KEY POINTS:
The National Party looks set to cut about $20 million a year off the welfare budget by requiring sole parents to go back to work or training when their youngest children turn 6.
As tipped in yesterday's Herald, National's welfare policy unveiled yesterday requires sole parents on the domestic purposes benefit (DPB) to undertake "15 hours per week of employment, training or job-seeking activities" once all their children are 6 or over.
The policy is softer than at the last election, when then-leader Don Brash planned to require work, training or community service part-time once a youngest child reached school age (5) and fulltime when the child turned 14.
New leader John Key has abandoned the option of community service, or "work for the dole", and dropped the requirement for fulltime work when a child turns 14.
He said work for the dole was no longer needed now that unemployment beneficiary numbers had fallen from 100,000 to 17,000 in the past five years. A spokesman said the party recognised that almost all sole-parent beneficiaries were now better off under Labour's Working for Families policy by moving off the benefit once they worked at least 20 hours a week, when they qualify for the in-work tax credit of $60 a week.
Mr Key said the party would spend an extra $17 million on boosting the incentive to work by lifting the income that beneficiaries can earn before their benefit is reduced. It will be $100 a week, up from $80 - unchanged since 1996. It would also spend $1.2 million a year on second opinions from designated doctors for all sickness benefits after a year on the benefit.
Herald calculations suggest that savings could be in the order of $40 million a year, assuming that the 41,000 on the DPB whose youngest child is aged 6 or over include perhaps two-thirds of the 18,000 who already work part-time, leaving about 29,000 who are not doing any paid work.
The calculation assumes that perhaps half of these start working 15 hours a week at the minimum wage of $12 an hour, while the other half go into training or other job-seeking activities while staying on the benefit.
This would produce a net saving in the order of $20 million a year after allowing for the costs of raising the allowable income level and getting second opinions from doctors.
WELFARE POLICY
* Sole parents with children over 6, and sickness and invalid beneficiaries able to work part-time, will have to put 15 hours a week into work, training or job-seeking.
* Those who don't comply will have their benefits reduced, then suspended.
* Beneficiaries requesting three or more repayable hardship grants a year will be referred to budgeters.
* Sickness beneficiaries will have more doctors' assessments.
* Beneficiaries will be able to earn $100 a week before their benefits are reduced, up from $80 now.
