Hon Paula Bennett
Minister for Social Development

24 May 2012

$287.5m up-front investment in welfare reforms

The Government is making an up-front investment of $287.5 million over the next four years in the first phase of its welfare reforms, Social Development Minister Paula Bennett says.

“We always said welfare reform would cost more up-front to save over the longer term and that translates to more support to help people off welfare into work,” Mrs Bennett says.

The phase 1 funding includes $81.5 million of additional money, with the remainder reprioritised from within Social Development spending.

The second phase of reforms will be funded in Budget 2013. The entire welfare package is expected to cost at least $520 million and is expected to save $1 billion over four years.

“Added to the current $7.6 billion annual cost of welfare, this extra investment provides support – such as childcare and staff – that is vital to the reforms,” Mrs Bennett says.

Budget 2012 includes:

• $80 million over four years for early childhood education childcare and the Guaranteed Childcare Assistance Payment.
• $55.1 million over four years for 155 dedicated Work and Income staff to support job seekers and sole parents into work.
• $1 million over four years for financial assistance to access long-acting reversible contraception.
• $1.1 million over four years for Work and Income’s board.
• $148.8 million over four years for youth services, including wrap-around support.

Funding for youth services will provide budgeting and parenting courses, milestone payments to providers and wrap-around support, as well as financial assistance to young people.

“Youth providers will have unprecedented flexibility to work with disengaged or unemployed young people and teen parents to get them into education, attaining NCEA level 2, or into training,” Mrs Bennett says.

Financial assistance for contraception is included in Budget 2012.

“We know some on welfare find cost is a barrier to accessing long-acting reversible contraception, so we’re removing that barrier.”

The Government’s wider welfare changes also include:

• A new work-focused benefit called Jobseeker Support.
• Part-time work expectation for sole parents with children aged over five.
• Fulltime work expectation for sole parents with children aged over 14.
• A new Sole Parent Support benefit to replace the DPB.
• A new Supported Living Payment to replace the Invalid’s Benefit and DPB care of sick and infirm.
• An investment-based approach to the benefit system.

“The investment approach tailors support to get the best results, based on an individual’s likelihood of becoming long-term welfare dependent,” Mrs Bennett says.

A new Work and Income board, led by Paula Rebstock, will oversee the changes.

The first bill in the National-led Government’s comprehensive programme of welfare reform is before select committee and, if passed, will take effect from July.

A second bill containing an overhaul of benefit categories will be introduced this year and, if passed, will take effect from mid-2013.

ENDS

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