Welfare Reform

Welfare Reform4 min read

27/9/12 3 min read


Welfare Reform4 min read

Reading Time: 3 minutes

More welfare reform is upon us. The Government recently announced the second part of its welfare reform package. The Social Security (Benefit Categories and Work Focus) Amendment Bill is now before the Social Services Select Committee.
There is a high degree of interest in the changes. So we thought, we would do a summary of the changes in the bill.

We are also preparing a submission on the bill and will be sharing our thoughts with you later, but this blog is just focused on making sure people are informed.

The first part of the Government’s welfare reform package focused on youth and sole parents. This second part focuses on merging the benefit categories, stronger work expectations and new obligations for people on benefits.

Will the reforms take us down the path of the United Kingdom welfare reforms with private agencies carrying out controversial tests that see large numbers of people denied disability benefits? 

Or will the reforms be an opportunity for more people to get the support they need to find appropriate employment?

Unfortunately, it is very difficult to tell by just looking at the bill. You can find evidence for both positions.

Ultimately, as with all laws, the actual impact will come down to how it is applied. The Social Development Minister has already stated that the Government will only be testing a portion of people on benefits with children for the new child care obligation because of a lack of resources.

The main change is the merging of the seven existing benefit categories into three new categories. The categories are Jobseeker Support, Sole Parent Support and Supported Living Payment.

Jobseeker Support
One of the biggest changes will be for people on the current Sickness Benefit. The sickness benefit will be merged with the unemployment benefit and the domestic purpose benefit for people with children older than 14 to form the new Jobseeker Support benefit.

The new Jobseeker Support category will have strong work expectations, although temporary relief may be granted for injury or sickness. Temporary relief will require a medical certificate. Work and Income can request that people on a jobseeker benefit submit at any time for a medical examination by a medical practitioner chosen by Work and Income.

The penalties for failing to take a suitable job have been vastly increased from a 50 per cent cut for four weeks to full benefit cancellation for 13 weeks.

Supported Living Payment
The new Supported Living Payment will include people currently on the Invalid’s benefit (At least, the new name is better, I struggle to think of a worse name than Invalid’s benefit) and people currently on the Domestic Purpose Benefit Care of the Sick and Infirm (Also a horrible name).

People on the Supported Living benefit will at, any time, have work ability assessments, except for people terminally ill; or who, in Work and Income’s view, have little or no capacity for work and their condition is deteriorating or not likely to improve.

Work ability assessments will determine whether the person is entitled to a benefit and if so what benefit the person should be on. The assessments will also determine what suitable employment is for the person and what support they may need. Work and Income may also carry out reassessments from ‘time to time’ after an interval they feel is appropriate. The Social Development Minister gave some indications of what these assessments might like look in a speech to medical professionals yesterday.

New obligation on people receiving benefits
All people on benefits, including Supported Living and Jobseeker, have obligations with their children. Children between the age of three and six, if not at school, must attend early childhood care. Children aged between six and 16 years must regularly attend school. Children must be enrolled in a primary health care provider and be up to date with Well Child check ups.

Failure to meet these obligations will result in sanctions of up 50 percent of the benefit cut. Before the benefit is cut, Work and Income must have communicated with the person on the benefit at least 3 times about the issue.

People on benefits are allowed to fail these obligations if required assistance was not provided by Work and Income. For example, assistance with transport costs. 

Contracted Providers
The Ministry of Social Development can now contract third party providers to provide services or carry out assessments. People receiving benefits must comply with the contracted provider’s requests when directed to by Work and Income.

The Social Services Select Committee is currently accepting submissions on the bill. You can do a submission yourself here. The closing date is 1 November.

Policy and Advocacy Team