The Government is cutting $155 million from current services aimed at getting youth and the unemployed into work to help fund its $287.5 million welfare reform support package.

The cuts include $58.8 million in savings from disestablishing the Youth Transition Service, which provided support, training and education to school leavers and currently costs about $12.6 million a year. There will also be $96.4 million in cuts over four years to employment assistance currently offered by Work and Income - that will be cut from $111 million this year to $93 million next year.

Welfare minister Paula Bennett said the savings would be channelled into the new package of support for unemployed job seekers under the welfare reforms - a package for which $287.5 million has been set aside over four years. Of that amount, only $81.5 million is in new funding - the remainder has come from cuts and underspends elsewhere within Social Development.

The funding for support for beneficiaries who face stricter work testing under the welfare reforms will provide about $20 million a year for early childhood education and childcare allowances for solo parents - about half of which will be funded by the Ministry of Education.


It will also include $55 million over four years for Work and Income staff solely dedicated to getting beneficiaries back into work and about $37 million a year in youth services, to provide budgeting and parenting courses, and financial support for young people.

"Youth providers will have unprecedented flexibility to work with disengaged or unemployed young people and teen parents to get them into education or into training," Ms Bennett said.

The Welfare Budget also included about $250,000 a year in a new initiative to provide free long-acting contraception to women on a benefit and their daughters.