Annual test catches out thousands on welfare

More than 2000 people were in work and did not reapply. Photo / Thinkstock

The Government is looking at new ways to monitor beneficiaries who may be conning the system after a simple test found 11 per cent of those on an unemployment benefit last September are now no longer eligible.

Prime Minister John Key announced yesterday that a new requirement for unemployment beneficiaries, implemented in September, had already seen 7400 people go off the dole, saving the taxpayer $6 million to the end of March. A further $3.5 million in savings is expected by October.

The change requires unemployment beneficiaries to reapply for the benefit every 12 months to ensure they are still eligible.

"There are 7400 people who are not on a benefit who otherwise would have been, had it not been for this test," Mr Key said.

In September 2010, when the test was brought in, there were 65,281 unemployment beneficiaries, meaning the change had seen about 11 per cent come off the dole - although that proportion should be seen in the context of the many factors that impact the number of people on an unemployment benefit.

Of the 7400, about half did not reapply, more than 2000 had reapplied but had found work, and 1400 had either left the country, were studying, or failed the work test.

Asked if the high number of people caught by the test indicated the Government was not monitoring the system very well, Mr Key said: "That's a question we need to look at." One option could be to have unemployment beneficiaries reapply every six months.

The Government is considering a report from the Welfare Working Group and will announce its proposals before the election.

Mr Key said it could be fraudulent to apply for a benefit if you were not eligible, and he assumed all relevant cases would be prosecuted.

He did not believe people who were still eligible had simply not reapplied. "If they're in need of a benefit, given that their benefit would cease if they don't reapply, they are certainly going to notice that.

"The message is that if you are no longer eligible for a benefit because you're working, you've left the country, because you've been conning the system, then you shouldn't be getting one."

The PM said the test was a "stunning result for the taxpayer".

"They are now no longer paying the better part of $10 million to fund these people."

Another test, requiring solo parents on the domestic purposes benefit with children over 6 years old to look for part-time work, had seen the number of people off the DPB and into work increase by 20 per cent, said Social Development Minister Paula Bennett.

$6 MILLION SAVED

* 7400 people have come off the unemployment benefit since changes in September requiring beneficiaries to reapply every 12 months, saving the government $6 million to the end of March.
* About half did not reapply, more than 2000 were in work, and 1400 had either left the country, were studying or failed the work test.
* 65,281 people were on an unemployment benefit in Sept 2010, down to 57,119 in July 2011.