Government says incentive bringing DPB fall

David Benson-Pope

The number of people on domestic purposes benefits is creeping down and the Government is crediting its in-work incentive payment.

September benefit figures show DPB figures fell last month by 265.

The figures are due for release on Monday but were obtained yesterday from the National Party.

Social Development and Employment Minister David Benson-Pope told Radio New Zealand on Thursday: "DPB is coming down, probably - not quite sure yet, but probably - because of the in-work payment that's part of the Working for Families."

He told Mary Wilson on Checkpoint that numbers on the benefit "came down 10,000 in the last month" but his press secretary yesterday acknowledged this was not right.

"Quite simply, the minister made a mistake," said Julia Craven.

The in-work payment, which came into force on April 1, pays families with children an extra $60 a week provided that sole parents work at least 20 hours a week or couples work at least 30 hours between them.

The payment gives a big incentive to work longer hours for sole parents who were previously working fewer than 20 hours a week to avoid having their benefits cut.

And this is showing up in a drop in the total of working-age parents on the DPB from 103,362 in March to 100,579 last month. The total looks poised to drop below 100,000 soon for the first time since 1994.

DPB numbers had been dropping slightly even before April 1 because of the buoyant job market, which has seen unemployment numbers plunge by almost 75 per cent in the past six years.

But from March to September last year, when unemployment beneficiaries dropped by 3305, those on the DPB still rose by 10.

In the same period this year those on the dole dropped by only 1432 while DPB numbers fell by 2783.

Over the next year the Government plans to push more sole parents into work through developing plans to get back to work, undertaking "a work-related activity or programme" if required by the plan, and other activities if required "to improve his or her work-readiness and prospects for employment".

However, it has stopped short of threatening to cut benefits for sole parents who don't comply with their plans.

Benefit cuts will be imposed as penalties only for people on sickness and invalid benefits and on couples with children, as well as on single people and others who face such penalties already.