Hon Louise Upston
Minister for Social Development and Employment

A new report that forecasts young people on benefits will spend an average of 20 more years relying on welfare underscores the need for the Government’s reforms, Social Development and Employment Minister Louise Upston says.

MSD’s latest Benefit System Insights report, released today, which estimates how many future years different groups of beneficiaries will spend on a main benefit over their lifetimes, found little improvement in these projections between 2022 and 2023 after several years of sustained increases.

The report found the following:

• It estimated that people under the age of 25 on a main benefit would spend an average of about 20 more years on a benefit over their lifetimes – 39 per cent longer than the estimate was under the National Government in 2017.
• People under the age of 25 on Jobseeker Support would spend an average of about 18 more years on a benefit over their lifetimes – 49 per cent longer than in 2017.
• Those under the age of 20 who were receiving a youth benefit would spend an average of about 23 more years on a benefit over their lifetimes – 51 per cent longer than in 2017.
• Jobseeker Support beneficiaries of all ages who were ‘work-ready’ would spend an average of about 13 more years on a benefit over their lifetimes – 40 per cent longer than in 2017.

“These findings show how much of a problem welfare dependency has become in recent years and highlight the urgent need for the Government’s Welfare that Works reforms to get more people into jobs,” Louise Upston says.

“The trend of people spending longer on benefits set in well before the Covid pandemic and was baked in by the time the previous government left office.

“Our benefit system should be a safety net, not a dragnet that keeps people down. It must be a genuine pathway to employment for those who can work.

“This Government has greater aspirations for tens of thousands of young New Zealanders than spending roughly half their working-age lives on welfare.

“That is why we have returned clear consequences for job seekers who don't fulfil their benefit obligations to prepare for or find work. It’s crucial that young people are taking basic steps to avoid the trap of long-term benefit dependency.

“We have also introduced more early intervention for young beneficiaries through a new phone-based employment case management service, 2100 more places for young people to get community job coaching, more regular work seminars, and a traffic light system to help them stay on track with their obligations.

“The work ahead to address the deep-rooted causes of welfare dependency is considerable, but so is this Government’s commitment to support New Zealanders’ aspirations for a better life through work.”

Notes:

• A copy of the Benefit System Insights report is attached
• The projections in the report are based on data available up to 30 September 2023

© Scoop Media