Reducing long-term welfare dependency

Work is at the heart of a better quality of life for New Zealanders. Being in paid work rather than on a benefit leads to better health and wellbeing. It brings in extra income, builds pride and connects people to their community.

What we want to achieve

The Government Theme of Reducing Long-term Welfare Dependency has one specific result area: Reduce the number of people who have been on a working age benefit for more than 12 months from 78,000 in April 2012 to 55,000 by 2017. We anticipate being at 69,500 by June 2014. The Ministry co-ordinates the cross-agency effort to achieve this result. 

We will monitor alignment of this result area to the investment approach to ensure we have a target that reflects a focus on those most likely to stay on benefit, and who have a life time cost to New Zealand.

We are taking a more active approach to help people where ever possible to get into work and stay there. We will deliver the Government’s Welfare Reform Programme and transform the welfare system into a modern, active and work-focused system that focuses on what people are capable of, not what they cannot do.

Specifically, in our context, we will deliver on the Ministry Outcome: 

•  More people into work and out of welfare dependency.

More people into work and out of welfare dependency

Linking it all together

Government Theme	Reducing Long-term Welfare Dependency
Ministry Outcome	More people into work and out of welfare dependency
Ministry Intermediate Outcomes	Fewer clients start welfare	Fewer clients are reliant on welfare
Ministry Interventions	Triage services Work-focused interventions Comprehensive work assessments Work test obligations Work with people on a benefit by connecting them with opportunities to work on or improve their skills
Ministry Output Expenses that Contribute	Vote Social Development Administration of Trialling New Approaches to Social Sector Change Management of Student Loans Management of Student Support excluding Student Loans Planning, Correspondence and Monitoring Promoting Positive Outcomes for Disabled People Services to Protect the Integrity of the Benefit System Social Policy Advice (MCOA) Tailored Sets of Services to Help People into Work or Achieve Independence Vocational Skills Training Vote Veterans' Affairs – Social Development Processing and Payment of Veterans' Pensions

More people into work and out of welfare dependency

The Ministry is targeting its resource to those who need it most and moving people off welfare and into work. This will lead to better lives for people and their families.

The next three years

implement welfare reforms…

Our priority for the next three years is to complete the fundamental reform of the welfare system and the way it is delivered. We will make the welfare system more active, modern and work-focused to reduce the long-term welfare dependency experienced by too many New Zealanders. 

simplifying the current benefit structure…

From July 2013, benefit structures will be simpler to understand and use. The current benefit types – unemployment, domestic purposes, sickness, widow’s and invalid’s benefits – will be replaced. The three new benefit categories will be Jobseeker Support, Sole Parent Support and Supported Living Payments.

The changes clarify who is expected to be available for work and bring in requirements for jobseekers to be drug free. To support the policy changes, case managers will also have the ability to actively work with a larger number of clients and some client obligations will change.

The system will become more agile and make more sense. For those clients who have outstanding warrants of arrest, we will stop payments. The new system places health and education requirements on parents to ensure children in beneficiary homes get the best possible start in life.

These changes build on the platform of new work-test obligations for some welfare recipients that were introduced in October 2012. 

sole parents with children over 14…

From July 2013, legislation changes will also see sole parent benefit recipients currently on Domestic Purposes Benefit – Sole Parent or Widow’s benefit moving to Jobseeker Support (with full-time work obligations) when their youngest child turns 14.

investing up front…

There are large numbers of people on a benefit. Taking into account the longer-term costs of benefit spending, it makes economic and social sense to invest more up front so more people get into work sooner. For those who cannot work, the system will always provide support.

A key part of the welfare reform is the investment approach. It will help us make more informed decisions on where and when to focus our services for the greatest impact. This relies on flexible funding arrangements so that resources can be shifted to investments that offer a better return and accountability measures that support a shift to a long-term focus.

By using our own knowledge, actuarial advice and better data, we will make improved evidence-based strategic decisions to focus resources. This is not a one-size fits all approach. We will invest in those most likely to stay on benefit for a long time and who will incur the greatest welfare costs in the future.

