New Social Development Minister Louise Upston says she’s expecting more beneficiaries to face sanctions under the Government’s plans to shake up welfare.

During the election campaign, National promised a range of changes to stop what it said had become “entrenched welfare dependency” under the previous government.

The party had said a “lax application of sanctions” had contributed to the problem.

Speaking to Q+A, Upston said of the number of people sanctioned: “I would expect it to increase. It’s a consequence of people not taking actions to help themselves.

“We now have 190,000 people on Jobseeker benefit – 67,000 more than six years ago.”

She continued: “We have seen an absolute blowing out of welfare dependency under the watch of Carmel Sepuloni and the Labour government.

“I don’t think that’s good enough.”

The minister said the Government would be pushing ahead with National’s plans to introduce a traffic light system for beneficiaries.

She described it as a “graduated series” of steps and, for people on the red light, pointed to non-monetary sanctions like money management and community work experience.

But according to National’s pre-election plans, other sanctions can include benefit reductions or benefit suspensions. Asked how people who have their benefits cut would pay to survive, the minister said there would be a “range of options”.

“If they are not fulfilling their obligations, then it is quite clear about the fact that the welfare system will not support them beyond that point,” Upston said.

When pushed on the question, she responded: “They might go with family, they might go with friends, there might be others that look after them.”

Minister defends changes to benefit indexing

Speaking to Q+A, Upston was also questioned about the new Government’s change to index unemployment benefits to CPI inflation rather than wage growth.

“CPI for beneficiaries is directly linked to the real costs that they face,” she said.

“And actually, I want to focus on having fewer people receiving welfare and have more people in work. Higher incomes in work and better life outcomes.”

She added: “It was interesting with the previous government. They moved from CPI to wages, and then they moved back to CPI. And then they were going to decide year by year. I think what’s really important is consistency.”

Analysis by the New Zealand Herald suggested a person on Jobseeker would be $50 worse off by the end of the decade as a result of a switch to CPI indexation.

Govt policies are cruel, Greens say

Green Party social development spokesperson Ricardo Menéndez March reacted to Upston’s interview this morning, describing proposed additional sanctions as cruel.

“Louise Upston talked of her concerns about the poor outcomes of people on the benefit, without acknowledging the fact that successive governments have set benefit levels below the poverty line – a problem she plans to make worse.

Ricardo Menéndez March (file).

“The minister also failed to acknowledge the impact of benefit sanctions on children or that people with lifelong medical conditions are made to constantly prove their conditions to the Government rather than being treated with respect and dignity.

“Benefit sanctions strip people of their legal means of survival and have never shown to support people to meet their aspirations.

“Instead, benefit sanctions throw people into further poverty, debt and potentially homelessness, setting their lives back for many years,” he said in a media release.

National’s pre-election welfare policy

During the election, National pledged to introduce more sanctions for unemployed beneficiaries who “persistently” do not meet benefit obligations.

The sanctions could include mandatory community work experience of up to three months, benefit suspensions or reductions, and Work and Income having a greater role in managing a beneficiary’s money.

National would also require jobseekers to reapply for the benefit every six months, require documented proof of job applications and interview attendance to continue receiving the benefit, and impose a one-month benefit stand-down for people evading arrest warrants.

Upston said at the time: “New Zealanders will always give a helping hand to those who need it, but taxpayers are rightly concerned about the number of people on the jobseeker benefit having grown while jobs were plentiful.

“Those who can work, should work.

“National will introduce a traffic light system, making it crystal clear to unemployed people receiving a jobseeker benefit what their obligations are, and what consequences they will face if they refuse to do their bit.”

National’s Jobseeker benefit traffic light system plan

  • Green (compliant) – Meeting obligations to prepare for or find work. No change to benefit
  • Orange (some risk) – First or second breach of obligations to prepare for or find work will see additional requirements and targeted support applied, e.g. more regular check-ins and/or attendance at job workshops
  • Red (high risk) – A third breach of obligations will result in sanctions including benefit reductions, benefit suspension, money management and mandatory community work experience

Q+A with Jack Tame is made with the support of New Zealand on Air