ANALYSIS
The Greens have attacked the Government for allegedly exaggerating the number of people who spend decades on a benefit.
They argue one of the Government’s favourite statistic - that people on a youth payment will spend an average of 24 years of their working lives on a benefit - is misleading because it applies to just 0.5 per cent of people who receive main benefits.
Prime Minister Christopher Luxon used the figure in his State of the Nation speech in February. Social Development Minister Louise Upston highlighted the figure when they announced a toughening of benefit sanctions during a post-Cabinet press conference with Luxon the next day.
“Teenagers who go on to welfare will become trapped there for an average of 24 years of their working life. Putting that into perspective, a teenager who becomes trapped on welfare now may not get their first job until they’re 40 because of how broken the welfare system has become under Labour,” Luxon said.
“The average time for someone on a youth payment is actually 24 years. It’s up over 50 per cent in three years,” he said, later in the press conference, once alternating the term “young people” for “teenager”.
In benefit terms, a “young person” is someone aged 16-25. Just 3.6 per cent of all “young people” who get a benefit receive the youth payment or young parent payment. Just 0.5 per cent of all beneficiaries receive the payments, according to statistics supplied by MSD to Parliament’s Social Services and Community Committee.
The figures Luxon is using are correct. They come from a report by Taylor Fry, commissioned by the Ministry of Social Development on long-term trends in the benefit system. The report’s contents have already been reported on by the Herald.
The Taylor Fry report modelled that people on two types of benefits, the Youth Payment or the Young Parents’ Payment, which are benefits for teenagers, will spend an average of 24 years of their working lives on a benefit, before hitting retirement age at 65.
This is, as Luxon said, a large increase on previous years. In 2019, people receiving those benefits were estimated to spend just 16.4 years on a benefit during their working lives.
But Green Party Social Development Spokesman Ricardo Menéndez March has attacked the figure as being somewhat misleading, and the Government’s sloppy use of the figure gives the impression that young people touched by the social welfare system spend a quarter of a century on a benefit.
Just 0.5 per cent of the total benefit-receiving population in 2022 received those benefits. As of March 2024, the figure was 2940 people. Menéndez March accused the Government of using that figure as representative of other people on a benefit.
He said the Government was using the study to make the case for a more punitive benefit sanctions regime to shift people off benefits and into work.
“The Government has continuously misrepresented welfare figures to push their cruel punitive agenda. They need to be upfront with New Zealanders that the data that they’re using only will impact a tiny proportion of beneficiaries and not the average young person on the benefit,” he said.
He said the people receiving the payment would have “had experiences of state care, poor physical health, and poverty”.
“To use that tiny percentage of beneficiaries to paint a picture of a whole group of people - we’re talking about hundreds of thousands of people who at some point would have relied on income support - is unfair,” he said.
Upston defended her use of these particular forecasts, arguing that any number of people spending an extended period of time in the welfare system was a problem.
“Dismissing these projections and accepting it is okay for a small number of people to spend 24 years of their lifetime on welfare is the kind of attitude that saw the number of people on Jobseeker benefit increase by 70,000 under the previous Government.
“This is shocking to me, and a major problem that we should confront constructively - whether the projections represent two, 2000, or 200,000 young people I’m not prepared to sit back and consign people to a life on welfare because our Government is more ambitious than that, for every single New Zealander,” Upston said.
In general, the people who qualify for those two benefits are classed as very high needs, often because they have left the support of their family or guardian at a very young age. Only people aged 16 or 17 are eligible for the youth payment, which is for people of those ages who can’t live with their parents or guardians and aren’t supported by them or anyone else. The Young Parent Payment is for teenagers aged 16-19 with a child.
Teenagers in those circumstances are among New Zealand’s most vulnerable and have always spent a long time on welfare. That said, the Government is right to note that estimates for how long someone will spend on a benefit have shown a trend towards people spending longer on a benefit. People receiving the benefits are now expected to spend 46 per cent longer on a benefit than in 2019. About 500 of the people who receive these benefits are expected to be on income support for more than 38.5 years.
A work-ready jobseeker in 2019 was expected to spend an average of 10.8 years of their working lives on Jobseeker. By 2022, that figure had increased to 13 years.
Someone receiving sole parent support in 2019 would spend an average of 12.5 more years of their working lives on a benefit, a figure that increased to 17 years by 2022.
Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.
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