Benefit Forecasts for the Half Year Economic and Fiscal Update 2023
The Treasury’s Half Year Economic and Fiscal Update (HYEFU) released on 20 December 2023 includes benefit number forecasts as part of the overall fiscal forecasts
The Ministry of Social Development’s (MSD) benefit forecasts were finalised using benefit data up to October 2023. This publication describes the key benefit number forecasts from the Half Year Economic and Fiscal Update (HYEFU) 2023.
The last forecast was the Pre-election Economic and Fiscal Update (PREFU) 2023, which was published in September 2023. These forecasts are important because they are used to inform Budget decisions and also because the New Zealand Government spends a large portion of the Budget on Benefits or Related Expenses. Expenditure on Benefits or Related Expenses typically accounts for around 30 percent of Core Crown Expenses.
We expect to see more people supported by a working age benefit through 2024, in line with the Treasury’s economic forecast
MSD have forecast the number of people on a working age benefit to continue rising and peak in January 2025 (see Figure 1).
Figure 1: Working age benefit numbers
Figure 1 shows the historic and forecast number of people on a working age benefit.
The dotted line shows the actual number of people that received a working age benefit between June 2016 and October 2023. Our forecasts of the number of people on a working age benefit from PREFU 2023 and HYEFU 2023 are displayed by the dashed line and solid line, respectively.
In October 2023, there were around 362,500 working age people receiving a benefit, which was around 100 more people (0.04 percent) when compared to the PREFU 2023 forecast.
In the HYEFU 2023 forecasts, the number of people on a working age benefit is expected to continue increasing and peak at around 384,800 in January 2025. This is around 1,900 people higher than expected at PREFU 2023.
After January 2025 the number of people on a working age benefit is expected to decrease to around 361,500 by June 2028.
Figure 2: Jobseeker Support
Figure 2 shows the historic and forecast number of people receiving Jobseeker Support.
The dotted line shows the actual number of people that received a benefit between June 2016 and October 2023. Our forecasts of the number of people expected to receive Jobseeker Support at PREFU 2023 and HYEFU 2023 are displayed by the dashed line and solid line, respectively.
In October 2023, there were around 182,900 people receiving Jobseeker Support, which was around 400 fewer people (0.2 percent) when compared to the PREFU 2023 forecast.
In the HYEFU 2023 forecasts, the number of people receiving Jobseeker Support is expected to continue increasing and peak at around 198,500 in January 2025. This is around 1,100 people higher than expected at PREFU 2023.
After January 2025 the number of people receiving Jobseeker Support is expected to decrease to around 180,700 by June 2028.
