MSD using data

February 20th, 2014 at 12:00 pm by David Farrar

CIO reports:

Paula Bennett, Minister for Social Development, reveals the critical role data analytics is playing in reducing the number of people on welfare, and deciding which programs to target vulnerable citizens, especially children.

Analytics has helped in investing and using this data for positive action and make a massive influence in the lives of New Zealanders.

“Without using data analytics, we will be throwing a lot of money,” she says in her keynote the SAS User Conference in Wellington. “We will not be getting into the heart of the problem, we will not be putting resources and investment where these are needed,” she says. 

“Since 2011, analytics has been at the heart of our welfare reforms,” says Bennett. While cognisant of the criticisms against her when the welfare reforms were announced, she lists the compelling figures on how the government applied analytics to determine funding for programs and beneficiaries.

A key feature used by the government is analytical technical segmentation, she says. This looked at the welfare system at macro level, an overall evaluation, and how much it is costing over a lifetime of the current population.

We spend an average of $22 million dollars a day on welfare, $8 billion a year, she says. The projected lifetime cost for people on benefit was $78 billion.

This baseline valuation of the welfare system is at a level that has not been attempted anywhere in the world, she says. “It is a pretty compelling story on why we want to look at this population to see what we can do,” she says.

The way MSD is using data analysis is gaining attention around the world. The lifetime cost and investment approach is leading edge stuff, and there is a lot of interest from other countries about how NZ is doing it.

This doesn’t necessarily mean spending less in the short term. To the contrary it has often meant spending more to help people into work, as the short-term cost of that assistance is less than the longer term cost of them remaining on welfare.


Results matter, not location

January 23rd, 2014 at 10:00 am by David Farrar

The Herald reported:

Beneficiary advocates are angry that an Australian company has emerged as the big winner in an experiment that will pay contractors up to $12,000 to help a sole parent or a person with mental health issues into paid work.

How terrible. A company wins a contract to help people into work.

Perth-company Advanced Personnel Management (APM) has won pilot contracts for people with mental health conditions in Auckland, Waikato, Christchurch and Southland, and for sole parents in the Bay of Plenty, Wellington, Nelson and Canterbury – more than any local agency in the Work and Income tender.

So why is this?

APM’s website describes the company as “the largest private sector provider of Australian Government funded vocational rehabilitation services and disability employment services”. It says New Zealand operations started in 2012 with vocational rehabilitation contracts with the Accident Compensation Corporation (ACC).

Because they already have significant experience in this area.

Beneficiary Advocacy Federation co-ordinator Kay Brereton said the contracts should have gone to more local agencies such as the West Auckland Living Skills Homes (Walsh Trust), which won one of the mental health contracts, and the Kawerau Job Centre, which won a sole-parent contract.

So they also won contracts, but the whinge is that this Australian company won some also. I’m in favour of having lots of companies win contracts, and then judge them on results.

Strive Community Trust chief executive Sharon Wilson-Davis said she did not bid for the contracts and allowed an existing sole-parent contract to end late last year because she felt it would be impossible to achieve the work placements required to earn fees under the new pilots.

“A lot of these people certainly want to work but sometimes you are better off to get them into further training,” she said.

“Otherwise if you push them into these low-paying jobs, then when those jobs go they are back in the same place.”

Glad they are not one of the companies, with an attitude that it is better to remain out of work entirely, than take up a low paying job which might not last forever.

After the outward signs of success collapsed around her, Misty Leong was comforted by her teenage son.

When her husband left, she had to give up her successful real estate business to look after her daughter who was just 2, her son, and her own elderly mother.

It was 2009, in the early panic of the global financial crisis, and no one was buying houses anyway. Ms Leong went bankrupt. Her $1.8 million property was lost.

“I lost my health, money, property, everything,” she says. “But my son, he says: ‘Mum, you are still strong.”‘

Born in China 46 years ago and brought up in Macau, Ms Leong came to New Zealand in 1989. She worked as a waitress, then in a factory, but quickly opened her own takeaway bar in Forrest Hill on Auckland’s North Shore.

