Lillian
Hanly, Political reporter
New
“non-financial” benefit sanctions starting today are about
having “more tools available” than the current options, says
the minister for social development.
But the Greens
spokesperson for social development says it’s “misleading”
to label them as non-financial, because the impacts of those
sanctions will be financial.
Ricardo Menendez March
also criticised Louise Upston for going ahead with the
change, despite a note by officials it could risk increasing
financial hardship, a statement the Minister
rejects.
From today, two new sanctions can be applied
when someone on a main benefit does not meet their
obligations.
The first was ‘Money Management,’ where
someone who did not comply would have half their benefit put
on a payment card for four weeks.
“The card can only
be used at approved shops for groceries, transport, health,
and education-related items,” said Upston.
People
would still get the remainder of their benefit, as well as
any supplementary assistance, directly into their bank
account.
Upston called ‘Money Management’ a
“non-financial sanction” and said it would only be available
to clients for their first offence, if they are in “active
case management” or have dependent children.
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Those who
do not meet that criteria would have a regular financial
sanction imposed as before.
The other new sanction –
‘Community Work Experience’ – meant those who did not meet
their work obligations might have to complete at least five
hours per week for four weeks of work with community or
voluntary sector organisations.
Ministry of Social
Development staff will consider a client’s circumstances
before deciding on and imposing the new sanction to ensure
it is the best option for a client.
“These very fair
and reasonable sanctions will allow clients to continue
receiving their full benefit, instead of the 50 per cent
reduction they would have experienced with a financial
sanction,” Upston said.
Upston said she had heard
people were concerned, particularly if there was a household
with children, if a benefit was reduced. This legislation
provided more options, she said, and the new sanctions stay
in place for four weeks, “which will support their efforts
to find a job.”
The Regulatory
Impact Statement for the legislation had outlined a
payment card “exacerbates the risk of a client facing
hardship”.
But Upston “utterly rejects” that, “because
if you have 100 percent of your benefit with 50 percent of
it on a card, that is still better than only getting half
your benefit or no benefit” – referencing the previous
sanction options available.
She called it a “sensible
move” and said the new measures will “encourage people off
welfare and into work,” but couldn’t say exactly how many
people would move into work as a result of this
policy.
“The new sanctions will ensure accountability
in the welfare system for people who don’t meet their
obligations, while also recognising that reducing benefits
isn’t the answer for everyone.”
But only about 1.2
percent of beneficiaries are currently not complying – about
4000 people at the end of April 2025 – and Upston said there
are “only 288” children affected within those 4000
people.
It was not possible to know exactly how many
people would have these new sanctions imposed because it
depended on decisions by case managers, but the intention is
to get people into work, she said.
“I want them to
realise we’re serious about them taking the steps to find a
job, and if they don’t, there’s a consequence,” said
Upston.
“At the end of the day, we want fewer people
on welfare and more people in work.”
When asked how
many of those not complying would likely move into work as a
result of a new “non-financial” sanction, Upston referenced
numbers from the past year showing an increase in the number
of people leaving the benefit for work.
“It’s up 11
percent on the same time a year ago” she said, which was
“great news”, but was not able to quantify how this policy
would make a difference.
Green MP Ricardo Menendez
March has ridiculed the changes.
“The minister has
been misleading the public around the impacts of this
sanction not being financial, they are financial, and they
will cause harm in our communities, which is why the Greens
will repeal it as soon as we get into power.”
He said
people would not be able to access financial assistance such
as hardship grants, and the “end result will be families
unable to afford their rent, their bills and potentially
leaving countless of families at risk of
homelessness”.
RNZ
reported in March that government data had showed
beneficiaries sanctioned with money management cards will
often be unable to pay rent, putting them at risk of
homelessness.
March raised this issue, saying the
average person on the job seeker benefit paid more than 50
percent of their income on rent, and those impacted by the
sanction would be “unable to afford to keep a roof over
their head or put food on the table”.
Upston
acknowledged some people may get supplementary financial
assistance as well, to cover rent that was more than half
their income, and if that was the case, “they will not be an
appropriate candidate for money management”. She said
Community Work Experience might be a better option for them
and those decisions were for MSD case managers.
March
referenced the Regulatory Impact Statement for the Bill
outlining the changes and the potential for hardship to
increase, saying the Minister’s heart was “rotten to the
core” for going ahead with the changes.
“She knows
benefit sanctions do not work.
“She has been told by
her own officials that things like compulsory money
management can risk increasing hardship, has been told by
beneficiaries that these kind of policies don’t work, and
she does not care.”
Upston said in response she did
care for people, their futures and their
opportunities.
“I’m very committed to ensuring more
New Zealanders are in work than on welfare. And I care
deeply.
“I don’t want to see people trapped on
welfare. I want to see them and their families get ahead.
And that is because I care.”
In regards to the
Community Work Experience sanction, Menendez March said
community organisations did not support it. He said being
subjected to these sanctions put people under more stress
and made it harder for people to enter into
employment.
“This just shows that sanctions like
community work experience are all about cruelty and stamping
down on the poor, rather than supporting people into
employment.”
Labour leader Chris Hipkins also
criticised the move, saying it was “mean and petty” to
impose sanctions on people in order to try and get them into
jobs that “don’t actually exist”.
“Actually, they [the
government] should be focused on creating jobs, rather than
punishing people for not taking jobs that aren’t
there.”
He said things were “getting harder under this
government,” pointing to the Treasury forecasted
unemployment getting higher.
ACT leader David Seymour,
whose party campaigned on the policy, said the benefit is
“there for bad times, not for a long time,” and if someone
wants the freedom to spend cash “get a job like the other
five out of six working age New Zealanders”.
Seymour
said he was proud to see his party’s policies reflected in
the government’s agenda, showing if you “campaign hard” and
release ideas and policy throughout opposition “you really
can make a difference”.
Seymour said no country can
succeed with one in six working age people on a benefit, and
ACT had long campaigned on giving “money in kind instead of
cash”.
“We’ve got to start introducing mutual
obligation if you don’t show up and actually look for work,
we’ll stop giving you cash, and we’ll start giving you the
things you need in kind on a plastic card.
“If it’s
not acceptable to stop the benefit altogether, then in kind
payment is one way of sending the message: if you want the
freedom to spend cash as if it’s your own, then you should
earn it yourself.”
Seymour acknowledged there should
always be support if someone is facing a challenging time,
but he expected people to “meet the taxpayer who’s paying
for all this halfway”.
Also from today, some people
and their partners will have to have a completed Jobseeker
Profile before their benefit can be granted, and an
obligation “failure” will now count against a person for two
years rather than
one.
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