New data reveals that emergency assistance is getting harder to access – and that benefit sanctions aren’t reducing the number of people on the dole, writes Catherine McGregor in today’s excerpt from The Bulletin.
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Denied at the door
The rate at which emergency food grant applications are being declined has risen by 60% in two years, according to data obtained by The Spinoff’s Lyric Waiwiri-Smith under the Official Information Act. In 2023, 3.96% of food grant applications were declined; by 2025, that figure had risen to 6.33%. Declines are up 66% across all categories of special needs grants. MSD attributes the increase to having “strengthened hardship approvals” by reinstating pre-Covid processes requiring manager sign-off.
But community advocates tell a different story. The rules restrict eligible singles to $200 in food grants over a six-month period. “If you’re over that $200, you pretty much get a straight no these days,” says Kay Bereton of the Beneficiaries and Unwaged Workers Trust, who adds that rejection – and the fear of it – has put many MSD clients off applying at all. “It’s pretty awful being rejected face-to-face,” she says. “It’s so demeaning.” Social development minister Louise Upston says she is confident people experiencing hardship are receiving adequate support.
Nowhere to turn
The emergency housing picture is equally stark, Waiwiri-Smith reports. Data shows far fewer emergency housing grant applications since the gateway was tightened in August 2024, with the decline rate rising from just over 3% in 2023 to nearly 34% in 2025. Spending on emergency housing grants fell from more than $36 million in the September 2024 quarter to $9.64 million in the same period a year later.
These figures confirm the findings of the Sunday Star-Times’ Amelia Wade (paywalled), who reported in September that city missions in Auckland and Christchurch were seeing soaring demand while growing numbers were being turned away. Auckland city missioner Helen Robinson says those in genuine need “are not being met”, and that people appear to be screened out before they even formally apply.
The government declared its target of a 75% reduction in emergency housing placements has been met five years ahead of schedule – but housing providers say the need hasn’t gone away. Last year a report found that Auckland’s unsheltered homeless population had nearly doubled in eight months, and a Ministry of Housing and Urban Development briefing warned that MSD’s declines were “noticeably worsening the homelessness situation”.
Traffic light system questioned
The government’s traffic light sanctions system for jobseekers, introduced in August 2024, has probably not worked – largely because there are not enough jobs for beneficiaries to move into, according to economist Rob Heyes of Infometrics, Talking to Susan Edmunds of RNZ, he notes that the number of people on JobSeeker support has risen since the policy was introduced, from 205,000 in the September 2024 quarter to 218,000 a year later – the opposite of the government’s target of 50,000 fewer by 2030. But also, just 1% of beneficiaries sit in the “red” zone at any time, limiting the policy’s practical reach.
The government, however, points to its own evaluation: social development minister Louise Upston says 90% of clients surveyed found the traffic light system helpful for understanding their obligations, and that 98.4% are meeting them.
Taking from Peter to pay Paul
As covered in the Bulletin last month, a separate controversy has emerged over MSD’s practice of reclaiming supplementary payments from beneficiaries who receive backdated ACC “loss of potential earnings” (LOPE) payments. Many LOPE recipients are survivors of abuse or injury sustained before the age of 18. Last October, the High Court ruled the clawbacks unlawful – but, as Stuff’s Emma Ricketts reports, the government responded not by accepting the ruling, instead introducing retrospective legislation under urgency to continue the practice, leaving nearly 40,000 people facing debts that would otherwise have been wiped.
Labour initially supported the bill, but is now demanding amendments – including exemptions for abuse-in-care survivors and those in financial hardship – after coverage of cases such as Jay Wing, who received a $45,000 LOPE payment only to see almost all of it sent straight back to MSD. The bill is before select committee, with Upston saying she is “open to looking at” Labour’s proposed changes.
