National’s welfare reform

There are three documents. The release, the speech and the Q&A. Key points:

• A new jobseeker support benefit to replace the dole, sickness benefit, widows, women alone and DPB (if children over 14)
• part-time work expectation for sole parents with children over 5 years
• full-time work expectation for sole parents with children over 14 years
• Sole Parent Support to replace DPB
• new Supported Living Payment to replace Invalid’s Benefit and DPB care of sick and infirm
• A sole parent who has another child while on a benefit will be exempt for one year, in line with parental leave, before work obligations resume
• Aim is to move 46,000 off welfare
• Cost of $130m over four years
• Estimated savings from welfare reduction – $1b over four years

This is a huge shake up. It is an end to being on the DPB meaning no need to look for work for decades, but the changes go well beyond that.

Currently 1 in 12 people of working age are on welfare. Over half have spent greater than five years on welfare.

The sickness benefit changes are also significant. If you get sick or injured, then you get a temporary exemption from job seeking obligations. But you don’t just get left on the sickness benefit for years as a de facto invalids benefit.

The Invalids Benefit basically does not change, apart from the name (which is a sensible change as the name is demeaning, as the criteria includes those terminally ill etc).

The cost of the policy at $130m is a lot, but a worthwhile investment. This will mainly be costs of helping get people into work with assistance for childcare, training, workplace support etc.

There’s also a nice incentive for those who return to work before they have to (for sole parents). If they do, then they’ll carry on getting the benefit for a number of weeks (declining at $100 a week).