The Government's talking up its welfare response to the COVID-19 pandemic after a new report found the benefit system "responded better than expected" and the number of people coming off the benefit was faster than after the global financial crisis (GFC).
The Ministry of Social Development on Wednesday released its third Benefit System Update report, covering the period between October 2021 and June 2022. It had a specific focus on the impact the COVID-19 pandemic had on the system.
Among its key findings was that while COVID-19 had a "significant impact" on the system from early 2020 with a large increase in the number of people accessing support, the system "responded better than expected".
At the end of the March 2020 quarter, there were 309,995 people on a main benefit. With the emergence of COVID-19 in the community and a national lockdown imposed causing job losses, this quickly rose to 353,440 in the June quarter and was at 389,500 by the end of 2020.
However, it then began trending downwards from January 2021. The number grew slightly at the end of 2021 after another lockdown, before falling again over the start of 2022.
In June 2022, there were 344,500 people on a main benefit.
"Across all main benefits, there were 113,400 exits into work in the year to June 2022, the highest number since 1996. We saw a similarly high number of work exits in the year to June 2021."
The report said the decrease occurred much quicker than following the GFC and was driven by changes in the Jobseeker Support benefit numbers.
By June 2022, there were 23,900 fewer people receiving the Jobseeker Support - Work Ready benefit than in June 2020.
Another report released on Wednesday had a specific focus on youth, which are more vulnerable to significant economic shocks are they are more likely to have lower skill levels, be in more casual employment arrangements and work in sectors like the service industry which are exposed to downturns.
There was an influx of young people entering the system when the pandemic began, but the report found their numbers rapidly decreased through 2021 and early 2022.
"This decrease also occurred at a much faster rate than following the GFC, when high benefit numbers for young people were sustained for a longer period. By June 2022, youth main benefit numbers were closer to pre-COVID-19 levels than was the case for most other age groups."
In a statement, Social Development Minister Carmel Sepuloni said the reports showed that the Government's "fast actions in response to COVID-19" and supporting people into work, training and education had paid off.
"COVID-19 had a significant impact across the benefit system in 2020 and saw a substantial increase in the number of New Zealanders needing support. However, this most recent report shows the system recovered faster than expected, and we did not hit the level of unemployment predicted at the start of the pandemic," Sepuloni said.
"Compared to what happened following the Global Financial Crisis, the report found that this Government has delivered lower unemployment and fewer people on Main Benefits.
She mentioned the Government's Apprenticeship Boost programme, the He Poutama Rangatahi programme to support young Kiwis into employment, education or training, and Mana in Mahi.
"He Poutama Rangatahi has supported nearly 3900 rangatahi into employment, education or training since 2018; Mana in Mahi has supported almost 5800 placements by the end of February 2023; and the Apprenticeship Boost Initiative programme has paid more than 55,800 apprentices to date."
The latest quarterly benefit figures report shows there were 353,904 people on a main benefit in the December 2022 quarter, down from 389,499 in the December 2020 quarter but above the pre-pandemic December 2019 figure of 314,409.
The Government last week announced benefits would rise on April 1 in line with inflation.
In 2019, the Government made changes so annual increases to main benefits are tied to increases in the average wage, which has traditionally risen faster than inflation.
However, inflation rose 7.22 percent in the December quarter while, in comparison, the net average wage rose by 6.24 percent. So Cabinet made the decision to increase it by the higher figure,
For a family on a Jobseeker Support benefit with children, they will see a $40.96 a week increase. A sole parent's Jobseeker Support benefit will jump $31.83.
