The government will double how long breaches count against beneficiaries, as the traffic light system for sanctions comes into effect today.
Prime Minister Christopher Luxon and Social Development and Employment Minister Louise Upston announced the changes in Auckland after the weekly Cabinet meeting.
They said Cabinet had agreed to a range of changes including:
- Extending the period a failure to meet obligations counts against a beneficiary from one year to two years
- Requiring Jobseeker Support recipients to reapply every six months
- Requiring all beneficiaries with work obligations to have a jobseeker profile before receiving a benefit
- Half of the benefit will go onto a payment card that can only be used for a limited range of essential products and services
- A new community work sanction requiring beneficiaries to "build skills and confidence"
Upston said the traffic light system National announced in September would also be in effect from today. Legislation to expand the system would be introduced by November and come into force early 2025.
Costs arising from introducing the traffic light system and six-monthly reapplications would be met through the Ministry of Social Development's baselines, she said.
"Our welfare system will always be a safety net that catches people if they fall. But in the past few years it has become a drag net that has captured too many people who can work and allowed them to languish on Jobseeker Support for too long," Upston said.
Louise Upston Photo: RNZ / Samuel Rillstone
"Our government will not tolerate people who accept the Jobseeker Support benefit but refuse to uphold their obligation to seek a job - it is not fair on hardworking Kiwis who pay their taxes that go towards those benefit payments."
The government in February revealed increased use of sanctions with "work check-ins" ramping up.
Compulsory work seminars for job-seeking beneficiaries were announced in May, and in June changes took effect requiring jobseekers to attend a seminar after six months.
The government also launched a new phone-based case management system in July, estimating it would support 4000 more Jobseekers.
When announcing the traffic light system ahead of the election, Upston said it would make obligations under the benefit clearer to unemployed people and the consequences they would face if they failed to meet them.
The scheme included three levels:
- Green (compliant) - Meeting obligations to prepare or find work. No change to benefit
- Orange (some risk) - First or second breach of obligations, resulting in additional requirements and support like more regular check-ins or attendance at job workshops
- Red (high risk) - A third breach of obligations, with consequences including benefit reductions, benefit suspension, money management and/or mandatory community work experience
Upston at the time promised a rule preventing sanctions from cutting benefit pay by more than 50 percent if jobseekers had children would also remain in place. Beneficiaries who remained off the benefit for more than a year would also become eligible for a $1000 bonus.
She had pointed to a report from the Welfare Expert Advisory Group (WEAG), claiming it said sanctions could be effective in encouraging movement from benefits and into work, and a lack of sanctions only entrenched benefit dependency.
However, that quote did not appear in the report, and several former members of the group disagreed with Upston, saying she was referring to a minority of views while the majority of research showed increasing sanctions was counterproductive for low-income families.
Speaking to Checkpoint, Upston said despite unemployment figures rising to three-year high recently, "there are jobs out there".
"But I appreciate that it's a much tougher labour market than the previous government had. What we do want to see is that people are taking the steps to improve their chances of finding a job. There is no sanction because you can't find a job, it's if you're not taking the steps, not taking your work obligations seriously.
"For some, it might be that their contact with MSD means they have to do some retraining, they might have to upskill, so part of this more active welfare system is they have more contact with MSD and they can be connected with the training and opportunities that will improve their chances of being in work."
But the Labour Party says the government was more interested in kicking beneficiaries when they were down, rather than helping them back into work.
Leader Chris Hipkins said the sanctions would keep people on benefits for longer, and would keep more children in poverty.
He said the government should be focused on creating jobs so people can get into good, well-paid work, and sanctions did not get people into work if there were no jobs for them to go to.
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