Benefit forecasts highlight need for tougher sanctions, government says

The government says the latest figures forecasting how long beneficiaries stay on welfare underscore the need for tougher sanctions.

The Ministry of Social Development (MSD) analysed benefit data up to September 2023 and compared it to the previous year's forecasts.

Those already on a benefit were expected to get it for a slightly shorter time - 13.4 years instead of 13.6 years.

This forecast was 10.7 years in 2017 when National was last in power.

"These findings show how much of a problem welfare dependency has become in recent years and highlight the urgent need for the government's Welfare that Works reforms to get more people into jobs," Social Development and Employment Minister Louise Upston said.

The total number of people on welfare had increased, but MSD's report said this was to be expected, given Treasury's forecast of weakening economic conditions.

People aged 16-24 years old were also expected to be on the main benefit for less time - 20.4 years instead of 21.3 years.

The total number of young people on welfare had also increased, but MSD again put this down to economic conditions.

Young clients were more likely to have lower skill levels, more casual employment arrangements, and high levels of employment in sectors like the service industry.

MSD's report said youth main benefit numbers tended to recover faster than most other age groups.

The government introduced tougher welfare sanctions and requirements earlier this year.

Speaking about this week's forecasts, Upston said the trend of people spending longer on benefits was now baked into the system and needed to stop.

"This government has greater aspirations for tens of thousands of young New Zealanders than spending roughly half their working-age lives on welfare.

"That is why we have returned clear consequences for job seekers who don't fulfil their benefit obligations to prepare for or find work. It's crucial that young people are taking basic steps to avoid the trap of long-term benefit dependency."

Upston said the coalition had also introduced more early intervention for young beneficiaries through a new phone-based employment case management service, more places for young people to get community job coaching and more regular work seminars.

"The work ahead to address the deep-rooted causes of welfare dependency is considerable, but so is this government's commitment to support New Zealanders' aspirations for a better life through work."

Speaking to Morning Report, Upston blamed the previous government for the statistics, saying its approach was not working.

She said benefit dependency grew, and was way the current government was taking a "far more active" approach with jobseekers to improve their chances and make sure they get support early to interrupt the cycle.

She said welfare was meant to be "safety net, not a drag net".

"I'm unwilling to sit by and see tens of thousands of New Zealanders spend two decades of their future on welfare."

Upston said economic recovery was "job number one" to allow more businesses to have the confidence to take on jobseekers out there.

She said the government was "doing well with that".

Labour responds

Labour's social development spokesperson is criticising the government's punitive approach towards beneficiaries.

Carmel Sepuloni, who is also deputy party leader, told First Up the government is making it out like young people are abusing the system and need to be dealt with.

Sepuloni said when economic conditions are bad, young people are the first to miss out on employment.

She also said Upston needed to read the report properly and look at the risk factors, something the government "continues to ignore".

Such risk factors include economic conditions, time spent in prison, mental heath issues, hospitalisation and previous Oranga Tamariki care.

To create meaningful change, the government needed to really look at the report and address those risk factors, she said.

Sepuloni said the report also did not take into consideration people with long-term disabilities who found getting work - or sustaining it - difficult, or seasonal workers.

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