Welfare costs reducing

Paul Bennett announced:

Social Development Minister Paula Bennett has welcomed the latest valuation of the welfare system showing a significant reduction in the liability.

The June 2013 valuation shows the current lifetime liability[i] is $76.5 billion.

“Of the $10.3 billion reduction in liability[ii], $4.4 billion is due to Work and Income actively exceeding expectations by getting more people off benefit for longer, and less people coming onto benefit,” says Mrs Bennett.

Excellent.

“This translates to benefit payments being $180 million lower than expected for the year.”

Just over $1 billion of the $10.3 billion liability decrease is due to more sole parents going off benefit and fewer going on during the year.

“I hear from sole parents every week who say they’re really grateful for the support from Work and Income case managers; who are often the first to ask them what they want to do with their lives and then help them find work.”

“We provide childcare assistance, training, assistance with CVs, handling job interviews and help with the actual work search,” says Mrs Bennett.

The value in investing close to half a billion dollars in welfare reforms over the last two Budgets is evident in the results.

This is key. The Government did not just change laws around work testing and the like. They have invested hundreds of millions into training, childcare assistance and job placement to help people move from welfare into work.

The June 2013 valuation shows 62% of 30-39 year olds currently receiving benefits; first went on welfare as young people and constitute almost 80% of the total liability for this group because they’re long-term dependent.

“What’s really interesting; is that two thirds of people who went on benefit aged 16 or 17 also came to the attention of Child, Youth and Family as children and 90% lived in benefit dependent homes as children.”

A cycle of dependency.