Editorial: Reforms aim to break welfare cycle

In 2011, 4300 babies were born to mothers on the benefit. Photo / Paul Estcourt

Nothing arouses popular ire quite as much as the possibility solo mothers can have more babies on the domestic purposes benefit. Last year, 4300 babies were born to women on the benefit, a small proportion of the 220,000 children of beneficiaries, but it ought to be discouraged. The Government has gone as far as it could in the benefit reforms announced on Monday, requiring women who have another child while on a benefit to be available for work one year after the birth.

If that seems cruel to the child, Social Development Minister Paula Bennett will point out that it is standard practice among non-beneficiaries today. Working women often put their babies in daycare well within a year. Sometimes they do so in the interests of a career, sometimes to sustain the household finances when parental leave expires. Women without a partner might not be as well placed to work, even part time, but in those circumstances they should not be having more children. That is the blunt message in the new work requirement.

In too many cases people who have children on a benefit grew up in similar circumstances. Breaking this "cycle of dependency" is the main purpose of the package announced this week. It follows the extensive study of welfare by a working group under economist Paula Rebstock in the Government's first term, though it has not gone quite as far. The working group suggested sole parents should have to look for part-time work when their youngest child reaches age 3, and full-time work when the child turns 6. The Government has settled on ages 5 and 14.

These are broadly the proposals it put to the electorate last year and received a mandate for. There can not be much argument with the aim to spur beneficiaries into paid work, only with the timing. Opposition parties can point to unemployment, particularly among the young, and ask, where are the jobs? But beneficiaries will not be left entirely to their own resources. Work and Income staff will be expected to support their search. The beneficiary's obligation is to be available and take reasonable opportunities.

The most valuable part of the package may be the help and supervision promised to teenage parents, aged 16-18, and unemployed school leavers aged 16 and 17. They will receive part of their benefit as direct payments of rent and power bills and a debit card for approved living costs. If they are enrolled in a training or budgeting course they will receive $10 extra a week, and another $10 a week if they are in a parenting course.

Far from cutting welfare this time, National says it is putting in an extra $130 million a year in the hope that this will save $1 billion in four years. It is banking on 46,000 fewer beneficiaries by the end of that period, a good deal better than the 20,000 reduction forecast by the Treasury on an expected economic recovery. The tougher work-seeking requirements are the first of a planned two-stage reform. A second piece of legislation in July will reclassify - yet again - the various benefits. In place of the unemployment benefit, sickness benefit, DPB and the rest, there will be three catagories: jobseekers of all sorts, sole parents with children under 14, and those not able to work.

This seems a pointless exercise. Every beneficiary's circumstances are slightly different and the task of treating them all consistently will always be elusive. Officials would do better to stick to the familiar categories and avoid confusion. They will have enough to do implementing the incentives. If they can get all able-bodied beneficiaries looking towards their eventual self-support, they will be doing well.