Jobseeker benefit rules will be hardened under new government policy, with new sanctions and obligations, but not to the extent sought by the Act Party.
Employment Minister Louise Upston unveiled a suite of new policies on Monday afternoon which are intended to push people on jobseekers to find work faster.
The unemployment rate has been climbing steadily since 2021 and reached 4.6%, or 143,000 people, in the June quarter. Jobseeker numbers have also climbed, partly due to the weaker job market, but also because of a greater emphasis on making eligible people able to access support and less strict use of sanctions.
After the pandemic, the number of people being sanctioned for not showing up to an appointment dropped by 75%. This was the most common kind of sanction.
Sanctions for jobseekers who failed to prepare for work stayed relatively steady, while those refusing work also dropped significantly.
National and its coalition partners want to reverse this trend and make people work harder for their benefits. They hope to have 50,000 fewer people on Jobseeker by 2030, there are currently almost 200,000 in total and 113,000 who are work-ready.
The Ministry of Social Development (MSD) has already been instructed to focus on enforcing obligations and sanctions more strictly, and a handful of new policies have also been announced.
For example, the length of time an obligation failure stays on a person’s record will increase from one year to two years. This increases the chance of a person being kicked off a benefit.
Usually, a first sanction would be a 50% reduction in the benefit payment, a second would result in a complete suspension, and a third would cancel the benefit altogether.
The new policies actually introduce softer penalties for people on benefits that are being case managed or have dependent children. These people may be put on a money management program or required to do community work, instead of having their pay docked.
For those with dependent children, half of their benefit will be paid onto an electronic card which can only be used to buy essential goods. This card already exists for youth support.
Other changes include requiring Jobseekers to reapply for the benefit every six months and have an employment profile ready when applying. There was also additional job coaching and support being made available.
Act Party leader David Seymour welcomed the changes but said the Government, in which he is a senior minister, didn’t go far enough.
He wanted all cash benefits to be time-limited and transferred onto money management cards after a few months.
Ricardo Menéndez March, the Green Party’s employment spokesperson, said the Government was more interested in punishing beneficiaries than ending poverty.
“Compulsory money management only serves to take further agency away from people who simply do not have enough to properly make ends meet and regularly have to get into debt to cover the essentials,” he said in a statement.
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