Unemployed young people on the independent youth benefit appear to have escaped unscathed from the first instalment of the Government's new youth guarantee policy - but only for perhaps two years.

The new policy, detailed on Sunday by Prime Minister John Key, provides $152 million over the next two years in subsidised work and training for young people aged 16 to 24. Mr Key said yesterday that it would be "ridiculous" for the Government to pay benefits to young people who left school without going into either a job or further training.

"It's our policy - we don't want 16 and 17-year-olds to be on the independent youth benefit," he said.

But the Government appears to have accepted that it cannot deny the benefit to young people who refuse work or training until there are enough training places available for all unemployed youngsters.

The new package provides places for 2000 fulltime-equivalent students at tertiary institutes under the youth guarantee next year, but 32,200 young people aged 15 to 19 were counted as unemployed in the last household labour force survey in March. The June survey, to be released on Thursday, is expected to show a further big increase in the teenage jobless tally.

The main unemployment benefit is not available under 18. The only benefit payable below that age, the independent youth benefit (IYB), was paid to only 1750 teenagers at the end of June.

Youth Law senior solicitor John Hancock said the benefit was hard to get and required a psychologist's report to determine whether a young person's relationship with his or her parents had broken down to such an extent that the parents could no longer support their child.

Although no official figures were available yesterday, Mr Hancock said his own experience suggested that most young people on the IYB were still at school or on training courses.

The National Party's 2008 election policy stated that its proposed youth guarantee would eventually provide "a universal education entitlement for all 16 and 17-year-olds", allowing them "to access, free of charge, a programme of educational study towards school-level qualifications".

The hard edge in the policy was: "Sixteen and 17-year-olds who are not working, and who fail to take up this new entitlement, will not be eligible to receive a benefit."

The policy had been due to come into force from 2011.

Mr Key's weekend announcement means that it will now start a year early, but, with only 2000 places a year available in 2010 and in 2011, any changes to the IYB seem likely to be deferred.

A spokeswoman for Social Development Minister Paula Bennett said the future of the IYB would form part of a report to the Cabinet social services committee in November.

"Any legislation will be after that," she said.

Institutes of Technology and Polytechnics director Dave Guerin yesterday welcomed the decisions to bring forward the starting date and to provide 700 extra places in thesector next year, using $8 million of tertiary funding that was not spentlast year. He said the combinationof the two changes would allow polytechnics to increase student numbers by about 3 per cent next year.

However, the Government has not provided any extra money to cope with increased enrolments in the second half of this academic year. Mr Guerin said three or four institutes had already exceeded their enrolment caps by more than the 3 per cent allowed, risking possible penalties from the Tertiary Education Commission.

Unitec chief executive Rick Ede said Unitec had cut back some courses but still expected to end the year 5 per cent above its cap.

Manukau Institute of Technology spokeswoman Zara Potts said MIT expected to end up 5 to 6 per cent over its limit.

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