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With the red light system of sanctions coming into effect today, the government will double the time it takes to penalise beneficiaries for non-compliance.
Prime Minister Christopher Luxon and Social Development and Employment Minister Louise Upston announced the changes in Auckland after their weekly Cabinet meeting.
They said the cabinet had agreed to a series of reforms, including:
- Extending the period for a beneficiary to fail to perform its obligations from one year to two years
- Recipients of the Jobseeker Support Scheme are required to reapply every six months
- Requires all beneficiaries with a work obligation to have a job seeker file before they can receive benefits
- Half of the benefits will be credited to a payment card, which can only be used to purchase a limited range of essential products and services.
- New community work sanctions require beneficiaries to ‘build skills and confidence’
Upston said the traffic light system in the country September announcement Legislation to expand the system will be introduced in November and come into effect in early 2025.
She said the costs of introducing the traffic light system and reapplying every six months would be paid through the Ministry of Social Development’s baseline.
“Our welfare system was always meant to be a safety net, to catch people if they fall. But over the past few years it has become a dragnet, catching too many people who could work and leaving them dependent on Jobseeker’s Payment for too long,” Upston said.
Louise Upston
photo: RNZ/Samuel Rillstone
“Our Government will not tolerate people who receive Jobseeker Support but refuse to meet their obligations to find work – it’s unfair on hard-working New Zealanders who pay taxes to receive benefits.”
In February, the government Reveals increase in sanctions With the continuous increase of “work check-in” activities.
Volunteer Workshop The welfare policy for job seekers was announced in May and took effect in June Require job seekers to attend seminars Six months later.
The government also Launched a new phone-based case management system In July, it is expected that 4,000 job seekers will be supported.
Announcing the traffic light system before the election, Mr Upston said it would give unemployed people a clearer understanding of their obligations under benefit rules and the consequences if they failed to meet them.
The program consists of three levels:
- Green (Compliant) – Fulfill the obligation to prepare or look for work. No change in benefits
- Orange (some risk) – A first or second breach of an obligation, resulting in additional requirements and support, such as more regular check-ins or attendance at work workshops
- Red (high risk) – A third breach of the obligation may result in a reduction in benefits, suspension of benefits, funds management and/or mandatory community work experience
Upston promised at the time that sanctions that would cut benefits by more than 50% if job seekers have children will also remain in place. Beneficiaries who haven’t received benefits for more than a year will also be eligible for a $1,000 bonus.
She cited a report from the Welfare Expert Advisory Group (WEAG) which claimed that sanctions were effective in encouraging people to move from welfare to work, while a lack of sanctions only increased welfare dependency.
However, this sentence does not appear in the report, and several former members of the group Disagree with UpstonShe said she was referring to a minority view, and that most research shows that increasing sanctions is counterproductive for low-income families.
Working with CheckpointsUpston said that despite The unemployment rate recently rose to its highest level in three years“There are jobs there”.
“But I understand that the labour market is much tougher now than it was under the previous government. What we really want to see is that people are taking steps to improve their chances of finding a job. If you can’t find a job, it’s not a penalty, it’s that you don’t take steps and take your work obligations seriously.
“For some people, their connection to MSD might mean they have to do some retraining, they might need to upskill, so part of this more proactive welfare system is to have more connection to MSD and they can get training and opportunities that will improve their chances of getting a job.”
But Labour said the government was more interested in throwing beneficiaries into a hole than helping them get back into work.
Leader Chris Hipkins said the sanctions would keep people on benefits longer and would push more children into poverty.
He said the government should focus on creating jobs so that people can find good jobs, high-paying jobs, and sanctions will not allow people to find jobs if there are no jobs to do.
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