Welfare costs reducing

January 16th, 2014 at 4:00 pm by David Farrar

Paul Bennett announced:

Social Development Minister 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.

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21 Responses to “Welfare costs reducing”

  1. SPC (5,473 comments) says:

    Was there any assessment of the increase in WFF cost resulting from more of those on the DPB going into low paid work and or increase in child care subsidy liable?

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  2. SPC (5,473 comments) says:

    “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.”

    Many of those born between 1973 and 1982 entered the workforce as young people during the early 1990′s when unemployment was 10% overall and much higher for new workers leaving school.

    That said it’s good that those who resorted to the DPB then, have help finding work/becoming work capable.

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  3. Chris2 (768 comments) says:

    Watch the Left come out and say this “saving” should be passed onto welfare beneficiaries so they can enjoy a living wage….

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  4. SPC (5,473 comments) says:

    Chris2, no one on the left conflates any effort to reduce child poverty in benefit dependent families with a higher MW or a living wage campaign.

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  5. Rosa19 (23 comments) says:

    LM makes some good points

    http://lindsaymitchell.blogspot.co.nz/2014/01/the-truth-about-welfare-dependence-and.html

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  6. Kea (11,878 comments) says:

    Good news. Now if only we could take the next step and stop paying women to have babies. Prostitution is best handled by the private sector.

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  7. labrator (1,849 comments) says:

    Now lower tax across the board so more people can get hired.

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  8. hj (6,758 comments) says:

    Was just reading the latest North and South. It hsd a section on how individuals with wrecked homes are coping since the earthquake. One was a brown woman in a wrecked HCNZ house. Is expected 6th child……. She thicnks her role in life is to give life (she is cactus in a pot).

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  9. thor42 (971 comments) says:

    One of the crucial things is to try to avoid granting benefits to those under 20. As the figures show, if benefits could only be paid to those aged 20 or over that would make a *big* difference. The under-20s are then *forced* to choose either work, training or study (at uni or polytech) and (dare I say it) such a thing is *good* for them.

    The other crucial thing is to remove all incentives for the welfare lifestyle, and it is in this area that work is still needed. There should be no welfare payments for any more than 2 children, and no payments for a child conceived or born while the mother is on a benefit (even if it is her first or second). That would hugely slash the uptake of benefits as a lifestyle.
    Not only that, but there would be *far* fewer children following the lead of their beneficiary parents, going on a benefit themselves – especially if they couldn’t do so until they were 20.

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  10. OneTrack (2,847 comments) says:

    Oh no, less people on the dole queue means less Labour, Green and Mana voters. What will we do now?

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  11. igm (1,413 comments) says:

    Get rid of DPB unless it is a genuine request and stop paying losers to breed, claiming taxpayers should feed their unwanted but financially necessary sources of income. It should only be paid to those who have lost breadwinners, not those that have four and five kids with different fathers . . . come on give taxpayers a break NOW! Most of us are sick of these bludgers who have replaced decency with lives built on ideals of entitlement.

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  12. SPC (5,473 comments) says:

    thor42 the age has been increased to 18 for benefits, the issue is of course the educational capability to partake in training and sufficient training places for those who discontinue school under age 18 (leaving age being 16).

    That realised a move to 20 is a goal down the line.

    However this is the work tested benefit and does not apply to the DPB so much – there having a child while on the DPB results in moving to a work test when the child is one. This means that no one can extend their time on the DPB by having another child, quite the reverse it could reduce the time when the exemption from a work test applied (currently when the youngest reached 5 for working part-time and 12 for working full-time).

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  13. thor42 (971 comments) says:

    @SPC – thanks for those comments.

    @Rosa19 – Agreed – Lindsay Mitchell is *outstanding* in her analysis of this area. Her latest post (the link that you posted) is particularly good.
    It really drives home how vital it is that we try to avoid paying benefits to those aged under 20.
    If the Nats posted that graph (that Lindsay has on her page) in their election material, it would really drive home the cost to the country of having young people on benefits.
    In spite of what the Left would say, telling people about that is not “beneficiary bashing” – it is informing people of the *truth*.

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  14. publicwatchdog (2,320 comments) says:

    How about ‘corporate welfare’ costs?

    Are they reducing?

    Anybody checking?

    http://www.scoop.co.nz/stories/PO1111/S00095/wheres-nationals-corporate-welfare-reform.htm

    Penny Bright

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  15. Johnboy (15,602 comments) says:

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

    Fuck I hope all of that doesn’t have to be repaid in whats left of my poor old lifetime. Richprick as I may be it will be a bit of a struggle! :)

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  16. Johnboy (15,602 comments) says:

    First again!!!!! :)

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  17. Johnboy (15,602 comments) says:

    It’s OK Penny. Sheep don’t have AID’s! :)

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  18. wat dabney (3,724 comments) says:

    How about ‘corporate welfare’ costs? Are they reducing?

    Perhaps you missed the story in the last couple of days where the government refused to pay through the nose for a locally-built boat?

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  19. RRM (9,670 comments) says:

    A cycle of dependency.

    A cycle of uselessness.

