The BulletinApril 19, 2024

20,000 more on jobseeker benefits than this time last year


The government’s plan to get 50,000 people off jobseeker support by 2030 has had a rocky start, writes Catherine McGregor in this excerpt from The Bulletin, The Spinoff’s morning news round-up. To receive The Bulletin in full each weekday, sign up here.

Beneficiary numbers are up – and so are sanctions

There are around 20,000 more New Zealanders receiving jobseeker support than this time last year, an 11.6% increase. Overall, main benefit recipients rose by 24,834, or 7.2%, in the year to March. The figures are included in the Ministry of Social Development (MSD)’s latest quarterly benefit fact sheet, which helps paint a picture of how the rapidly tightening labour market is affecting benefit claims.

Getting 50,000 people off jobseeker benefits by 2030 is one of the government’s recently released targets, and social development minister Louise Upston says it will start by ramping up sanctions from June. This week’s report finds the number of beneficiaries sanctioned in March quarter is already 20% higher than a year ago. Upston says she’s pleased that MSD seems to be taking the initiative on its own. “While we would rather see beneficiaries with work obligations comply with these to avoid being sanctioned, it’s good to see MSD utilising all the tools at its disposal to incentivise people into work.”

Fact-checking the government’s ‘24 years on a benefit’ claim

A stat quoted by both Upston and PM Christopher Luxon came under scrutiny this week after the Greens accused the government of using it to mislead the public. The claim that teenagers on a youth payment will spend an average of 24 years of their working lives on a benefit is true, finds the NZ Herald’s Thomas Coughlan (paywalled) – but it applies to just 0.5% of people who receive main benefits. “To use that tiny percentage of beneficiaries to paint a picture of a whole group of people – we’re talking about hundreds of thousands of people who at some point would have relied on income support – is unfair,” says the Greens’ Ricardo Menéndez March. Be that as it may, the overall number of long term beneficiaries is increasing. According to a report on beneficiary trends commissioned by MSD, a “work-ready jobseeker in 2019 was expected to spend an average of 10.8 years of their working lives on Jobseeker. By 2022, that figure had increased to 13 years,” writes Coughlan.

Job cuts may complicate Willis’s social investment plans

Running in tandem with efforts to get people off state benefits is the government’s big plans for social investment. A core philosophy of former National leader Bill English, the data-driven social investment approach involves spending money now to save money later – a tough ask in the midst of all-of-government belt-tightening. Speaking to BusinessDesk’s Greg Hurrell (paywalled), social investment minister Nicola Willis says the plan is to “eat the elephant one bite at a time, which is to say pick some specific things we can demonstrate over the longer run”. Public sector cuts may make her vision harder to achieve, however. Oranga Tamariki has just announced big job cuts, including “perhaps a third of roles at its evidence centre changing or being disestablished”, writes Hurrell. “The evidence centre provides analytics and insights on clients, their families, and the work of Oranga Tamariki, just the type of research and data that successful social investment would depend on.”

NZ falling dangerously behind on aged care, report warns

Another area of concern for the government is aged care, the subject of a report by Health New Zealand Te Whatu Ora which highlights how the country will struggle to service an aging population in the coming decades. The construction of aged care facilities isn’t keeping up with demand, the report says. “Its analysis found if historic building rates continued, there could be a shortage of almost 12,000 aged residential care beds by 2032,” RNZ reports. Residents of different regions can receive dramatically different levels of service. “For example, waiting times for high priority individuals being admitted to an aged residential care facility ranged from 92 days in MidCentral (Manawatū area) to 219 days on the West Coast.” There’s a particular lack of beds for high-needs dementia and psychogeriatric patients, with these people waiting on average six months to move out of a home setting – a highly challenging situation for patients and carers alike.

Keep going!