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Home / New Zealand

Number of sole parents on benefits drops to record level

Simon Collins
By Simon Collins
Reporter·NZ Herald·
17 Oct, 2014 04:48 AM5 mins to read

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Photo / Thinkstock

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New Zealand's roll call of sole parents on benefits has dropped again - this time to the lowest level in a quarter-century.

Figures released by new Social Development Minister Anne Tolley show numbers on the sole parent benefit fell by 7110, or 8.9 per cent, in the year to September, following a similar drop of 7268 the year before.

The 72,589 people now on the benefit represent the lowest tally since 1987, when there were 69,146 people on the old domestic purposes benefit (DPB).

The rules were changed in July last year to shift about 20,000 sole parents with no children under 14 on to the new jobseeker support benefit. But even adding 20,000 to the latest total, the number of sole parents on benefits is the lowest since there were 85,615 on the DPB in 1989 - 25 years ago.

Mrs Tolley said the Government's welfare reforms "have been deliberately targeted at sole parents by investing millions into intensive support and training, as well as help with study and childcare".

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"Sole parents, particularly those who go on benefit in their teens, have the highest lifetime costs of any group on welfare and are more likely to stay on benefit the longest, so this reduction is especially pleasing," she said.

However, Karen Pattie of the Beneficiaries Advocacy and Information Service said the reduction was partly due to tough sanctions on beneficiaries under the new regime. A Child Poverty Action Group report last month found that 4836 beneficiaries with children had their benefits suspended for travelling overseas in the first six and a half months after the new rules took effect in July last year.

"I have quite a few sole parents who have been sanctioned for various reasons. At that point they would be off the benefit," she said.

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Most, however, may still be counted because beneficiaries with children are only supposed to have their benefits halved, not stopped altogether, if they fail to attend interviews or breach other benefit requirements.

Overall, the total numbers aged 18 to 64 on all welfare benefits dropped by 3.3 per cent in the year to September, to 294,321, or from 11.2 per cent to 10.7 per cent of the working-aged population - the lowest since 2008, when it was just under 10 per cent.

September numbers peaked in 2010 at 338,212, or 12.7 per cent of the working-aged population. They fell by 2.9 per cent in the year to September 2011, by a further 2.3 per cent to September 2012, and by a whopping 5.2 per cent in the year to September 2013 which included the new benefit rules from July of that year.

The 3.3 per cent decline in the year since then represents a slowdown in the rate of improvement, but is still a faster rate of improvement than in the two years before last year's benefit changes.

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The biggest reductions since the September 2010 peak have been in both jobseeker support, down 18.3 per cent to 123,133, and sole parent support, down 18.1 per cent to 72,589.

Numbers on the supported living payment (formerly the invalid's benefit) crept up by 2 per cent to 93,852, reflecting the gradually ageing population.

But there was a dramatic 42 per cent drop in numbers on the two benefits for teenagers, youth payment and young parent payment, from 2300 in September 2010 to 1335 last month. This group has been targeted since the two new benefits replaced the previous independent youth benefit in July 2012, and young people on the two benefits are now assigned "coaches" to help them get back into education or work.

Canterbury registered by far the biggest decline in overall benefit numbers, down by a third (31.5 per cent) since 2010 from 33,634 to 23,038, as rebuilding work after the earthquakes mopped up almost everyone available to work.

Auckland benefit numbers dropped 17.2 per cent, from 108,370 to 89,742. But benefit rolls fell by less than 10 per cent in most other regions and least of all in Northland (down just 5.2 per cent, from 17,995 to 17,054).

Men did better than women. Male beneficiaries have fallen by 15.3 per cent since September 2010, against an 11.2 per cent decline for women - reflecting the fact that more women receive the sole parent benefit and are less able to get work as the economy recovers.

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Pacific people (benefit numbers down 18.4 per cent since 2010) and Europeans (down 16 per cent) have done much better than Maori (down 7.4 per cent) and Asians and others (down 10.7 per cent).

Most encouragingly, young people have done much better than older people as new jobs have appeared. Numbers of young people aged 18 to 24 on benefits have plunged by 21.5 per cent since 2010, those aged 25 to 39 dropped 17.5 per cent, and those aged 40 to 54 dropped by 10.9 per cent.

The smallest decline in benefit numbers (down 1 per cent since 2010) was for older people aged 55 to 64, reflecting rapid population growth in that age group as the population ages.

On the web: www.msd.govt.nz

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