand population who were receiving an Independent Youth Benefit at the end of June each year has remained stable over the last two years, after decreasing over the previous three years (see figure 3.2). The flattening over the last year reflects a combination of a slowing fall in numbers of 16–17 year olds receiving Independent Youth Benefits between 2007 and 2008 and a small decrease over the same period in the number of 16–17 year olds in the population.

figure 3.2 Trends in the proportion of 16–17 year olds receiving an Independent Youth Benefit

Trends in the proportion of 16-17 year olds receiving an Independent Youth Benefit.

Note

  1. Proportion shows:
    1. number of 16–17 year olds recorded in SWIFTT as receiving an Independent Youth Benefit at the end of June, divided by
    2. Statistics New Zealand final estimate of the resident population of 16 and 17 year olds at the end of June.

See table A3.5 for a summary of the SWIFTT data underlying figure 3.2.


Trends in unemployment-related benefits granted

Decreases since 2003/2004 in the numbers of unemployment-related benefits granted (see table 3.4) reflect both improved economic conditions and the impact of the operational and policy changes outlined above. Over this period, virtually all of these benefits were granted to working age clients. A large majority of the remainder were Independent Youth Benefits granted to 16–17 year olds.

Since 2003/2004, the proportion of working age clients granted these benefits who had received a main benefit in the previous 12 months has decreased (from 39% to 33%). There was a corresponding rise in the proportion of these clients who had transferred between benefits or districts (from 22% to 29%) (see table 3.4).

Table 3.4 Trends in the length of periods since clients granted an unemployment-related 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
Unemployment-related benefits granted to working age clients1,2
None (clients transferring between benefits or districts, or transferring from the same type of benefit)3,4 30,030 27,451 25,406 24,299 22,123
Under 6 months 26,140 22,482 18,584 15,680 12,525
6-12 months 26,057 22,309 18,216 14,497 12,452
12-18 months 6,322 5,616 5,215 3,923 3,638
18 months-2 years 5,376 4,576 4,514 3,445 2,929
2-4 years 8,985 7,406 7,641 6,274 5,178
Had not received a main benefit in previous 4 years 31,662 25,668 24,369 20,524 17,990
Total granted to working age clients 134,572 115,508 103,945 88,642 76,835
  Unemployment-related benefits granted to other clients1,2
Total granted to other clients 4,878 4,375 3,743 3,030 2,872
  Total unemployment-related benefits1,2
Total 139,450 119,883 107,688 91,672 79,707

Notes

  1. Unemployment-related benefits comprise Unemployment Benefits and Unemployment Benefits - Hardship granted to unemployed people and to people in training, and Independent Youth Benefits.
  2. Numbers of successful applications for unemployment-related benefits recorded in SWIFTT during years ended June.
  3. Includes only a minority of transfers of benefits between districts. Most such transfers are accomplished without cancelling and re-granting benefits.
  4. Transfers from the same type of benefit may occur when clients receiving hardship assistance become eligible for statutory benefits (eg a transfer from an Unemployment Benefit - Hardship to an Unemployment 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).

Since 2003/2004, the proportion of these clients who were unemployed (rather than being in training or students in hardship) decreased (from 78% to 73%) (see table 3.5).

Table 3.5 Trends in the types of unemployment-related benefit granted to working age clients

Type of unemployment-related benefit granted Unemployment-related benefits granted to working age clients1
2003/2004 Number 2004/2005 Number 2005/2006 Number 2006/2007 Number 2007/2008 Number
Unemployment Benefits and Unemployment Benefits - Hardship paid to unemployed people 105,594 90,790 80,941 65,736 56,094
Unemployment Benefits and Unemployment Benefits - Hardship paid to people in training 10,024 9,268 10,210 11,965 11,876
Unemployment Benefit - Hardship paid to students 18,954 15,450 12,794 10,941 8,865
Total 134,572 115,508 103,945 88,642 76,835

Note

  1. Numbers of successful applications by working age clients for unemployment-related benefits recorded in SWIFTT during years ended June.

Trends in cancellations of unemployment-related benefits

Decreases since 2003/2004 in the number of unemployment-related benefits cancelled (see table 3.6) reflect decreases in the use of these benefits. Virtually all of these cancellations were by working age clients, with a large majority of the remainder being Independent Youth Benefits cancelled by 16–17 year olds.

Since 2005/2006, the proportion of working age clients cancelling unemployment-related benefits who entered paid work has decreased slightly (from 42% to 38%), with a corresponding increase in the proportion transferring to another benefit, pension or district (see table 3.6).

Table 3.6 Trends in reasons for clients cancelling unemployment-related benefits

Reason for cancellation 2003/2004 Number 2004/2005 Number 2005/2006 Number 2006/2007 Number 2007/2008 Number
Unemployment-related benefits cancelled by working age clients1,2
Obtained paid work3 71,893 61,611 48,144 43,606 31,680
Transferred to another benefit, pension or district4,5 36,269 29,939 27,569 27,826 24,161
Other3 59,512 45,519 37,602 35,395 26,879
Total cancelled by working age clients 167,674 137,069 113,315 106,827 82,720
  Unemployment-related benefits cancelled by other clients1,2
Total cancelled by other clients 4,962 5,450 4,490 3,662 2,516
  Total unemployment-related benefits cancelled1,2
Total 172,636 142,519 117,805 110,489 85,236

Notes

  1. Unemployment-related benefits comprise Unemployment Benefits and Unemployment Benefits - Hardship paid to unemployed people and to those in training, and Independent Youth Benefits.
  2. Numbers of cancellations of unemployment-related benefits recorded in SWIFTT during years ended June.
  3. Due to recoding of reasons for cancelling main benefits, these figures may not reconcile with those published in previous years.
  4. "Transferred to another benefit [or] pension" includes some transfers from main benefits to New Zealand Superannuation, including those shown previously as "Qualified for New Zealand Superannuation".
  5. "Transferred to another … district" represents cancellations made so a client's benefit can be administered from a different Work and Income service centre. These changes may reflect a change of address by the client or 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.