With fast feedback and good data, this approach will grow and strengthen over time. Business intelligence is one of the key elements of the Investment Approach, bringing together high quality information about business, clients and evidence about what works to achieve employment outcomes. The right information will enable better identification and segmentation of different benefit groups as well as the enforcement of obligations and tracking of outcomes.

a new way of delivering services…

The Investment Approach is supported by a new work-focused service delivery model. Evolving over the next three years, we will introduce reduced caseloads enabling us to provide more intensive case management to those clients who need it. This will be achieved through introducing new information technology, improving information tools and smarter practices such as removing some transactional processing.

The model will have different levels of intensity that reflect how we work with clients based on their likelihood of long-term benefit receipt. The levels include:

• Work Focused Case Management – personal intensive support for work obligated clients
• Work Search Support – ‘one to many’ support for new clients with some employment barriers
• General Case Management – support for clients who do not have active work obligations
• Self Service Support – support for clients to manage their own job search activities.

Implementation will be progressive. Our services will be based on enhanced profiling to identify the optimum level of support required to meet client needs. Trialling new service methods to identify what works for client groups, means we can test our ideas and evaluate whether they should be implemented more generally. This is about finding the best ways of getting clients into work. 

delivering results together…

Making the most of the strength and reach of our partners in the sector is key to the success of the welfare reform. We will work better with our service providers, being clearer about the outcomes we want and increasing flexibility for them to be achieved. Above all we are focused on results and on those services that make a difference.

Our work with industry associations and large employers on the demand side continues to generate employment opportunities. In partnership with industry we will purchase industry training programmes that focus on specific workforce skills and respond to skill shortages. 

supporting people with ill health or disabilities into work…

The enabling good lives approach requires that there is a greater flexibility and individualisation of disability supports while at the same time ensuring the system enables people to be in control of their lives.

We are committed to a shared outcome under the Disability Action Plan to increase the number of disabled people in paid employment. The Ministry will work with health professionals to focus more on what disabled people can do and what support they need to be in work.

We are also thinking differently about how we work with people in the benefit system who are either sick or disabled.

From July 2013, legislation changes allow greater information requirements to stream beneficiaries into appropriate services according to the risk of remaining on long-term benefit. Our approach to this group will include: 

• simplified access to supported living payments for those who are terminally ill, or have severe, irreversible health conditions or disabilities
• improved self-assessment to determine eligibility and obligations using expanded sets of questions to collect a broader range of information
• less intensive interventions for people who only need income support and who have jobs to return to or require income support with less intensive case management
• structured interviews for clients not making progress as expected and to identify barriers to work
• in-depth and intensive independent work assessments carried by an independent health practitioner to determine a beneficiary’s work ability.

We will trial a new process and certificate to support this shift. 

Other changes to the way we work with these clients will include removing the requirement for additional assessments of work abilities and allowing easier access to the Supported Living Payment for those clients with a terminal illness, serious and deteriorating neurological conditions, or a severe intellectual disability. 

the role of the Work and Income Board…

As we progress through these reforms, we will continue to work closely with the Work and Income Board. The advice and expertise provided to the Ministry by the Board, coupled with the assurance to Joint Ministers, tests and challenges our thinking as we implement Welfare Reform policy changes and the Investment Approach. The Board will also continue to support and promote innovation. Robust debate and better decision-making will get people back into
work faster.

How we will demonstrate success

We will know that we have achieved our outcome when more people get into work and out of welfare dependency.

We will co-ordinate the cross-agency response to Government Result Area Number 1 Reduce the number of people who have been on a working age benefit for more than 12 months.

The success of outcomes of the Welfare Reform programme will be measured through the actuarial Investment Approach, which will produce quarterly and annual valuations that will report changes in the future liability of the benefit system. It will attribute change to drivers of the future liability that the Ministry are able to influence.

*New indicator for 2013/2014