Hon Louise Upston
Minister for Social Development and Employment

Two more non-financial benefit sanctions will be added to MSD’s Traffic Light System to drive economic growth by incentivising more job seekers to enter the workforce, Social Development and Employment Minister Louise Upston says.

“Our economy is stronger when more people are in work, and as we look to unleash economic growth, it’s important that as many Kiwis as possible share in the benefits.

“It's important that beneficiaries who can work are taking reasonable steps to re-enter the workforce or remain work-ready, and that consequences exist for those who don’t.

“Today I’m announcing the Government’s intention to add two more non-financial sanctions with a strong focus on work to the Traffic Light System. They are:

• Report Job Search – where job seekers will be required to perform a minimum of three job-search activities every week for four weeks and report back to MSD on this. This sanction will support increased accountability for beneficiaries who are meant to be looking for work.
• Upskilling – where job seekers will be required to attend and participate, to MSD’s satisfaction, in one or more employment-related training courses or programmes for a minimum of five hours per week over a four-week period. This sanction will support beneficiaries with building the skills they need to get into work.

“These new sanctions will ensure there is accountability in the welfare system for those who aren’t taking reasonable steps to seek employment, while also recognising that reducing benefits isn’t the answer for everyone.

“These sanctions are in addition to the new Money Management and Community Work Experience sanctions that will come into force later in the year.

“We’re gearing up the welfare system to make the most of the forecast improvement in economic growth in the coming years by providing MSD with the tools and focus to reduce welfare dependency and support more people into work.

“Our approach has already shown signs of early success with more than 33,000 people moving off Jobseeker into work between July and December, a 22 per cent increase on the same period in 2023. This coincided with about 15,600 more benefit sanctions being issued during that period – an increase of 126 per cent.

“It’s clear that returning consequences for job seekers is having a positive impact by getting more people off welfare and into jobs.”

Notes:

Non-financial sanctions provide an alternative to financial penalties for first-time obligation failures for some job seekers, allowing them to continue receiving their full benefit payment while under sanction.

The legislative change required for these new non-financial sanctions will be included in the Social Security Amendment Bill, which is currently before Parliament.

Those sanctioned will also be required to provide evidence of their activities at the end of their sanction to return to ‘green’ in the Traffic Light System.

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