What happened to people who left the benefit after National's reforms?

Carmel Sepuloni.
Carmel Sepuloni. Photo credit: Newshub.

In the year ended June 2014, 133,000 people left the benefit. A new report looks into what happened to those people.

A report into people who left the welfare system after National's 2012 reforms has found nearly half returned to a main benefit within 18 months.

Most people who left the benefit in 2013/14 did so for good reason - they entered either work or training. But the report outlines the challenge in getting people into long-term employment. Forty-six percent returned to the benefit within 18 months.

Those most likely to return to a benefit:

  • Lived in regions
  • Were Maori
  • Were young
  • Were male

The Ministry of Social Development report, initiated under the previous Government, reveals low-level training courses are not helping enough people find sustainable employment. Of those who entered training, just a quarter were in employment after 18 months, and 55 percent returned to a benefit at some point within 18 months.

Higher level tertiary study and industry training appeared to help people into more sustainable employment, while those enrolled in level 1-3 qualifications were most likely to return to a benefit.

Welfare Minister Carmel Sepuloni said not enough is being done to support young people into work. "A new approach is required", Ms Sepuloni said.

Savanah Han was on a main benefit for four years. She now works as a chef for Wellington Hospitality, after moving through a work programme that saw her start out as a dish hand.

"I honestly was miserable on the benefit," Ms Han said. The best thing about her job is not being on a benefit any more, she told media.

Her employer, Wellington Hospitality, has signed up to the Government's new Mana in Mahi programme, which will have employers training up young jobseekers who have been on a main benefit for six months or longer. Employers signed up to the scheme are subsidised to the tune of their apprentices' benefit, and receive a lump sum to provide pastoral care for apprentices.

Controversial welfare reforms of the second-term National Government

The National-led Government reformed the welfare system in 2012, saying too many people on benefits are "trapped" in "a life of limited choices, poverty and poor health".

It was the biggest change to the benefit system in 50 years.

The changes increased work obligations for sole-parent beneficiaries, requiring those with children aged over three to look for 20 hours of work a week, and sole parents with children over 14 were required to look for full-time work. The changes also introduced a requirement for sole parents who have another child while on a benefit be available for work after one year.

In 2013, increased case management support was provided.

Compared to 2011, the likelihood of a person leaving a main benefit to enter work during a 12-month period increased from 14.8 percent to 16.1 percent (In 2013/14). The report said for jobseekers, exit rates are "highly correlated" with the health of the labour market.

The reforms were fiercely opposed by Opposition MPs - at the time that was Labour, the Greens, NZ First and Mana.

The new Labour-led Government's own welfare overhaul

Welfare Minister Carmel Sepuloni kicked off a review of the welfare system in May 2018.

The 11-person panel will advise the Government on an overhaul of welfare in New Zealand.

Ms Sepuloni said the review would consider "excessive sanctions" and income inequality.

Labour's confidence and supply agreement with the Green Party promised to "overhaul the welfare system".