Later she and her husband and a partner started a gardening and home service business, and from there Ms Leong moved into real estate with Century 21 in 2002.

When it all collapsed, she was bereft. “I had no food, no income, no anything. My husband left me with all the business debts and didn’t help me with the children at all,” she says.

Sounds an awful situation. To go from being a business owner with significant assets to bankrupt would be a terrible blow.

She got the domestic purposes benefit. She never stopped looking for a job but had no luck.

But then …

Her break came when Work and Income referred her in February last year to In-Work NZ, the country’s biggest private contractor of welfare-to-work programmes. Within two months she landed a checkout job at Devonport’s New World supermarket. It was only 16 hours a week at first, but in July her hours increased to 22 and the in-work tax credit of an extra $60 a week, paid to single adults working at least 20 hours a week or couples working 30 hours between them, allowed her to move off the benefit.

Still a long way from where she was, but what a great work ethic to not turn your nose up at working in a supermarket.


17,000 fewer on benefits

January 18th, 2014 at 7:00 am by David Farrar

Paula Bennett announced:

Figures for the December 2013 quarter released today show over 17,000 fewer people are on benefit compared to December 2012. …

“The decrease includes over 8,000 sole parents who have gone off the benefit, a 9.4 per cent drop compared to the same time last year,” Mrs Bennett says. …

Over 19,800 people cancelled their benefit to go into work in the last quarter.

Here’s the benefit levels compared to three years ago.

  • Jobseeker – Work Ready – 20.3% lower
  • Sole Parent Support (SPS) – 13.0% lower
  • Supported Living Payment (SLP) – 0.7% higher
  • Emergency Benefit (EB) – 14.6% lower
  • Emergency Maintenance Allowance (EMA) – 13.2% lower
  • Youth Payment/Young Parent Payment (YP/YPP) – 15.4% lower
  • All Working Age Benefits – 8.7% lower

Good to see most heading in the right direction.


Welfare costs reducing

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

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.


“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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10 years on the widows benefit

December 26th, 2013 at 10:28 am by David Farrar

Stuff reports:

Hamilton mother-of-six Kaye Nonoa received an unexpected letter on Christmas Eve – a court summons from her son’s former high school for unpaid fees.

This comes after he was banned from attending his school ball earlier in the year for having outstanding fees, despite being head boy.

Mrs Nonoa is upset that Melville High School is using such a forceful method to recover money she doesn’t have.

The letter, handed to her by a plain-clothes woman at 7.30am on Tuesday, said the school was taking legal action to retrieve $1166.84 in sports and subject fees from 2011 to 2013 and $1133.50 in legal costs – $2300.34 total.

Her son, Johnboi, 18, finished school this year.

He was head boy, captain of the First XV rugby team, a member of the top basketball team and also took part in cultural activities.

The fees Melville High are seeking are for sports and specialist subjects like photography and food technology, not the voluntary school donation.

Mrs Nonoa has been on a widow’s benefit for the past 10 years and said she paid off small amounts when she could afford it.

This to me seems to be the crux of the issue. Of course it is difficult to afford all these additional costs on a widow’s benefit. But we live in 2013, not 1953. Why do we deem it acceptable to remain on a widow’s benefit for 10 years? I’m all for supporting someone whose partner suddenly dies – but maybe for a year, not a decade, and/or until all the kids are at school (as must be the case if you have been on the benefit for 10 years).

Labour abolished any  work-test requirements for the Widow’s Benefit in 2003. If they hadn’t done so, it is likely Mrs Nonoa would have found part-time work, and be in a better position to afford the additional school fees.

As it happens last year the work-test requirements were re-instituted, and the Widow’s Benefit merged into the new Sole Parent Support benefit.

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UK Labour may scrap benefits for under 25s

November 22nd, 2013 at 11:00 am by David Farrar

The Telegraph reports:

People under the age of 25 would be barred from claiming unemployment benefits under proposals being considered by the Labour Party.

