Monday, August 04, 2014

Rating National's welfare reforms B -

This is a rating from best to worst :

1/ Thousands fewer teenage parents on benefits

How much this is an effect of the welfare reforms is impossible to gauge without some sort of qualitative research. The teenage birth rate has dropped and as virtually all single teen parents go on welfare, the dependency levels have consequently fallen. A teenage birth is so often the beginning of a severely disadvantaged life for the mother, the child and the subsequent children that inevitably follow in quick succession. This fall will show social dividends in the coming decades. And that it is happening across all ethnicities is especially notable.


2/ Fewer sole parents on benefits

The work obligations on now stronger than they were under Labour. The number of sole parents has dropped  by 11% since June 2009. But the work-testing is still too soft. In reality a parent can work as few hours as 12 a week from when her youngest goes to school until he or she is 14. And most importantly, if there are no work opportunities, too often the case in small towns, the work obligations are meaningless.

June 2009 83,387
June 2014 74,027

(These numbers are considerably lower than under the DPB system because sole parents with children 14 and older were moved to JobSeeker, and DPB carers of infirm people were moved to Supported Living.)

3/ Introduction of payment cards and money management

This may be an important factor in reducing the incentive to rely on welfare as a teenager. The regime can now be rolled out amongst older beneficiaries who are, for example, failing to provide for their children.

4/ Annual reapplication for the dole  has seen people 'disappear' off roll

Thousands fewer people receive the dole after the government introduced a requirement to reapply annually in 2011.

5/ Removal of the sickness benefit.

There is now only Jobseeker or Supported Living benefits. Permanently incapacitated rely on the latter. Temporarily incapacitated go on the Jobseeker benefit.This increases the focus on getting temporarily incapacitated people well and employable.

6/ Partners of people who defraud WINZ are now liable

Much of the benefit fraud is by 'single' parents who have  a partner. Welfare has made young, single mums vulnerable to spongers looking for a free ride. The ability to prosecute them might make a difference, although these predators are often law breaking, risk takers by nature. Too soon to tell

7/ Future liability has reduced slightly

Because the numbers of young and sole parents have reduced, and they typically have long stays on welfare, future liability has reduced.

8/ Existing long-term dependence has not improved

Most governments can chip away at the margins which feature employable people affected mainly by economic circumstances. Making inroads into long-term reliance on welfare is a much tougher ask.

At December 2013 143,000 people had been continuously on welfare for more than 4 years; 63,000 for more than ten years. These numbers are higher than when National became government. In December 2008 the respective numbers were 124,000 and 62,000.

9/ The Supported Living payment (ex Invalid Benefit) is continuing to attract transfers from other benefits

This continues to baffle researchers:

 A higher than expected rate of transfer to Supported Living Payment is also occurring from both Jobseeker – HCID and Sole Parents.
Back in the 1960s only around 1 percent of the population was 'permanently' incapacitated. That now stands at around 3%

Supported Living Payment population reciept

10/ Children are being added to an existing benefit at an even greater rate than pre-reform

The policy intended to reduce this habit has failed. Individuals - especially Maori - continue to have babies when they are already unemployed and without any independent means to raise their children. In the six months ending March 31, 2006, 5854 children aged under one were added to a benefit. In the same period prior to March 2014 the number increased to 6634 - a 13% rise.

If you were to grade National, what would you give it?

Don Brash described the reforms as "a useful start". I thik that is quite apt. On the basis that much more is planned I'll give them a B-.


Anonymous said...

Nationals reforms are as usual directed at the wrong sector of society.The unfortunate,unsophisticated,the gullible with little financial literacy that struggle with a materialistic and amoral ideology are such an easy target.Directing the angst of the aspirational middle class against the poor is passe with the Nats.Look to those on ludicrous salaries through political patronage and historical old boy networks and address their entitlement mentality would be more productive.Who on earth uses all the tax havens around the world and the financial machinations of legal device to hide their assets and meet their liabilities.Hint it aint the poor !

S. Beast said...

Sickness benefit is still around. It falls into Jobseeker, but has medical dispensation allowing for a part time work test rather than the full time work test.

One possible reason that I can see for the increase in Supported Living is that there is no work test, meaning that the beneficiary can more appropriately use their time on a benefit to improve their illness. "Permanent" for the purpose of Supported Living Payment is considered unable to work more than 15 hours (on average) for a period of at least two years. This is much better than people who are severely ill/disabled being harassed as stress worsens many medical conditions.