A further 3500 young people on welfare could have their spending tightly controlled by an adult supervisor if National is re-elected.

Social Development Minister Paula Bennett said yesterday that the Youth Service payment card, money management and mentoring regime would be extended from under-18s to under-20s, at a cost of $10 million to $15 million.

Any beneficiary aged under 20 who was likely to struggle to get off the dole would be referred to a private organisation which mentored them and tried to get them into education or training courses.

Under the Youth Service regime, spending was also tightly controlled. Essential costs such as rent and power were paid directly by Work and Income and, other than a small allowance, their benefit was loaded on to a payment card which could be used only to buy necessities such as groceries.


Ms Bennett said extending the regime would affect 5700 people. Around 3500 of them were likely to be referred to a community provider for "intensive support".

Ms Bennett said nearly half of the 5700 beneficiaries aged 18 and 19 had been on the dole for more than six months.

"That's a clear signal that they're not getting the sort of wrap-around support they need," she said.

Teenagers who were more "self-motivated" and unlikely to remain on the benefit for a long period would continue to work with Work and Income to find a job and would not be referred to a provider.