Benefit Forecasts for the Half Year Economic and Fiscal Update 2022
The Treasury’s Half Year Economic and Fiscal Update released on 14 December 2022 includes benefit number forecasts as part of the fiscal forecasts
MSD’s benefit forecasts were finalised using benefit data up to October 2022. This publication describes the key benefit number forecasts from the Half Year Economic and Fiscal Update (HYEFU) 2022.
The last forecast was published at the Budget Economic and Fiscal Update (BEFU) 2022 which was published in May 2022. These forecasts are important because the New Zealand Government spends a large portion of the Budget on Benefit or Related Expenses and these forecasts are used to inform Budget decisions. Expenditure on Benefits or Related Expenses typically accounts for around 30% of Core Crown Expenses.
We expect to see more working age people supported by a benefit from around mid-2023 in line with Treasury’s economic forecast
The Treasury are expecting a period of lower economic and employment growth than forecast at BEFU 2022 from around mid-2023. As a result, we expect increases in the number of working age people receiving a benefit between mid-2023 and January 2025 (see Figure 1).
The number of people receiving Jobseeker Support follows a similar trend to working age benefit numbers. Jobseeker Support numbers are expected to increase between mid-2023 and January 2025 (see Figure 2).
Figure 1: Working age benefit numbers
Figure 1 shows past working-age benefit numbers as well as forecast numbers.
The grey line shows the actual number of people who received a working age benefit between June 2015 and October 2022. Our forecasts of the number of working age people expected to receive a benefit from BEFU 2022 and HYEFU 2022 are displayed by the light blue line and dark blue line, respectively.
In October 2022 there were around 344,800 working age people receiving a benefit, which was around 4,200 more people than expected at BEFU 2022.
At BEFU 2022 we expected the number of working age people receiving a benefit to increase from around mid-2023 to around 354,500 in June 2026. At HYEFU 2022 we still expect that numbers will increase from around mid-2023, reaching around 387,000 in January 2025. After January 2025 the number of working age people receiving a benefit is expected to decrease to around 354,100 by June 2027.
Figure 2: Jobseeker Support
Figure 2 shows the past as well as the forecast number of people receiving Jobseeker Support.
The grey line shows the actual number of people who received a benefit between June 2015 and October 2022. Our forecasts of the number of people expected to receive Jobseeker Support from BEFU 2022 and HYEFU 2022 are displayed by the light blue line and dark blue line, respectively.
In October 2022 there were around 169,600 people receiving Jobseeker Support, which was around 2,600 more people than forecast at BEFU 2022.
At HYEFU 2022 the number of people receiving Jobseeker Support is expected to increase from around mid-2023 and reach around 205,100 by January 2025. After January 2025 the number of people receiving Jobseeker Support is expected to decrease to around 180,600 by June 2027.