    30-39yos should be fit enough to be carrying rocks. There are plenty of roading projects that don’t happen because the cost of building them commercially prevents the cost-benefit analysis from stacking up. Whereas there are all these people we are already paying, who could be doing the work..

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  20. Bob R (1,357 comments) says:

    ***“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.”***

    Is WINZ aware that there are contraceptive birth shots available now? Why aren’t beneficiaries required to have them as a condition of ongoing entitlements? It’s morally wrong that people can _increase_ their benefit payment and burden on others by having additional children. It should be a condition of welfare.

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  21. HC (152 comments) says:

    Hooray,

    what a nice distraction by Paula Benefit from the dismal results for the much cheered ideas of “drug testing” beneficiaries looking for work. 0.27 per cent failed or refused a drug test, while Bennett tried to tell us that drug taking and failing employment tests and expectations were so widespread. Now she comes out with some made up hypothetical welfare cost projections, that have supposedly gone down. What a nice actuarial window dressing trick, talking about figures and projections that say little.

    Yet what do we have? More may be forced off benefits, with various new policies, and yes, some will get jobs. Many will though only end up in low paid jobs, and live from minimum or just above minimum wage income, many only part time, so they will end up as working poor:
    http://www.voxy.co.nz/business/more-evidence-significant-working-poor-sfwu/5/155879

    And yes, getting a job will not get rid of poverty, which of course is something few reading and commenting on this thread may ever have known or may have to be bothered with themselves:
    http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=11171548
    http://union.org.nz/news/2013/most-people-still-waiting-see-benefits-gdp-growth

    Living off a benefit is an exercise that is a major challenge to those that depend on it and nothing else. Only by chipping together, sharing cramped housing and such measures do others manage. That is exactly the reason for much overcrowding and people living in sleep-outs, garages, caravans and sleeping in lounges with family and friends.

    So yes, we had Christmas spending being up, there are some signs of growth, which though is largely due to the usual low value added dairy products exported to places like China, to more raw logs and raw fish and the likes going there. China is working on boosting home production, and tightening up label and other standards, so NZ dairy exporters and farmers will soon feel a new pinch coming. Also does the competition in Latin America, the US, Canada and Europe not rest in sweet dreams, and they are already producing more of dairy products, so that the price on the market goes down now.

    And yes, there is the Christchurch rebuild, which of course boosts GDP and growth figures, and creates employment for thousands, but do not rely on that to solve the long term structural issues NZ faces, with over dependence on low value or no value added primary production and exports. China, India and a few other economies also face major challenges this year, and a slowing there appears evident.

    And what about all those coming off benefits, that end up without a job? Where are they disappearing, and what is happening to them? Let us also not forget how Principal Health Advisor Dr David Bratt, the bizarre character who likens benefit dependence to “drug dependence”, is pushing the agenda to urge sick and disabled to look for work on the open job-market. Now, that has just started, but some here are not familiar what that entails. I would dare to say, it will result in something similar as in the UK, if the same direction is followed and similar measures being implemented here:

    http://blacktrianglecampaign.org/2012/09/26/dwpunumatos-scandal-there-is-a-limited-correlation-with-illness-disability-and-the-capacity-for-work-prof-mansel-aylward-to-australian-insurance-conference/

    http://blacktrianglecampaign.org/2013/08/28/unums-unaccepatable-influence-in-the-formulation-of-uk-dwp-atos-disability-assessment-regime-letter-to-president-of-the-faculty-of-occupational-medicine-royal-college-of-physicians/

    In 2011 over 1,100 were even according to the DWP considered to have likely died early, or taken their lives, due to not coping with unreasonable work expectations, due to the affected being seriously ill and disabled.

    But one main culprit behind all of this, a so-called “professor” Mansel Aylward, who was heading a UNUM Provident sponsored “research centre” at Cardiff Uni for years, and who whispered into Paula Bennett’s ears, he gets off scot-free, preparing for his retirement with many “honours” in his home in Wales:

    http://accforum.org/forums/index.php?/topic/15188-medical-and-work-capability-assessments-based-on-the-bps-model-aimed-at-disentiteling-affected-from-welfare-benefits-and-acc-compo/

    Let us wait and see how all this will pan out, and when the first confirmed self harm or suicide cases happen in NZ. In February they will commence with outsourced medical and work capability testing here in NZ. A Dr David Beaumont, who advised MSD and ACC on the great benefits of Aylward’s “bio psycho social model” for diagnosis, assessment and treatment of sick and impaired, he is all hot for it too, running his ‘Pathways to Work’ agency for own gains. He worked for ATOS, who did the outsourcing int he UK for years, and who also liaised with Aylward and others.

    He is now doing well in NZ, so do others, offering contracted services to ACC, WINZ and so forth, all ultimately benefiting from that tax payer spent dollar, which most of you pay. The end results will likely be little, but who cares, it is private entrepreneurship, consultancy and so forth, that are what this government wants, and it makes some rather well off, while what they do will years down the track hardly make any difference. That is apart from the ones that die, suffer and end up with even worse health conditions later on.

    http://accforum.org/forums/index.php?/topic/15264-welfare-reform-the-health-and-disability-panel-msd-the-truth-behind-the-agenda/

    And what about the long queues at the City Missions before Xmas?

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