Benefit numbers show big year-on-year rise: More Jobseekers than when Government formed

There continues to be many more New Zealanders on the Jobseeker benefit than when the Government took office, with the coalition’s target remaining far off.

The number of people remaining on a benefit for longer than a year also remains high, while there’s been a significant increase in the number of sanctions being handed out to beneficiaries not fulfilling their obligations.

Social Development Minister Louise Upston is, however, pointing out some green shoots. Though there are more people on the benefit than this time last year, the number who exited into employment over the past three months is higher than in the March quarter last year.

Upston said she was “encouraged” by some of the figures, but stressed she was taking a “cautious approach as our Government continues to drive for economic and job growth in a challenging global and domestic environment”.

The Ministry of Social Development (MSD) this week released its March-quarter snapshot of benefit figures, revealing the number of New Zealanders on a main benefit is 398,163, up 27,912 or 7.5% compared with this time last year.

That is the most people on a main benefit in the March quarter in at least five years, but is down from the December quarter when there were 409,665 people on a benefit. It’s common for people to drop off the benefit between December and March, with the Government noting the decrease in the past quarter was driven by students returning to study.

Upston highlighted that over the past three months, 23,268 people left a benefit to enter work. That is 2421 or 11.6% more than what was seen in the March 2024 quarter.

The Government has a target for Jobseeker benefit numbers. Photo / Mark Mitchell

However, Jobseeker Support numbers remain high. At the end of March, 209,838 people were on the Jobseeker benefit, up 21,852 or 11.6% on this time last year. It has dropped slightly from the December quarter (when it was 213,321 people), but again, a decrease between December and March is common.

The Jobseeker Support figure is one the Government is tracking carefully as one of its nine public service targets is to reduce the number of people on the Jobseeker Support benefit by 50,000 by 2030 when compared with December 2023.

In the December 2023 quarter, during which the present Government was formed, there were about 190,000 people on the Jobseeker benefit, meaning its goal was to get that down to 140,000 people by 2030.

Last month, the Government published its latest quarterly report on its public service targets. That captured the December benefit numbers and highlighted this target as being “at risk”.

The report blamed “prolonged economic conditions” for increases to Jobseeker numbers, but expected these to decrease “as economic conditions improve” and new “welfare system interventions are embedded in 2025”.

When the targets were first published in April last year, Prime Minister Christopher Luxon said they “are not going to be easy to achieve”. Addressing the welfare target, he said “excuses have to stop”.

Among the Government’s changes to the welfare system is the new traffic light system to make clear beneficiaries’ obligations, more work seminars, and a new phone-based case management service. More sanctions are also being added via legislation in Parliament, including money management and requiring more job search activity and upskilling. Some of these are expected to be active from the end of May.

Prolonged poor economic conditions have been blamed for the increases in benefit numbers. Photo / 123rf

Upston said she was “particularly encouraged by the work of MSD staff over recent months”.

“One of the drivers behind the increased number of people moving into work is MSD’s heightened focus on employment,” the minister said.

“MSD frontline staff are doing a great job engaging proactively with Jobseekers, informing them not only of the obligations and sanctions we’ve introduced under the traffic light system, but also the supports available to help New Zealanders find work. This one-on-one intensive prep for the job market can only help more people back into work.”

However, while Upston said the faster beneficiaries found employment, the better, the number of people staying on a benefit continuously for more than a year has hit a high.

In the March 2025 quarter, there were 291,429 beneficiaries who had spent more than 12 months on a benefit. That’s up from 267,186 when the Government was formed. As a percentage of the overall number of beneficiaries, it’s remained fairly stable.

Reducing beneficiary dependency was a key promise by National in the 2023 election, with the party saying a lack of “clear consequences” under Labour had led it to worsen. This was one of the reasons National promised to introduce more sanctions.

Though many of the new sanctions the Government has announced are yet to come into effect, there has been a sharp rise in the number of sanctions handed out over the past year.

MSD’s document shows 13,485 sanctions were issued over the past three months, an increase of 5976 or 79.6% compared with the number in the March 2024 quarter.

“During the March 2025 quarter, the main reasons for unfulfilled work obligation sanctions were clients not attending appointments, including seminar appointments (9042 sanctions) and failing to prepare for work (3291 sanctions),” it says.

In February last year, Upston wrote to the chief executive of MSD making clear the Government wanted to see all obligations and sanctions applied.

“If jobseekers fail to attend job interviews, to complete their pre-employment tasks, or to take work that is available, then there needs to be consequences,” she said at the time.

Social Development and Employment Minister Louise Upston has announced new sanctions to come into effect this year. Photo / Mark Mitchell

The traffic light system is now in use. Beneficiaries fulfilling their obligations sit at “green”, those who have failed to meet an obligation and are in a five-working-day dispute period are at"‘orange", while those with an active sanction are at “red”.

“At the end of March 2025, in the traffic light system there were 334,305 clients at green, 2232 clients at orange and 4041 clients at red,” MSD says.

The Child Poverty Action Group doesn’t want the Government to treat “people on benefits as a spreadsheet to be cleared” and said there could be reasons people missed their appointments.

“These are people doing their best in tough circumstances,” spokesman Isaac Gunson said.

“They may not have access to childcare, a working phone or may simply be confused by the system. When every dollar counts, even a short trip to the local office can be unaffordable. Buses don’t always run on time. Sometimes they don’t run at all. We’ve all missed meetings before. Now imagine doing that while trying to survive on the bare minimum.”

Jamie Ensor is a political reporter in the NZ Herald Press Gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub Press Gallery office.