The Government is disbanding six programmes aimed at getting people into work and replacing them with one scheme offering up to $21,000 a year in wage subsidies for at-risk youth, or up to $7000 for employers to get a new worker the training required for a job.
Social Development minister Paula Bennett announced that $62 million will be allocated to the new 'Job Streams' package over the next year. The wage subsidies of up to $21,000 would be given for a year and would be available for youth, those on the Domestic Purposes Benefit and on the sickness and invalids' benefit.
It would replace six programmes currently funded out of the $92 million fund for employment assistance, including existing wage subsidy scheme Job Opps and the industry training scheme Straight to Work.
The remaining $30 million would be used to continue funding for foundation training courses such as Limited Service Volunteers and Outward Bound.
Ms Bennett said the existing programmes such as Job Opps were effective, but over time they had become too complex and involved too much red tape for employers.
She said the new scheme allowed for more flexibility - and also allowed Work and Income to provide more funding for those who faced greater difficulties in finding jobs - including those with disabilities, former prison inmates or those who had not worked for a long time.
Ms Bennett said subsidies for such employees would be higher than for young people with skills or experience.
"We will pay more for those who are hard to get into work, and less for those who do not need as much help. So an employer might say they want someone with experience, in which case we would pay no subsidy or only a small one. But in some cases, such as those with disabilities who might just need a chance to prove themselves, we will almost be paying the full salary for that person for a year."
Council for Trade Unions Secretary Peter Conway said there was a need for flexibility in the subsidies provided to get the unemployed into work, but said it needed to be on a larger scale rather than simply repackaging existing schemes, especially with stricter work-testing requirements coming in for those on benefits.
Ms Bennett said the $21,000 figure was higher than any current scheme. The Skills Investment Subsidy set up under Labour for employers to use for wage subsidies or training of young workers paid up to $16,000 a year. Ms Bennett said there had been a low uptake under that scheme because it carried high administrative burdens.
She said the primary target of the new programme would be young people, but it would also apply to those on the benefit. About 17,000 people had used Job Opps scheme and she expected numbers using the new scheme to be much larger.
The funding would be allocated regionally and Work and Income offices would decide what level of funding would be attached to individual workers when they got jobs.
The other programmes that would go to make way for the new scheme were Skills for Growth, the Skills Investment Subsidy, Regional Contracted Services and Training for Work.
Prime Minister John Key said the number of unemployed youth had dropped from 23,000 to 13,000 over the past two years, but remained a critical issue the Government wanted to address.
He said one of the criticisms of previous programmes was that they were too complex and this simplified them.
"Young people are keen to work, and need someone to give them a helping hand. The Government can take the first step in that, but we need employers to step up as well."
He said the new scheme took the aspects of previous schemes that were proven to work and made it simpler for employers.
A $62 million a year 'Job Streams" package offering:
# Up to $21,000 wage subsidy for those at high risk of staying on a benefit long term, such as the disabled, former prison inmates or those who had not worked before. Employers can use some for training, mentoring or in-work support.
# Up to $7,000 for employers to put a new worker through a training course required for the job.
Six current wage and/or training subsidy programmes:
# Skills for Growth
# Straight to Work
# Job Ops with Training
# Skills Investment Subsidy
# Regional Contracted Services
# Training for Work