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Implementing the Government's priorities
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Government Targets
In April 2024, the Government announced nine targets for agencies across the public service to contribute towards achieving. MSD is the:
- lead agency for Target 5: ‘Fewer people on the Jobseeker Support benefit’
- co-lead agency for Target 8: ‘Fewer people in emergency housing’, alongside HUD.
MSD’s work also supports Target 3: ‘Reduced child and youth offending’ and Target 4: ‘Reduced violent crime’. The section ‘Partnering with others’ on pages 43 to 45 outlines the work we do to contribute to these targets.
More information on the Government Targets can be found online:
Fewer people on the Jobseeker Support benefit
Jobseeker Support – Work Ready numbers are primarily influenced by economic conditions. The Budget Economic and Fiscal Update (BEFU) released in May 2025 shows the number of people receiving this benefit is forecast to remain elevated throughout 2025 before decreasing as economic conditions improve.
Also, the number of people receiving Jobseeker Support – Health Condition or Disability is expected to increase over the five years to June 2029. While the anticipated future improvement in economic conditions should make it easier to find and retain work, assisting this cohort into employment often requires working alongside health services and developing targeted support.
MSD has implemented a range of initiatives to support New Zealanders into employment. Despite the economic challenges, the number of people who exited Jobseeker Support into employment has increased this year (70,323 compared to 59,718 in 2023/24). The section ‘Getting New Zealanders working’ on pages 37 to 39 outlines more detail on our work towards achieving this target.
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Fewer people in emergency housing
This target includes households receiving Emergency Housing Grants from MSD and households in Contracted Emergency Housing, which is administered by HUD.
The Government Target has been met. The reduction has been supported by a range of initiatives, including:
- implementing the Emergency Housing Gateway changes
- introducing the Priority One category on the Social Housing Register
- expanding MSD’s suite of HSPs
- continuing MSD’s emergency housing support services
- continuing supporting people to find better housing arrangements and to stay in housing.
The section ‘Supporting people with their housing needs’ on pages 41 to 42 outlines more detail on our work towards achieving this target.
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Other Government and ministerial priorities
We have supported improving the redress system for survivors of abuse in care
MSD has continued to support the Government’s response to the Royal Commission of Inquiry into Abuse in Care recommendations. Over 2024/25, this has included:
- formally apologising to survivors of abuse and neglect while in the care of Child, Youth and Family or its predecessors (delivered by Debbie Power as Chief Executive of the Ministry of Social Development on 12 November 2024, alongside the Prime Minister and six other public sector leaders)
- contributing to the Crown Response Plan, which sets out how the Government is responding to the Royal Commission’s recommendations
- supporting Ministers to deliver a Crown Response Budget package, which provides significant investment into strengthening the care system and improving redress for survivors of abuse in state care.
MSD also continues to support cross-government work aimed at improving the safety of the care system, in response to the Royal Commission’s recommendations. Since the release of the Royal Commission’s report, Te Kāhui Kāhu (Social Services Accreditation) has mapped the relevant recommendations to the Social Sector Accreditation Standards (SSAS) and is working on improvements to the current accreditation guidance for providers to support the continued delivery of safe, quality social services.
Through Budget 2025, the newly established Vote Disability Support Services received funding for initiatives that will support work to make the current care system safer, including additional audits on the quality of disability support services and system improvements for complaint and incident management systems.
MSD has a commitment to continuous improvement for our historic claims processes, and we met or exceeded our performance measure standards for 2024/25, as outlined on page 56 We have received funding to increase the average redress payment, increase capacity to process claims, and provide top-up payments for previously settled claimants to ensure consistency across claims handled by agencies. We also led the establishment of both a webpage and phone line to support survivors seeking a top-up payment.
Child poverty reduction
MSD provided advice to support the Minister for Child Poverty Reduction in setting the third intermediate targets (for the period 2024/25–2026/27) on the three primary child poverty measures. The Minister also set the first persistent poverty targets under the Child Poverty Reduction Act in December 2024. This followed the development of a child poverty persistent measure by Stats NZ.
The Children’s Act 2014 requires the Government to adopt a strategy for improving the wellbeing of children. MSD undertook work to support the development of a refreshed strategy (The Child and Youth Strategy 2024–2027), which was published in November 2024 and can be found online:
The strategy sets out a vision, outcomes and three priorities that will drive cross-government work, inform investment decisions and ensure progress is measured. The three priorities are:
- supporting children and their families and whānau in the first 2,000 days
- reducing child material hardship
- preventing harm against children.
The strategy provides a framework for action and investment across government, with a focus on prevention and early intervention to address underlying risk and protective factors that influence a range of outcomes throughout childhood and beyond.
The first Annual Report on the refreshed strategy was released in April 2025, covering 2023/24, and can be found online:
Baseline savings
All departments are required to set out the amount saved through their Budget 2024 Initial Baseline Exercise (IBE) and how they achieved these savings, including contractor and consultant savings.
