A group created to evaluate New Zealand’s welfare system has made recommendations which could see a major revamp of the benefit system.
The Welfare Working Group was created by the Government in April 2010 to review New Zealand’s welfare system and identify how to reduce long-term welfare dependency.
The Group’s final report, which is released to the government last Tuesday, has recommended sweeping changes to benefits.
Its key recommendation is to scrap existing benefits, including the Domestic Purposes and Sickness Benefits, and replace them with a Jobseeker Support payment.
Mothers on the Domestic Purposes Benefit would be forced to look for work once their first child turns three and that age limit would be reduced to 14 weeks if a mother had a second child while on the benefit.
Prime Minister John Key says he will ignore the recommendation that parents should look for work when their child was 14 weeks old.
‘’Personally I feel a bit queasy about that. I think that’s a step too far. I think most New Zealanders would think that’s a little on the extreme side,’’ Key was reported saying.
Punishments would also be in place if parents failed to meet their obligations to find work.
The Group proposes benefits to be cut by 25 per cent for first failure, 50 per cent for second failure, 100 per cent for third failure and 13-week stand-down for any further failure.
These changes are designed to prevent people becoming dependent on benefits rather than just using them as a ‘safety net’ when necessary.
“The social and economic costs of the current New Zealand welfare system are unacceptably high and the potential benefits of reform are so significant that fundamental change is needed,” says Welfare Working Group Chair Paula Rebstock.
“There are currently few incentives and little active support for many people reliant on welfare to move into paid work,” she says.
The report states that its recommendations will increase the number of beneficiaries actively looking for work from 37 per cent to 77 per cent.
Many groups are opposed to these changes, one being the Alternative Working Group.
The Alternative Welfare Working Group was set up in June 2010 to look at New Zealand’s welfare system from the perspective of beneficiaries and community groups.
The group has drawn attention to the fact that despite the push to get beneficiaries into work there is a lack of jobs available for these people. They also stress the need to value the work parents do in the home, looking after dependents, as key to our community.
Group Chair Mike O’Brien believes that even if the proposed changes are successful they will fail to lift people out of poverty.
“There is no attention to issues about poverty, or the work of caring for children and dependent relatives,” he says. “Even if their proposals were able to achieve their stated goal of reducing benefit numbers by 100,000 over the next ten years, many will still remain living in poverty.”
The Green Party also oppose the proposed reforms.
“At a time of rising unemployment and double-dip recession, harsh welfare changes will just widen the growing gap between those who have the most and those who need the most,” says Green Party spokesperson Catherine Delahunty.
“We need real job creation, and investment in skills and training for young people, not harsh policies that punish the vulnerable,” she says.
Chair of VicLabour, Rob Carr, agrees with this position.
“The issue with high numbers of beneficiaries is not due to the welfare system but due to a lack of jobs,” he says. “The government should be working harder on ways to create more jobs and up skill New Zealand workers.”
John Key says any changes are unlikely to be in effect by the November 26 election.