Penalties imposed on welfare beneficiaries triple

The number of people who have faced benefit cuts for failing work-tests has tripled in three years, and the harshest penalty is being imposed far more often.

Figures released to the Herald under the Official Information Act reveal that 7080 beneficiaries failed work-tests in 2002 and were suspended.

That number jumped to 21,027 last year, the Ministry of Social Development said.

Beneficiaries facing the stiffest sanction - a 13-week suspension - soared from 100 to 989 in the same period.

The biggest increases happened last year.

Ministry chief executive Peter Hughes said this was a result of a Jobs Jolt initiative, which automated the work-test process when introduced in February 2004.

Work tests are only mandatory for those on unemployment benefits and the partners of people on sickness and invalids benefits.

Those on the DPB also face benefit cuts if they fail to meet different obligations, but the ministry could not yesterday supply those additional figures.

The regime has been attacked by the Green Party which has accused the Government of trying to fend off election-year claims that it is soft on welfare.

But Act deputy leader Muriel Newman yesterday said the sanctions were softer than before.

Work-test sanctions result from failure to meet a number of job seeker agreement requirements, such as failing to attend community work, a job interview or training course.

If the client fails to comply, he or she gets five days to explain why and, if no sufficient reason is provided, the work test is failed.

The beneficiary then gets five days' notice before a benefit is stopped.

Under initial grade one or two sanctions, the benefit is suspended until the original or a new specified requirement is met.

The third failure of a work test earns a grade three sanction - the 13-week benefit cancellation.

Green MP Sue Bradford said the increase in sanctions was "alarming", particularly the rise in grade three sanctions.

"People in that situation tend to be really struggling already. So you impose a 13-week stand-down on them they are reduced to total poverty. Once that goes on for more than a few weeks there's only one way of surviving and that's crime.

"This whole drive is part of ... Labour's 'trying to get beneficiaries back into work at all costs'.

"They're trying to show National and Act they're on a par with them in terms of the extent to which they harass beneficiaries."

Dr Newman said the data was unreliable.

"What we know is that they have totally changed the sanction system and it appears to me the two sets of figures aren't comparable.

"If you look at everything else Labour has done, it's inconceivable that they have actually brought in a sanction system that is harsher.

"All the other changes ... have made welfare softer."

Wellington beneficiaries advocate Richard Noble said the figures tallied with anecdotal evidence.

Low unemployment and more intensive case management meant Work and Income staff were targeting those less likely to get jobs and previously less likely to get work-tested.

Some beneficiaries were itinerant and others had addiction or socialisation problems which may mean they were not effectively "able" to work.

He believed Work and Income should consider placing such people, who might not technically meet sickness beneficiary requirements, into a new benefit category that was not work-tested.

How penalties work

* Beneficiaries must pass a work test. They fail if they do not meet compulsory requirements such as attending community work, a job interview or a training course.
* If they fail once or twice their benefits can be suspended until requirements are met.
* If they fail a third time their benefits are cancelled for 13 weeks.
Note: The test applies to those on unemployment benefits and the partners of people on sickness and invalids benefits. Rules for the DPB test are different.