The Institute for Public Policy Research will publish a paper later this week proposing a new means-tested “youth allowance” for 18 to 24-year olds who are not in work or education.

Only those who prove they are in “purposeful” training or carrying out an “intensive” job search would be eligible for the allowance, the group will say.

The allowance would be dependent on family income, with the children of parents earning more than £25,000 a year unable to claim it, the IPPR will suggest.

The youth allowance would be set at £56.80, the same level as Job Seekers’ Allowance.

Under-25s would be banned from claiming additional benefits including Employment Support Allowance and Income Support. Paying those two benefits to under-25s costs taxpayers almost £1.3 billion a year.

It is understood that Rachel Reeves, the Labour shadow work and pensions secretary, is considering adopting the policy, though is undecided about applying a means test.

Ed Miliband, the Labour leader, has also hinted at taking young people out of the benefits system.

Good on UK Labour. But can you imagine NZ Labour ever adopting such a policy? They have opposed almost every single aspect of the reforms designed to prevent long-term benefit dependency.

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99% respond to work testing sanctions

October 23rd, 2013 at 12:00 pm by David Farrar

The Herald reports:

Almost 13,000 parents with dependent children have had their benefits cut for failing work tests in the first 2 years after sole parents first had to look for work.

Data released to the Child Poverty Action Group under the Official Information Act shows 1310 parents had benefits cut for failing work tests in the first three months after sole parents with children aged 6 and over were required to look for part-time work from September 2010. A further 5,074 parents’ benefits were suspended or cancelled for failing work tests in 2011 and 6,418 last year.

Most parents then met their obligations quickly enough to have their benefits restored, but 157 had benefits formally suspended or cancelled in the first three months of the new regime.

So 13,000 initially were sanctioned for not being available for work etc, but only 157 of them didn’t end up being work ready and seeking work. I call that a huge success.


Sanctions working

September 25th, 2013 at 9:00 am by David Farrar

Michael Fox at Stuff reports:

Threats to sanction beneficiaries on the run from the law are leading to the clearance of more outstanding arrest warrants, the Government says.

One change revealed in the Government’s welfare reforms this year was the ability to stop payments to beneficiaries if they were subject to an arrest warrant.

Social Development Minister Paula Bennett said it had resulted in 161 arrest warrants being cleared within six weeks of operation. …

Bennett said the police were notifying Work and Income after their own efforts to track down those beneficiaries had failed.

Work and Income staff were then contacting the beneficiaries to tell them they needed to contact police or have their benefits slashed.

 The new rule affects those who have had an outstanding criminal arrest warrant for 28 days or longer.

Those people get another 10 days to clear the warrant. If they don’t their benefit is stopped if they have no children or halved if they do.

Not bad for just the first six weeks.


Getting people into work is “sinister”

July 28th, 2013 at 12:00 pm by David Farrar

Stuff reports:

Thousands of beneficiaries will be managed into work by private employment agencies in a new nationwide pilot programme some are labelling “sinister”.

The Ministry of Social Development has been seeking tenders from community and private employment agencies to put beneficiaries into paid work.

Annually, 2000 beneficiaries will be involved nationwide and the agencies will earn up to $12,000 for placing a client into a job.

They will earn more for placing higher classified patients, such as those with “entrenched mental health issues” and those with serious barriers preventing them returning to work.

Overseas, similar welfare-to-work programmes have been criticised as ineffective and costly. Some groups are worried the same thing could happen here, and that there’ll be too much focus on “bonus payments”.

But Social Development Minister Paula Bennett said the Government was willing to pay more to help those who are likely to find it harder to get into work and be independent.

This is what Labour and allies are calling sinister?


Welfare reforms

July 15th, 2013 at 11:00 am by David Farrar

Stuff reports:

Wide-ranging benefit reforms have come into force today, with beneficiary advocates voicing a mix of cautious optimism and criticism of the changes.

