Beneficiaries who fail a drug test required for a job application, or who refuse to apply for a drug-tested job, will be given 30 days to come clean or their benefit will be cut in half, Social Development Minister Paula Bennett says.
A second failure could lead to someone's benefit being cancelled altogether.
These further details of the government's Election 2011 welfare policy follow comments from Finance Minister Bill English in June, when he raised the question of whether beneficiaries should be drug-tested before being allowed to receive a benefit.
English said that, from his experience, many of the unemployed youth in his Clutha/Southland electorate could get jobs at the freezing works or in forestry if only they could pass a drugs test, "which makes you wonder whether we should have a drugs test for putting people on [the] benefit."
The next day, Prime Minister John Key said that while English raised a good point about youth not entering employment because they would not pass a drug test, the government was not looking at drug tests as part of a benefit application.
The new rules
On Tuesday morning Bennett said around 40% of the jobs listed at Work and Income required drug tests
"Those on benefits with full or part-time work obligations will be sanctioned if they refuse job opportunities which require a drug test or if they fail a test," Bennett said in a media release.
"Work and Income will reimburse employers for test failures and those who fail a test will have to pay back the cost out of their benefit," Bennett said.
People would be given a warning and reasonable period of time to stop using drugs before having to take another drug test.
"But further failures will result in benefit reduction and possible cancellation," Bennett said.
"Where people fail a drug test or refuse to apply for a drug tested job, they must agree to stop using drugs or their benefit will be cut by 50%. They will be given 30 days to allow any drugs they have taken to leave their system," she said.
"Where they fail a test or refuse a second time, they will have their benefit suspended until they agree that they will provide a 'clean' drug test within 30 days. If they do not do this their benefit will be cancelled."
People with addictions would be supported to get help with their dependency, while those on some prescribed medications would be exempt, Bennett said. Experts would carry out "robust clinical assessments" to determine whether people were recreational users or had a drug dependency, she said.
The new requirements would come into effect in July 2013.