The Beehive building

Benefit System Update - 2021

Overview

The previous Benefit System Update - August 2020 described the initial impacts of the COVID-19 pandemic on main benefits and hardship assistance, the economy, and the labour market up to early August 2020, with a focus on the period surrounding the first national Alert Level 3 and 4 restrictions in March 2020.

The Benefit System Update – 2021 builds on the previous report by exploring the impacts of subsequent shifts to higher Alert Levels, and provides a cohesive picture of how and why the benefit system has changed from July 2020 to June 2021. Following the Delta outbreak in August 2021, we extended our analysis to also include initial trends observed in the weeks after the outbreak.

This report also explores how well our priority groups (youth, sole parents, women, Māori, Pacific Peoples, as well as people with health conditions and disabled people) have fared over the last year.

Key Findings

Overall, the report shows main benefit numbers grew rapidly from March 2020, but peaked significantly lower and decreased more quickly than expected. We also continued to see large numbers of people moving off benefit, particularly into work. However, main benefit numbers remained higher than pre-COVID-19 levels and some indicators of weakness and uneven recovery across industries, regions, and priority groups remained.