From today there are fewer benefit categories, as well as compulsory drug testing for jobseekers, sanctions for fugitive beneficiaries and stricter healthcare obligations for parents of young children.

A new way of dealing with hardcore beneficiaries will also be introduced, with the Government trumpeting the success of a pilot trialled in 24 Work and Income offices since October.

Work and Income says the results are “some of the best from any case management trial” in recent years, with 6000 of the 10,000 people in the pilot no longer on a benefit. More than half of those people found work, the rest opted out or cancelled benefits for reasons such as no longer meeting eligibility requirements.

Imagine if we can replicate that, on a larger scale.

The ministry also has a pilot planned in the next two months to get 2000 sickness beneficiaries with mental and physical disabilities into work, she said.

Few disabilities prevent someone from all work. They may prevent certain types of work, or full-time work.


UK options for welfare reform for large families

May 14th, 2013 at 10:00 am by David Farrar

Charlie Cooper in The Independent writes:

Whether or not one accepts a link between thePhilpott case and the argument for welfare reform, the tragedy has focused attention on one of the most difficult questions in modern politics: how the state should discourage people on benefits from having large numbers of children and expect the welfare system to pick up the bill.

And the options:

Docking benefits when children miss school:

One proposed policy, already in place in some US states, is for the parents of children who miss school to be docked benefits. In Michigan, parents whose children play truant for ten days see their social security cut.

In the UK, a senior government advisor suggested that the UK employ a similar strategy, extracting truancy fines from family’s state benefit.

Pros: encourages parents to be responsible for children’s education, without automatically removed their child benefit.

Cons: does not address issues of welfare dependency.

NZ has gone down this path.

Capping benefits:

A policy that is about to come into force in four London boroughs and will soon be rolled out nationwide, is that total benefits payments will be capped at £500 a week, or £26,000 per year for families of all sizes. The aim of the policy is to “make work pay” by bringing maximum benefit payments below the average full time salary.

However, the impact is expected to be predominately felt by large families, who make up the largest number of people currently receiving benefits above the cap. 73 per cent of households affected have three or more children.

The Institute for Fiscal Studies said in its Green Budget 2013 that the policy may have an impact on fertility rates “since the cap will effectively reduce the state financial support for some large families”.

Pros: tackles the problem of families having children for the sake of the benefit they bring while also encouraging people into work.

Cons: will cut the income of families by an average £93 per week – plunging many into poverty.

I wouldn’t do this for current families, but you could announce this as a policy so people in future know that if they choose to keep having more children on welfare, they won’t keep getting more money.

Cutting the number of children eligible for benefits:

An idea that would once have been considered extreme now has the backing of senior Conservatives and is being considered by Iain Duncan Smith, the Work and Pensions Secretary. David Davis, a former Tory leadership challenger, has said in the wake of the Philpott case, that there is “a strong argument to restrict child benefit whether it is to two, three or four children”, although he added that policy should not be made “on the back of one story”.

His words echo Mr Duncan Smith last year, when he suggested that he would consider capping benefit payments for new claimants after the birth of the first two children – a scheme that was dubbed the “two-child policy” and earned comparisons to China’s population control methods. Charities said any such move would have “a devastating impact on children”.

Pros: directly targets the problem of families having children for the sake of the benefit award they bring.

Cons: will unfairly penalise the children of families that exceed the cap.

The Clinton reforms cut off funding for any additional children if the parent/s were already on welfare.


Welfare reform legislation passed into law

April 10th, 2013 at 1:00 pm by David Farrar

Paul Bennett has announced:

Three new benefit types will replace the seven current benefit categories, in addition to the new Youth Payment and Young Parent Payment introduced in August last year.

The new categories this Bill creates are:

  • Jobseeker Support for those actively seeking and available for work

  • Sole Parent Support for sole parents with children under 14 years

  • Supported Living Payment for people significantly restricted by sickness, injury or disability.

This is a fairly major reform, which changes the focus far more onto having welfare as temporary assistance, except for those incapable of any significant work at all.

