Election 2023: National Party sanctions benefit policy goes against evidence - expert, WEAG says

ANALYSIS

The National Party wants a greater focus on benefit sanctions to help move people into employment, which an expert says goes against prevailing evidence and can simply lead to “more hardship”.

However, University of Auckland associate professor Susan St John, spokeswoman for Child Poverty Action Group, says the proof will be in how exactly National plans to apply the sanctions it is proposing.

National today unveiled its plan to introduce harsher penalties for people on Jobseeker unemployment benefits who didn’t meet their obligations to look for work.

The party proposed a traffic light system, whereby after two breaches (orange) there would be more regular check-ins and guidance while after three sanctions there could be benefit cuts or suspension, money management and mandatory community work experience introduced.

Jobseekers would also be required to reapply for benefits every six months, show documents to prove they’re applying for jobs and attending job interviews, and have a one-month benefit stand-down for those evading arrest warrants.

Social development spokeswoman Louise Upston pointed to record-high numbers of people on Jobseeker benefits under Labour, peaking at 212,466 people in December 2022 in the heights of the Covid-19 pandemic, and a dramatic reduction in the numbers of benefit sanctions being applied.

There were about 12,000 sanctions applied to people on Jobseeker benefits in the quarter before Labour came into Government in 2017. This remained relatively steady until the beginning of the pandemic, when they plummeted as the Ministry of Social Development adopted a much-less punitive approach. Sanctions have increased since the end of 2020, with the latest June quarter at 6243 - roughly half the number under National.

But as a percentage of total Jobseeker benefits, they were being applied at nearly a third of the rate under National.

Before 2017, Labour campaigned on reforming the welfare system, including rolling back a range of sanctions introduced under National targeted at people on benefits. It established the Welfare Expert Advisory Group (WEAG), part of its confidence and supply agreement with the Green Party, which in February 2019 produced the report Whakamana Tāngata: Restoring Dignity to Social Security in New Zealand.

The group came up with 42 recommendations, which ranged from amending principles of the legislation guiding the welfare system to specific initiatives such as removing certain sanctions and increasing benefit levels.

Among them were to remove some obligations and sanctions (including pre-benefit activities, warrants to arrest sanctions, social obligations, drug-testing sanctions, 52-week reapplication requirements, sanctions for not naming the other parent, the subsequent child work obligation, and the mandatory work ability assessment for people with health conditions or disabilities).

While Labour has removed a range of benefit sanctions, many of them targeting sole parents and affecting children, it has retained sanctions for work obligations.

Current sanctions mean if a person and their partner - where required - did not meet their work preparation obligations without a “good and sufficient reason” their benefit would be reduced by 50 per cent for 4 weeks.

The second time it would be extended to 13 weeks for someone with dependent children, or be stopped that whole time if they don’t. This would be repeated if it occurred a third time. (National would retain the existing rule differentiating those with children).

While Labour has retained this Jobseeker sanction, the application has dropped dramatically.

Social Development Minister Carmel Sepuloni has said this was largely due to a change in culture, and reflecting the evidence they were not effective. There have also been massive disruptions throughout the pandemic, which have contributed to increases in Jobseeker benefit levels alongside a softer approach on sanctions.

She said today Labour was more focused on supporting people into work, not sanctioning them.

“Our investment into employment programmes like Flexi-Wage, Mana in Mahi and He Poutama Rangatahi have helped record numbers of New Zealanders off benefit into work - 100,233 in 2022, 25.7 per cent higher than 2017.

“What the National Party have failed to realise, which is doubled down by their lack of evidence, is that sanctions can exacerbate already difficult situations. More than 42 per cent of people receiving Jobseeker support cannot work or are working fewer hours because of a health condition or disability.”

The WEAG report found through speaking with benefit recipients the sanction system “diminishes trust, causes anger and resentment, and contributes to toxic levels of stress.

“The application of obligations and sanctions in New Zealand (and elsewhere) is problematic.”

The expert group found little evidence sanctions were effective in encouraging people back into work.

“There is little evidence in support of using obligations and sanctions (as in the current system) to change behaviour; rather, there is research indicating that they compound social harm and disconnectedness.

“Recent studies recommend moving away from such an approach towards more personalised services.

“For the welfare system to work effectively to deliver the new purpose, principles and values we conclude that mutual trust between parties is essential.”

The group found there was some evidence for “less severe” forms of sanctions that existed in New Zealand, recommending a 10 per cent reduction.

Meanwhile, places with “very harsh” sanctions can have “important adverse effects that drive people away from, rather than closer to, employment, and might worsen rather than improve the long-term chances of children in the families affected”.

There was also even less evidence for “non-work-related obligations and associated sanctions”.

Research did indicate they could be costly to administer and comply with, alongside a range of social problems from worsening health outcomes and higher poverty levels and crime rates.

St John said while Labour had retained the ability to apply the sanctions it was clear from the data there had been a shift in the culture in how they were being applied.

“There is a recognition that they only create an awful lot of hardship.”

She said while National’s focus on sanctions appeared to be taking it a step further, it would depend how they were applied.

National’s traffic light system introduced several steps that currently do not exist, and which in theory could still result in fewer sanctions being applied. The Herald has sought a response from Labour on this point.

“It appears to go against the prevailing thinking for some time. But it all depends on how it is implemented and the culture, and knowing the previous national government did operate a very harsh regime.

Asked what evidence there was that the traffic light system would shift the dial in terms of pushing beneficiaries into jobs, National leader Christopher Luxon said simply that he thought it would work.

He said beneficiaries wouldn’t receive warnings if there were genuine reasons why they didn’t fulfil their obligations, such as if childcare plans fell through or if their bus didn’t show up.

He denied that National would treat beneficiaries like criminals, and emphasised that job seekers had responsibilities.

“The deal is really simple. Your fellow citizen is paying taxes to be able to fund a welfare system that supports you in between jobs.”

He said it would only be applied to those deemed ready to work, and oblige them to either be looking for work or be in training.

Upston said the focus would always be on encouraging people to find work and matching them up with employers, with sanctions being a last resort and other options along with financial sanctions.

She said they did not have a target but wanted to reduce the number of people on Jobseeker benefits at a time where there was low unemployment.

New Zealand First also released welfare policy today, saying someone should only be allowed to be in a Jobseeker benefit for up to two years of their working lifetime.

If anyone needed help beyond that, they would be expected to do community work for a wage.

The Green Party’s social development spokesman, Ricardo Menéndez March, said National’s policy would make life harder for thousands of people who need support.

“A National government would literally leave children to go hungry and punish families. It is cruel, ill-thought-out, and will endanger the well-being of thousands of people.

“Evidence shows that benefit sanctions do not help people into work - and yet National is making the choice to use them, knowing full well it will cause harm.”

National’s social policy is also to peg back benefit levels to inflation. They are currently pegged to either inflation or wage growth, whichever is higher.

Michael Neilson is a political reporter based at Parliament in Wellington. He joined the Herald in 2018 and has covered social issues, the environment and Māori affairs.