Annual report 2016 cover

Reducing welfare dependence

Most people want to be in the workforce to better their lives and those of their families. We have worked to help more people become independent of the benefit system, by putting people at the centre of targeted support that helps those who are most at risk of long-term welfare dependency obtain and sustain work.

Improving employment and social outcomes

We operate the benefit system accurately and efficiently in a way that improves employment and social outcomes, to help people move closer to independence and better their lives. During the year we increased our focus on developing effective service interventions for clients with more complex personal situations and higher barriers to entry into the workforce.

After four years of developing and using an investment approach to inform the prioritisation of resources, we are achieving reductions in benefit numbers and in the forecast future liability of the benefit system.

Additional investment in active case management, in the form of Work Focused Case Management (WFCM) and Work Search Support, is improving the number of beneficiaries moving into employment. All Sole Parent Support clients with a youngest child aged over three years, and up to 20,000 Jobseeker Support (Health Condition or Disability) clients, are now receiving WFCM.

This investment and the resulting positive impact are reflected in the annual valuation of the liability of the benefit system. The latest available valuation (to 30 June 2015) shows that not only did the numbers of sole parents decrease between 2014 and 2015, the lifetime costs of benefits for these clients also decreased.

Trialling new approaches to reduce welfare dependency

Trialling different approaches to get people out of welfare dependency and into sustainable work is a key part of our investment approach. We have designed and implemented a number of trials over the last two years that are specifically focused on improving outcomes for our client groups who face complex challenges getting into employment. These include:

  • the Young Supported Living Payment (SLP) trial, which allows SLP clients to opt in to our WFCM approach
  • an Intensive Client Support trial, which aims to improve work-readiness outcomes for high-complexity clients
  • the Flexible Childcare Assistance trial, which provides a payment to enable sole parents to access childcare that is not provided for under existing arrangements
  • the In-work Support trial, which focuses on up to 6,000 clients with a high frequency of entry and exits into employment, and work-ready jobseekers who have recently exited into employment

Preliminary results are helping us to understand whether these trials will achieve their expected outcomes. In particular, results indicate positive off-benefit outcomes from the Young SLP and Intensive Client Support trials. The new SLP Opt-in Service was implemented nationally in May 2016.

Supporting disengaged young people

The Youth Service aims to assist disengaged young people back into training or education by providing intensive wraparound support including budgeting and parenting.

At 30 June 2016 there were 12,683 participants in the Youth Service, of whom 96.3 percent were engaged in education, training or work-based learning.

From July 2016 the Youth Service has been extended to at-risk 18- and 19-year-olds and 19-year-old teen parents, to reduce their likelihood of remaining on a benefit long term.

Rewriting the Social Security Act

During the year we continued progressing a rewrite of the Social Security Act 1964 to make it easier to navigate and understand, and to help us improve the delivery of frontline services.

The focus is on improving the structure of the Act so those who use it can find information more easily and understand it better.

The Social Security Legislation Rewrite Bill was introduced into Parliament on 17 March 2016 and had its first reading in May.

Addressing alignment issues

During the past year we identified an issue where operational practice was not aligned with legislation, involving benefit commencement dates. This error has been fixed and processes put in place to contact and repay, or provide back payments to, affected clients.

The Minister for Social Development subsequently requested a review to identify other potential situations where operational practice and legislation were not aligned. We have established an alignment programme to rectify the 35 issues identified, including around incorrect Accommodation Supplement payments to some clients. We anticipate this rectification work will be completed by the end of 2016.

We are also developing a process to better capture emerging alignment issues and to ensure they are addressed in an efficient, consistent and systematic way.

Alleviating material hardship

Alleviating hardship for children not only means that fewer children are vulnerable today, it is also an investment to improve life chances and child wellbeing in the longer term, and it reduces potential harm and costs (including economic costs) to society.

The $790 million Child Material Hardship package that was announced in Budget 2015 came into effect from 1 April 2016. We increased:

  • benefits for families with children by $25 a week
  • Working for Families payments for low-income working families by $12.50 per week
  • childcare assistance for low-income families
  • work obligations for beneficiary parents.

The package will have a meaningful impact for recipient families, particularly those on very low incomes, and will reduce the severity of hardship experienced.

In the five years to March 2016, the number of children in beneficiary families has reduced by over 23 percent, while the number of sole parents with a dependent child under the age of five has reduced by 24 percent.

This work contributes to the following Ministry outcomes:

  • More people into sustainable work and out of welfare dependency
  • Fewer children and young people are vulnerable

Reducing benefit numbers

At the end of June 2016 main benefit numbers had fallen by 5,154 (1.8 percent) compared with a year previously, from 284,960 to 279,806. Within that reduction:

  • the number of people receiving Jobseeker Support reduced by 118
  • the number of people receiving Sole Parent Support reduced by 3,818 to the lowest level since the Sole Parent Support category was introduced in 2013
  • the number of people receiving Supported Living Payment reduced by 716.

Spotlight on:

Expanding the $3K to Work scheme

More than 2,000 clients have taken advantage of the $3K to Christchurch incentive payment since 2014. Over 92 percent of these remained off benefit for longer than 91 days, 34 percent were aged 24 or younger, and 48 percent were employed in the construction sector.

Following the success of $3K to Christchurch, the initiative was expanded in a limited but successful trial in other regions, and was renamed $3K to Work and extended to all regions from November 2015. In 2015/2016, 301 people took up $3K to Work, with 93 percent remaining off benefit for longer than 91 days.

Project 300

Between April 2015 and April 2016 we delivered Project 300, a 12-month employer-led initiative in the Canterbury region to trial a new approach to support clients with health conditions and disabilities into sustainable employment.

The initiative aimed to assist 300 people. By the end of the initiative, 620 clients had been placed into employment or training.

From 1 July 2016 Project 300 will be known as EmployAbility and will be progressively rolled out across the country, starting in the Bay of Plenty.