“The legislation also introduces new social obligations to ensure children in benefit-dependent homes get quality Early Childhood Education, are enrolled with a doctor, get their Well Child checks and are in school if they are school-age,” Mrs Bennett said.

The law will also require Jobseekers to be drug-free, and will allow benefits to be stopped for outstanding arrest warrants.

I can’t believe it has taken this long to say you can’t claim a benefit if on the run from the Police!

The investment approach will target interventions and support to those most at risk of long-term welfare dependence.

“By investing in people sooner, we can actually start to break that cycle of dependence.”

It may cost a bit more in the short-term, but is a good long-term investment.


US Disability Benefits

April 8th, 2013 at 10:00 am by David Farrar

In case you needed convincing about the need for welfare reform, this story from the United States should help convince you.

It was an exclusive story for Planet Money on National Public Radio. It has had great resonance in the US, as it has exposed how great the growth in numbers on disability welfare has been.

Some key findings:

  • 14 million people a month now get a disability check from the Government.
  • In one county in Alabama, 25% of working adults are on a disability benefit.
  • That the proportion of those claiming a disability benefit with a difficult to test problem (back pain, mental illness) has increased from 18% in 1961 to 53% in 2011.
  • That some states have as many as 9% of their adults on a disability benefit.
  • Fewer than 1 percent of those who were on the federal program for disabled workers at the beginning of 2011 have returned to the workforce since then.
  • The disability benefit pays $13,000, just $2,000 less than the minimum wage, plus Medicare so some are better off financially not working.
  • The number of children on a disability benefit has increased seven fold since 1974 to over 1.2 million.
  • If these children with learning or other disabilities get a job, their parents lose the $700 a month disability check.
  • Disability welfare now costs $260 billion a year, and will run out of reserve duns by 2016.

People should remember this story, when Labour and Greens constantly say there is no need for welfare reform in New Zealand. Note that the numbers receiving the Invalids Benefit in NZ has increased eight fold since 1976 from 10,000 to 84,000. Now by no means should anyone conclude this means everyone on that benefit shouldn’t be there. To the contrary I know some people on that benefit who would love to be able to work, or work longer hours than they can. So we need to be careful not to stigmatize those who are in genuine need.

However as the US story shows, the growth in the level of such benefits has been massive, and I encourage people to read the full story about what happens when the incentives to be on welfare are greater than to be in work.

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Dom Post on work tests

April 1st, 2013 at 12:00 pm by David Farrar

The Dom Post reports:

An important social contract underpins New Zealand’s welfare system. At its heart is the principle that society will provide for individuals who are unable to support themselves on the understanding that those who are able to work will make an honest effort to look for employment.

Yep, and support for the former is undermined when the latter does not occur.

Sadly, however, some beneficiaries see it as their God-given right to remain on welfare for life and not only make no effort to improve their lot, but add to the burden on taxpayers.

They include women on the domestic purposes benefit who seem to believe they can have as many children as they want while remaining dependent on the state, and that workers will be happy to pay for them to have that privilege.

It is a minority, but it is not an insignificant minority. We should be full of compassion for parents who suddenly find themselves without a partner because they die, flee, turn abusive. But that is a different situation to having multiple babies to multiple partners over many years, and hence never being in employment.

The number of women who have had additional children while on the DPB is undeniably cause for concern. Between 1993 and 2011, almost a third of women who drew the benefit had at least one more child. In 2010 alone, 4800 children were born to solo mothers already on the DPB – 7.5 per cent of the total live births that year.

A third is far too high. Mistakes will and can occur, but at a third that suggests many of them are deliberate decisions to have further children despite being unable to even provide for existing children.

That is not fair on working parents who would dearly love more children, but who have put off increasing the size of their families because of economic pressures.


It is also not fair to the children of those beneficiaries.

It has long been established that children in working families have far better health, education and social outcomes. That is true for children with one parent as well as those with two.

