Welfare reform aims to get more into jobs - Key

Social Welfare Minister Paula Bennett. Photo / Supplied

An $88 million welfare reform package has been announced by the Government today to push beneficiaries into work.

Prime Minister John Key and Social Development Minister Paula Bennett announced the policy changes in Wellington today.

Single parents with children older than six will be encouraged into part-time work or training and other beneficiaries will need to pass stricter criteria to keep getting their payments.

"We believe in a welfare system that supports people when they are most in need, encourages them to get back to work, and occasionally gives them a kick in the pants when they are not taking responsibility for themselves, their family, and other taxpayers," Mr Key said.

But Green Party co-leader Metiria Turei said beneficiaries were jobless not for want of trying, and pushing them harder would only be hurtful.

"Being on a benefit is not some luxury holiday. It means trying to live off as little as $161 per week. It's incredibly hard to make ends meet on such a small amount," Ms Turei said.

"At times like these people need respect and support. They will get none of that from this Government."

The key changes, to be phased in from September, are:

* Expectations of part-time work for single parents on the domestic purposes benefit when their child reaches six and for people on the sickness benefit deemed capable of part-time work.

* Allowing Work and Income case managers to cut benefits by half as a sanction, followed by a full suspension then a cancellation.

* Employment benefits limited to a year. Beneficiaries must reapply after a year with a comprehensive work assessment.

* More frequent assessments of people on a sickness benefit, with three medical assessments during the first twelve weeks, a further assessment every twelve weeks thereafter, and a more comprehensive reassessment after 12 months.

* An increase from $80 to $100 in the amount that people on the domestic purposes benefit for single parents and the invalids benefit can earn each week without affecting their benefit.

"We're focused on sending the right message that someone on a benefit has to do everything they possibly can to get a job," Mr Key said.

Beneficiaries had to be responsible to the taxpayer, and a life in work offered more than a life limited by welfare, he said.

"Long-term welfare dependency imprisons people in a life of limited income and limited choices," he said.

Social Development Minister Paula Bennett said the target was people who got stuck living off the benefit for a long period of time.

About 345,000 New Zealanders currently received a benefit, costing taxpayers $4.8 billion a year, she said.

The costs of the changes, through new loans, increases to abatement thresholds and staffing costs, would be $88 million, Ms Bennett said, but Mr Key suggested there would be savings of almost $200 million over the next 10 years just by helping one in 20 single parents with a youngest child older than six into work.

The key was to build their confidence and motivation over time through part-time retraining and working closely with their case managers, Ms Bennett said.

A beneficiary who could not find work would not be forced off the benefit, she said.

"As long as they're meeting their obligations, they will continue to receive their benefit."

The proposal to make sole parents with children over 6 look for training or part-time work of at least 15 hours a week was announced in National's election policy in 2008, but was deferred last year because of the recession.