Benefit Sanctions Increase More Than 50%

Thursday, 18 July 2024, 3:29 pm
Article: RNZ

Susan Edmunds, Money Correspondent

Beneficiaries are feeling the impact of the government's tougher stance - with the number of sanctions issued in the June quarter this year up more than 50 percent on the same time a year ago.

The latest data from the Ministry of Social Development shows that at the end of June, 380,889 people were receiving a main benefit of some kind, up 8.3 percent, or 29,130 people compared to June 2023.

Of those, 113,931 were receiving Jobseeker Support - Work Ready, up 14.8 percent year-on-year.

Economist Shamubeel Eaqub said that was to be expected given the state of the economy and more increases were likely: "It's only just begun."

Northland had the largest proportion of its population on Jobseeker of anywhere in the country, at 10.5 percent.

NZ Council of Trade Unions policy director and economist Craig Renney said he expected numbers to increase steadily from here. Treasury had forecast a total of 47,000 people losing their jobs between when the new government took office and the peak.

Renney said that was likely to be an under-estimate. About a third of those people would be expected to end up on a benefit, he said.

The data also shows an increase in the number of sanctions being applied to benefits, reducing what people are paid.

The government had warned it planned to take a tougher stance on beneficiaries who did not fulfil their work qualifications.

Social Development Minister Louise Upston said from June there would be "work check-ins" for jobseekers who have been on a benefit for at least six months, "particularly young people" to "make sure job seeker beneficiaries are taking appropriate steps to find employment and are receiving the right help".

There were 10,389 sanctions issued in the June quarter, up 3630 or 53.7 percent compared to June 2023.

The main reason for beneficiaries not meeting their work qualifications was not attending appointments including seminar appointments - for 6069 people - and failing to prepare for work, for 3360.

There were also 1797 graduated sanctions, such as a percentage reduction of a benefit, in place in June, an 81.5 percent increase from a year earlier.

Green Party spokesperson for Social Development and Employment Ricardo Menéndez March said benefit sanctions would hurt people already struggling to make ends meet and limit their chances of getting out of poverty.

"This is the result of the Minister for Social Development's directive to sanction more beneficiaries. Louise Upston is more interested in punishing the poor than actually supporting people into meaningful work.

"There is no evidence that benefit sanctions help people get jobs or result in positive outcomes for families struggling to make ends meet. Worse still, the work seminars and meetings that beneficiaries are forced to comply with have not been shown to directly translate into people finding meaningful employment."

Renney said it was a huge increase and could reflect a "new cohort" of beneficiaries who were unfamiliar with the system.

Upston said the government was serious about supporting people into work and wanted to have 50,000 fewer people on Jobseeker Support by 2030.

"Our work is not done, and with Jobseeker numbers forecast to keep rising until the start of 2025, more changes are coming to support people into jobs as we rebuild the economy.

"We are focusing on under-25s because they tend to have less work experience and are at greater risk of getting stuck on welfare for longer. Supporting them now is crucial for enhancing their long-term job prospects.

"It's important that job seekers are also doing everything they can to be as work-ready as possible. The rise in those being sanctioned for not attending appointments and failing to prepare for work is concerning and demonstrates the need for our reset to ensure they know what is expected of them."

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