Govt studies tough US policy for sole parents

Tough American-style programmes to get sole parents back to work are being studied by a Government-appointed working group on New Zealand's welfare system.

Act Party welfare researcher Lindsay Mitchell told a forum organised by the group in Wellington yesterday that New Zealand should learn from American states which set time limits on sole parent benefits to drive parents back to work.

Working group head Paula Rebstock said the group was examining studies of US schemes which showed that the most successful programmes provided sole parents with both work and work-related training.

But OECD economist Willem Adema, in a recorded video presentation from Paris, warned that getting sole parents to work required providing childcare as well as training.

"There is no free lunch in this," he said.

"If you consider a work test, you have to ensure that sufficient investment in good-quality childcare is available for all sole parents and for all parents on income support, and for those sole parents with a very long time outside the labour market you have to invest in their labour market skills."

One of the working group's four terms of reference is "how long-term benefit dependence can be reduced and work outcomes improved, including for sole parents".

Dr Adema said the English-speaking countries of Australia, Britain, Ireland and New Zealand were unusual in having specific welfare benefits for sole parents with no requirement to look for work until the parent's youngest child reaches age 7 (Australia and Britain) or 18 (Ireland and New Zealand).

A bill now before Parliament will require sole parents to look for work here from October as soon as their youngest child turns 6.

In most other developed countries, Dr Adema said, sole parents had to apply for general "social assistance" with the same requirements to seek work as any other unemployed person, regardless of the age of their children.

Mrs Mitchell said New Zealand should look at the experience of the United States because it was the only OECD country with a higher teenage birth rate than this country. Officials estimate that a third of people now on the domestic purposes benefit (DPB) first went on welfare as teenagers.

She said the US replaced its equivalent of the DPB in 1996 with "Temporary Assistance for Needy Families". States were given flexibility on administering it, but they could not use federal funding for anyone who had been on welfare for more than five years.

She said the reforms cut the numbers on the scheme from five million families to two million by 2004.

Ms Rebstock said evaluations by independent agency MDRC (formerly Manpower Demonstration Research Corporation) found the best programmes gave sole parents options for work and work-related training.

"I've been reading their material for as long as I can remember in the last 20 years and it's always interesting," she said. "We can get quite frustrated with the lack of really solid evidence on what works, but other countries are doing it."

FLYING SOLO
* NZ has the second-highest proportion of sole parent families (30 per cent) in the developed world.
* More working-aged women in general are in paid work in NZ (67 per cent) than the OECD average (57 per cent).
* Sole parents are more likely to work than other women in the OECD (69 per cent) because they are work-tested, but in NZ they are less likely than other women to work (54 per cent) because they can stay on benefits.
* NZ's sole parent employment rate is the second-lowest in the OECD.

ON THE WEB:

http://ips.ac.nz/WelfareWorkingGroup/Index.html and www.mdrc.org