The Beehive building

Supporting people back to work - Budget 2021

We are supporting more people to get back to work, keep their jobs and assist New Zealand’s economic recovery.

Government is investing $99.548 million over two years to meet additional demand for MSD’s employment services and products in response to the impacts of COVID-19.

MSD has a critical role in supporting people to obtain and sustain employment and is increasingly responding early – before people enter the welfare system.

  • Demand for Ministry of Social Development employment services and products has increased because of COVID-19.
  • The funding reflects current and anticipated demand as forecast in Treasury’s Half Year Economic and Fiscal Update. In 2018/19, for example, there were 131,200 people on Jobseeker – Work Ready and Sole Parent Support. This is forecast to rise to approximately 230,400 in the 2021/22 financial year.
  • MSD employment assistance was only partially funded for the 2021/22 financial year in earlier COVID-19-related initiatives. At the time it was not possible to anticipate how long the pandemic would continue, and its longer-term effect on employment.
  • MSD employment services and products include:
    • light-touch services for people new to or not yet on benefit
    • higher intensity services for people who need extra support to find or sustain work such as Here Toitū and Youth Service
    • products to help people on benefit find and sustain work, such as $5K to Work, Transition to Work and Flexible Childcare Assistance.

This funding will allow MSD to support more people to obtain and sustain employment and assist New Zealand’s economic recovery.

  • Funding for MSD’s employment services and products will help people re-enter the workforce sooner, decreasing their time on benefit, and the negative social and wider wellbeing impacts of unemployment.
  • It may help to mitigate the risk of people becoming long-term unemployed when they lose their jobs, as happened after the Global Financial Crisis.
  • It will also contribute to supporting New Zealand ‘to become a productive sustainable and inclusive economy that raises the wellbeing of New Zealanders’ as stated in the Government’s Employment Strategy.
  • It responds to the Welfare Expert Advisory Group (2019) report’s comment that ‘there is a need for increased focus by MSD and Work and Income on employment assistance, training and the acquisition of new skills to respond to the changing world of work.’

Costs

Year

2021/22

2022/23

2023/24

2024/25

TOTAL

Costs (operating)

$422.734 million

$76.814 million

 

 

$99.548 million