Welfare savings

Kate Chapman at Stuff reports:

Welfare reforms are expected to save up to $1.6 billion over four years.

Social Development Minister Paula Bennett yesterday introduced the second round of reform legislation.

The Social Security (Benefit Categories and Work Focus) Amendment Bill replaces the current benefits with three new categories: Jobseeker Support, Sole Parent Support and the Supported Living Payment.

I see the savings as a bonus, but not why this should be done. I think the major beneficiaries of these reforms will be the families of those who move into work.

What is described as an investment approach – based on an insurance model – is expected to save between $900 million and $1.6 billion by June 2017, with 44,000 people expected to come off benefits and up to 6000 working part-time.

I presume this figure doesn’t just include the reduction in benefit expenditure, but the increase in tax receipts as more people work.