Benefit increases put on hold
The Government’s long-awaited Welfare Expert Advisory Group has returned a list of extensive and expensive recommendations to the Government, noting the current system was “unsatisfactory and damaging for too many of the highest need and poorest people”.
Social Development Minister Carmel Sepuloni has adopted some of the measures, at a cost of $286.8 million over the next four years, but the Government has left untouched one of the most costly recommendations: to increase benefit levels by between 12 and 47 percent.
The report was part of Labour’s confidence and supply agreement with the Green Party.
Two changes have already caused controversy. The first will be the repeal of Section 192 of the Social Security Act, which cut benefits for sole parents who do not name the other parent and seek child support from them.
Sepuloni said this would leave 24,000 children better off, with sole parents’ incomes increasing by an average of $34 a week. This change will cost $11.4 million over four years and come into effect on 1 April 2020.
Abatement thresholds for main benefits are also being increased. These are the threshold at which benefits start to be cut off when a beneficiary begins to earn more. This change will benefit around 73,000 individuals and families and cost $97.1 million over four years.
Sepuloni said the change was about catching up with the times.
“This change is about catching up with the times. Abatement thresholds for Jobseeker Support haven’t changed in over 20 years and many people find they are no better off for working, after travel and childcare costs,” she said.
ACT leader David Seymour disagreed with the changes, saying Labour and the Greens were "making it easier for people to remain on welfare which will ensure more people do remain on welfare.”
He also noted that Labour’s 2004 Social Development Minister Steve Maharey had supported sole parents being required to name the other parent.
National’s Louise Upston said her party “disagrees with the bulk of the report”.
She said it “would see fewer obligations imposed on beneficiaries and fewer incentives to get back into work”.
The report’s recommendation for a massive 12 to 47 percent hike in benefit levels has been put on hold.
“We have decided not to implement the report’s recommendations to increase benefit levels by up to 47 percent immediately,” said Sepuloni.
“As we have said, we will be looking at a staged implementation of the report. There are a range of ways to improve people’s financial wellbeing and reduce the number of people on benefits that live in poverty, in line with our commitment to reduce the overall rates of child poverty in New Zealand, and we will be looking at these over the coming years,” she said.