(Simon Collins, NZ Herald) Thousands of people are expected to be chopped off welfare benefits as sweeping changes in the social security system come into force today.
The reforms represent the biggest upheaval in the welfare state since the Social Security Act was passed by the first Labour Government in 1938.
All sickness beneficiaries, and sole parents and widows with no children under 14, are now subject to the same requirement to look for fulltime work as other jobless people, although sickness may be accepted as a valid reason to postpone work temporarily.
Other new obligations include drug-testing for jobseekers in relevant industries, which is expected to trigger benefit cuts for up to 5800 people, and a requirement for beneficiaries to clear outstanding arrest warrants.
About 8000 beneficiaries have arrest warrants outstanding for issues such as unpaid fines. Unless they clear them within 38 days, their benefits will be halved if they have children, or stopped completely if they don’t, in what is likely to be the biggest single purge of the benefit rolls since the system was created.
The co-ordinator of the Pikorua Community House in a low-income part of Papakura, Michelle Neho, said many people with outstanding warrants would go back to drug-dealing rather than pay their fines.
A Herald investigation into how the changes will affect people’s lives in Papakura, as a case study of a high-welfare area, has found widespread fear of the reforms even among those who are supposed to be exempted from the work-search requirements.
“A lot of people are scared about the warrants to arrest,” Ms Neho said. “There’s a lot of people that have thousands of dollars of fines outstanding.” Some would rather come off the benefit than pay all their fines.
The huge reorientation of welfare shifts the focus from the short-term unemployed, which largely left other beneficiaries alone, to a new “investment approach” aimed at finding work for those who are likely to stay on benefits the longest and cost taxpayers the most – mainly the sick, disabled and sole parents.
Work and Income chief Debbie Power said 85,000 people – mainly the sick, long-term unemployed, and sole parents and widows with no children under 14 – would move today into intensive “work-focused case management” with 760 personal case managers to help them find jobs and overcome barriers such as transport and childcare costs, addictions, debts and workplace attitudes to mental illness and other conditions.
A further 1000 sole parents and 1000 people with mental health problems will be handed over to contractors who will be paid from $2250 to $16,500 for each person they place in employment for at least a year.