Reduction in departmental, non-departmental and Benefits or Related Expenses (BoRE)
MSD’s departmental baseline was reduced by $40.291 million in 2024/25 as a result of the Budget 2024 IBE. We achieved this reduction through the following savings initiatives:
- Workforce Reduction ($16.943 million)
- Contractors and Consultants ($15.650 million)
- Operating Funding Reduction ($6.070 million)
- Minimum Wage Exemption – Discontinuation of Wage Supplement ($1.039 million) – as outlined below, this initiative also contains non-departmental savings
- Several Time-Limited Initiatives ($0.589 million) – as outlined below, these initiatives also contain non-departmental savings.
For non-departmental expenditure, $20.552 million of savings were made in the 2024/25 year from the following savings initiatives:
- Minimum Wage Exemption – Discontinuation of Wage Supplement ($10.301 million)
- Several Time-Limited Initiatives ($9.198 million)
- Community Innovation Fund ($1 million)
- Crown-Funded Costs – Social Workers Registration Board ($0.053 million).
For BoREs, the following savings initiative was introduced through Budget 2024:
- Emergency Housing – Tightening Gateway Settings and Continuing Support Services. This initiative contributed to the following BoRE savings in 2024/25:
- $61.140 million recognised through Budget 2024
- an additional $230.041 million recognised through Budget 2025.
The following Budget 2024 savings initiative is not listed above, as it does not realise savings until the 2025/26 financial year: Including Boarders’ Contributions in Calculation of Subsidies for Private and Social Housing.
Further information on Budget 2024 initiatives can be found online in the Budget 2024 Summary of Initiatives:
Reduction in expenditure on contractors and consultants
Total contractor and consultant expenditure for 2024/25 was $33.659 million, a reduction of $59.008 million compared to 2023/24 ($92.667 million). In 2024/25, this represented 3.9 percent of total workforce costs, compared to 9.8 percent the previous year.
MSD’s savings target of $15.650 million as set out in Budget 2024 was achieved and returned. The remaining reduction reflects the conclusion of time-limited funding and reprioritisation to support workforce capability and cost pressures.
Major spending decisions
Cabinet has established an enduring system for monitoring and reporting on major operating spending decisions of government, which are subject to additional reporting requirements.
Budget 2024
The major spending decision from Budget 2024 for MSD was the Apprenticeship Boost Continuation, a multi-agency collaboration. The Ministry of Education is responsible for the initiative’s policy, the Tertiary Education Commission checks eligibility, and MSD manages applications and payments.
Forecast expenditure from Budget 2024 for Apprenticeship Boost was $32 million for 2024/25, and actual expenditure was $48 million. The reason for this variation is mainly due to a carry forward of funding from the previous year.
Information on the deliverables and results of this initiative can be found in the Ministry of Education’s Annual Report 2025.
For MSD’s role in administering the scheme, performance measurement relating to the accuracy of processing Apprenticeship Boost payments is outlined on page 93.
Budget 2025
The major spending decision from Budget 2025 for MSD is the Employment Services – Investing in Frontline Staff and Employment Programmes. This initiative enables MSD to maintain critical employment spending for the next two years, to help get more people into work and make progress towards the Jobseeker Support reduction Government Target.
Allocated funding
Vote Social Development Operating Expenditure
|
2024/25 ($m) |
2025/26 ($m) |
2026/27 ($m) |
2027/28 ($m) |
2028/29 & outyears ($m) |
Total ($m) |
|
|---|---|---|---|---|---|---|
|
Costs |
- |
148.271 |
177.629 |
17.400 |
- |
343.300 |
|
Gross savings |
- |
(35.964) |
(126.465) |
(174.880) |
(153.246) |
(490.555) |
|
Total net |
- |
112.307 |
51.164 |
(157.480) |
(153.246) |
(147.255) |
Vote Social Development Capital Expenditure
|
2024/25 ($m) |
2025/26 ($m) |
2026/27 ($m) |
2027/28 ($m) |
2028/29 & outyears ($m) |
Total ($m) |
|
|---|---|---|---|---|---|---|
|
Total |
- |
2.104 |
0.406 |
- |
- |
2.510 |
Performance indicators
MSD provided a monitoring and evaluation plan for the initiative to the Minister for Social Development and Employment and the Minister of Finance at the end of June 2025. The plan included the following indicators for the three key components of the initiative:
Employment interventions that are a continuation of services
Short-term indicators
- Exits from a main benefit into employment.
Medium to long-term indicators
- Sustained employment.
- Where possible, the effectiveness rating of each of the employment programmes funded by the Budget 2025 initiative. Effectiveness is measured against up to five outcome domains: net income earned, time in employment, highest qualification gained, time in corrections services, and income support expenditure.
Employment case management
Face-to-face case management was found to be effective at achieving employment outcomes when it was last evaluated in 2019. The evaluation report can be found online:
MSD will monitor the effectiveness of case management, including for priority cohorts.