Since 2003/2004, the proportion of unemployment-related benefits cancelled by working age clients, which were paid to people in training increased from 6% to 14%. There was a corresponding decrease in the proportion of these benefits which had been paid to other unemployed people (see table 3.7).

Table 3.7 Trends in the types of unemployment-related benefit cancelled by working age clients

Type of unemployment-related benefit cancelled Unemployment-related benefits cancelled by working age clients1
2003/2004 Number 2004/2005 Number 2005/2006 Number 2006/2007 Number 2007/2008 Number
Unemployment Benefits or Unemployment Benefits -Hardship paid to unemployed people 137,976 111,441 90,822 83,991 61,240
Unemployment Benefits or Unemployment Benefits -Hardship paid to people in training 9,823 9,430 8,845 11,227 11,639
Unemployment Benefit - Hardship paid to students 18,956 15,387 12,895 10,971 8,874
Independent Youth Benefit 919 811 753 638 967
Total 167,674 137,069 113,315 106,827 82,720

Note

  1. Numbers of cancellations by working age clients of unemployment-related benefits recorded in SWIFTT during years ended June.

Trends in expenditure on unemployment-related benefits and Emergency Benefits1

Since 1995/1996, annual expenditure on unemployment-related benefits and Emergency Benefits has first peaked, then declined over the last eight years (see table 3.8). This pattern reflects changing use of these benefits associated with both changes in economic conditions and the impact of recent Ministry of Social Development (MSD) initiatives aimed at moving benefit recipients into work.

Table 3.8 Trends in annual expenditure on unemployment-related benefits and Emergency Benefits1

Year ended June Expenditure on unemployment-related benefits and Emergency Benefits2,3,4($m)
1995/1996 1,430
1996/1997 1,517
1997/1998 1,652
1998/1999 1,766
1999/2000 1,766
2000/2001 1,662
2001/2002 1,544
2002/2003 1,408
2003/2004 1,228
2004/2005 960
2005/2006 819
2006/2007 703
2007/2008 532

Notes

  1. Unemployment-related benefits comprise Unemployment Benefits and Unemployment Benefits - Hardship paid to unemployed people and to people in training, and Independent Youth Benefits. Emergency Benefits comprise Emergency Benefits paid to unemployed people or trainees since 1 October 1998 and Emergency Unemployment Benefits paid prior to 1 October 1998.
  2. Expenditure on unemployment-related benefits or Emergency Benefits in years ended June, including expenditure on supplementary benefits provided to recipients of an unemployment-related benefit or an Emergency Benefit.
  3. Expenditure shown is net of taxation, adjusted to payment periods based on a standard 30-day month, and smoothed using a three-month moving average.
  4. 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.

Monthly expenditure on unemployment-related benefits and Emergency Benefits shows strong seasonal increases over the summer months and weaker seasonal increases during winter (see figure 3.3). These patterns reflect seasonal increases in demand for these benefits from:

  • tertiary students registered as job seekers over the summer vacation
  • workers with seasonal jobs (particularly in the agricultural/horticultural and primary processing sectors) who face a lack of work in the off season.

figure 3.3 Trends in monthly expenditure on unemployment-related benefits and Emergency Benefits1

Trends in monthly expenditure on unemployment-related benefits and Emergency Benefits.

Notes

  1. Unemployment-related benefits comprise Unemployment Benefits and Unemployment Benefits - Hardship paid to unemployed people or to trainees, and Independent Youth Benefits. Emergency Benefits comprise Emergency Benefits paid to unemployed people or trainees since 1 October 1998 and Emergency Unemployment Benefits paid prior to 1 October 1998.
  2. Monthly expenditure on unemployment-related benefits and Emergency Benefits, and on supplementary benefits paid to recipients of unemployment-related benefits or Emergency Benefits.
  3. Expenditure shown is net of taxation, adjusted to payment periods based on a standard 30-day month, and smoothed using a three-month moving average.
  4. Expenditure data in this graph differs from, and should not be cited as, MSD's official measure of expenditure on financial assistance provided to clients.

Table 8.2 shows trends since 1940 in expenditure on unemployment-related benefits and Emergency Benefits, including expenditure on supplementary benefits paid to people receiving one of these main benefits.2


1To maintain a consistent expenditure series since 1995/1996, table 3.8 and figure 3.3 include expenditure on Emergency Unemployment Benefits that were available until 1 October 1998 and expenditure on Emergency Benefits paid thereafter.

2 From 1996, expenditure data shown in table 8.2 reflects deductions for debts established and for clients receiving these benefits as well as an overseas pension. The data in table 3.8 and figure 3.3 doesn't reflect these deductions.


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