Social Development Minister Paula Bennett admits the Government “took a punt” on sweeping welfare reforms targeting youth, relying on little more than common sense.
But a new report appears to have validated that gamble, showing significant inroads have been made toward breaking the cycle of welfare dependency.
Ministry of Social Development figures released yesterday showed 16 and 17-year-olds on a benefit accounted for 70 per cent of the ministry’s future welfare liability.
By June 30 last year, that welfare liability was $76.5 billion, $7.4b lower than forecast, with $4.4b of the savings directly related to the reforms.
Hopefully that is just the start. The benefits from having a young person spend most of their life in work, rather than on welfare, is immense.
Just 18 months in, the Youth Services Programme has already seen a reduced risk of long-term benefit dependency among participants.
Most youth in the programme were also achieving at least NCEA Level 2 and had “improved social outcomes” for them and their children.
Ministry figures show that of those receiving the Youth Payment, 38 per cent were victims of domestic violence, 76 per cent had suffered emotional neglect and 5 per cent were either homeless or victims of sexual abuse.
“These are in general difficult and challenging young people,” Bennett said.
“You do not go and seek state support financially at 16 and 17 if you have had a blessed life in a warm loving environment, that’s been nurturing and had education as one of the foremost things of importance.”
And this has not been about just work testing people. It has been about investing money to help them get skills, get training, and have a pathway into work. It’s about spending money in the short-term to save in the long-term.