Expansion of Community Job Coaches
Short-term indicators
- The number of participants in the year to date of reporting.
- Exits from a main benefit into employment.
Medium to long-term indicators
- The number of clients who received a bonus payment for remaining in employment for 12 months after exiting a benefit.
- The effectiveness rating of Community Job Coaches, including bonus payments.
Other significant Budget decisions
We consider the Budget decisions outlined below to be ‘significant’ as they are important to the delivery of the Government’s priorities, important to Parliament and the public, and material decisions for our department.
Given the size and number of MSD appropriations, we have used the following criteria to determine the scope of significant Budget decisions:
- The initiative contains Budget funding of at least $100 million over the forecast period, or $25 million in any given financial year, in Vote Social Development or Vote Disability Support Services; and/or
- The initiative is a significant government priority (such as a manifesto commitment).
Budget 2024
Disability Support Services
Budget 2024 funding for 2024/25: $322.308 million
Budget 2024 total funding over forecast period: $1,099.900 million
This initiative provided funding to Whaikaha – Ministry of Disabled People for the continued delivery of support to disabled people and their families. Responsibility for the funding was transferred to MSD on 1 December 2024 when DSS moved from Whaikaha. The funding is helping meet increases in volume and inflationary pressures on the delivery of disability support services. Since becoming responsible for the delivery of disability support services, MSD has improved forecasting and financial controls, which informed a cost pressure funding bid that was funded through Budget 2025.
The implementation of financial controls recommended in the independent review, along with allocations of funding carried forward from previous years, has contributed to an underspend across the Supporting Tāngata Whaikaha Māori and Disabled People Multi-Category Appropriation (MCA). Cabinet has agreed to transfer this underspend forwards to continue to support ongoing cost pressures. This will occur as part of the October Baseline Update.
See pages 105 to 111 for MSD’s performance information relating to this initiative.
Historical Claims of Abuse in Care
Budget 2024 funding for 2024/25: $32.833 million
Budget 2024 total funding over forecast period: $81.869 million
This initiative provided two-year funding to continue resolving claims of historic abuse for people in the care of Child, Youth and Family (or its predecessors), without requiring civil litigation.
In 2024/25:
- MSD continued to work with survivors to progress their claims, make redress payments, reimburse legal costs, and connect survivors to support services such as counselling.
- This year we settled the largest number of claims to date, and the time to process claims continues to improve compared to previous years.
- Cabinet approved additional funding of $17.324 million during the year to increase MSD’s processing capacity and maintain delivery momentum. Additional funding of $38.089 million was then received as part of Budget 2025 in the 2024/25 financial year and appropriated to the newly established Redress for Abuse in Care MCA. This enabled the processing of an additional 90 claims assessments and the establishment of the top-up payments process, which went live in May 2025.
Total actual expenditure for the 2024/25 year was $72.469 million in both departmental and Crown accounts. Cabinet agreed to transfer remaining unspent funding from the 2024/25 year to 2025/26 through the Budget 2025 process.
See pages 56 to 57 for MSD’s performance information relating to this initiative.
Budget 2025
For these initiatives, performance information will be reported in future Annual Reports.
Ministry of Social Development – services for the future programme
Budget 2025 total funding over forecast period: $67.590 million in 2025/26 (remainder of funding is held in contingency and figures withheld for commercial sensitivities)
This initiative funds the MSD’s business transformation programme for 2025/26. The programme will change the way MSD operates, modernise its technology and business processes to support new and more efficient ways of working, and reduce costs and risk.
Addressing the Wrongs of the Past – Redress System Changes and Provision of Redress for Abuse in Care
Budget 2025 total funding over forecast period: $384.632 million for Vote Social Development component of initiative
This cross-agency initiative provides funding to enable the Government’s delivery of redress for abuse in state care following the Royal Commission of Inquiry into Abuse in Care. This includes a package of $503.2 million across multiple agencies.
For MSD, this initiative will:
- increase the average redress payment for survivors of abuse in state care by around 50 percent from $20,000 to $30,000
- increase MSD’s annual processing capacity
- allow survivors with a closed claim who have previously received payment for such abuse to access a top-up payment
- support the development and implementation of a common payment framework for the state redress system
- support a more consistent offer of support services to survivors.
Disability Support Services – Supporting Disabled People
Budget 2025 total funding over forecast period: $760.000 million
This initiative provides funding to meet the continued delivery of support to disabled people and their families. The funding will help meet demand and inflationary pressures on the services that DSS delivers.
Disability Support Services – Adjustment to Residential Care Funding
Budget 2025 total funding over forecast period: $240.000 million
This initiative increases funding to providers of residential care in community group homes, and to support service continuity for disabled people with specialist support needs living in aged residential care settings.
Further information on Budget 2025
Further information on Budget 2025 initiatives can be found online in the Budget 2025 Summary of Initiatives: