'Huge increase' expected in people seeking benefits for first time

Benefit applications are set to increase.

By Sarah Robson of RNZ

With unemployment expected to grow, beneficiary advocates say major changes to the welfare system are needed in tomorrow's Budget.

Since February, 40,000 more people have ended up on the benefit, and that number will only increase in the coming weeks and months.

On Auckland's North Shore, Beneficiaries Advocacy and Information Service manager Karen Pattie said there had been more people who had just lost their jobs and seeking help over the past few days.

Most of them had never been on a benefit before, she said.

"They don't have client numbers, they don't even know what a benefit is about or how to get started," Pattie said.

"Those are the ones that I should imagine we will see a huge increase in over the next few weeks."

Pattie said those people would be facing a huge drop in income.

"If you're lucky you can buy your groceries, and there's just not enough to pay the rents that we're paying, and to pay the power that we're paying, and the water and everything else," Pattie said.

"Anything else on top of that is just not going to happen if you're living on a benefit."

Child Poverty Action Group economics spokesperson Susan St John said now was the right time for the government to fix the welfare system once and for all.

"If they're not fixed now, one has to ask, will they ever be fixed? As we get more and more middle income families needing to access benefits, the flaws in the system will become more and more apparent."

One of those flaws was the fact benefits were not granted on an individual basis, St John said.

She said people who lose their jobs should still be entitled to some income, even if their partner was still working.

"If your partner is earning, then you're likely not to be entitled to anything. That means that for many two-income families, the loss of one income will be quite devastating."

Individualising benefits was one of the recommendations of the Welfare Expert Advisory Group - but it is yet to be actioned by the government.

In March, in response to Covid-19, the government permanently increased benefits by $25 a week and doubled the winter energy payment for 2020.

But St John said further benefit increases were needed, so people did not have to rely on food grants and other hardship payments to get by.

"This is simply going to overwhelm the capacity of the welfare system as we see more and more families needing to access these payments just to survive and then spilling out into the food bank, social service sector," she said.

"All that excess demand, simply because people will not have enough money to see them through."

Salvation Army analyst and lawyer Ronji Tanielu said radical changes were needed in the Budget.

"We entered this lockdown with some huge gaps in the welfare system and income support and those have just been magnified during the crisis."

The government could not rely on old ideas to fix long-term problems, Tanielu said.

More could be done to match out-of-work migrants with industries crying out for staff, he said, and if they could not find work, they should be granted temporary access to benefits.

Tanielu said there needed to be more support for lower-paid workers who lose their jobs to upskill and gain new qualifications.

Last week, Minister of Finance Grant Robertson acknowledged it was inevitable unemployment would rise, but the government would be doing what it could to cushion the blow.