Not only do children in sole-parent families benefit from their mother or father having a higher income than they would get from welfare payments, they also benefit enormously from seeing their parents go out to work every day.

This is the part that I think is most important. A child who grows up in a household where no adult ever works in paid employment is going to probably start life very disadvantaged.

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Why we need education reform also

March 23rd, 2013 at 9:27 am by David Farrar

Narelle Henson at Stuff reports:

Frustrated bosses say they can’t find suitable workers for even the most basic of labouring jobs despite the high unemployment rate, as they deal with people who turn up drunk if they come to work at all. …

But despite the many jobless, employers say continual absenteeism, substance abuse and poor work ethic appear to be making a lot of them unemployable.

Dave Connell, vice-president of the New Zealand Contractors Federation and managing director of Connell Construction, who is juggling operations in the Waikato and for the Christchurch rebuild, said 100 people responded to a Trade Me job advertisement for a junior construction role, but not one was suitable to hire.

“We are letting seven people go for every one we keep,” he said.

“I have had some people last half a day and walk off the job with $800 worth of [work] gear on them; one guy had six sick days in two weeks, and we have had issues with physicality too.”

Mr Connell said he was desperate to fill positions, but could not find anyone with the right attitude.

It will take many years to fix these problems.

The first is we need to stop people leaving school with inadequate literacy and numeracy skills.

The second is we need to install a work ethic in people from their teenage years. That is why I don’t support a minimum wage for under 18s, and why I support welfare reform.

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Bennett on welfare reforms

March 21st, 2013 at 12:00 pm by David Farrar

Kate Chapman at Stuff reports:

As the second round of welfare reforms come back before Parliament Social Development Minister Paula Bennett says the 650 children born to women already claiming a benefit in January are reason enough for her tough reforms. …

There were 659 subsequent children born to parents already claiming a benefit this January, she said.Under changes introduced last October, they will have to return to work when that child is 12-months-old, if their older children are aged over 5.

Bennett said Work and Income staff used discretion to excuse 22 of those parents from the work requirement, largely because of timing around the announcement and implementation of the policy.

Meanwhile, in 2010 more than 7.5 per cent of live births – 4800 of 63,900 – were babies born to sole parents on the Domestic Purposes Benefit (DPB) and Emergency Maintenance Allowance.

And between 1993 and 2011, 29 per cent of sole mums on the DPB had another child.

”It does tell us that those that are already on benefits with children are still having subsequent children,” Bennett said.

I think there is a fundamental difference between having a child, and then ending up on welfare (because your partner leaves you, turns violent, dies etc) and already being on welfare and choosing to have further children.

Bennett admits work testing for sole parents was among the ”tougher” reforms.

But in 10 months of last year there were less people going onto the DPB that coming off. A feat which has only been achieved twice in the last 16 years, once when Working for Families was introduced.

A good start.

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Why not inform people of whom is right?

March 4th, 2013 at 12:00 pm by David Farrar

Stuff reports:

It’s another case of she said, she said. Labour MP Jacinda Ardern was yesterday bemoaning record benefit numbers during National’s reign.

DPB, sickness and invalid beneficiary numbers were at the highest since records began in 1940, she said.

It didn’t take long for Social Development Minister Paula Bennett to respond with her own gloating statement.

The number of people on the DPB, unemployment and invalids benefits all decreased last year, she said. It seems statistics are everyone’s friend.

Rather than just report that both MPs are claiming different things, it would be nice if the media actually provided the full data and allowed people to decide for themselves.

I blogged yesterday that the numbers cited by the HoS and Ardern were over a year out of date. That’s not opinion – it is fact.

The excellent Stats Chat site also gives people the full data, in graph form. Sadly the number of people who read that site is far far less than those who read newspapers.

Lindsay Mitchell also has some useful fisking of Ardern’s claims.

Ironically Anthony Robins at The Standard is also unhappy with the article. Not for the misleading claims, but because a Labour MP is suggesting that it would be a good thing to have fewer people on welfare!

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Welfare numbers

March 3rd, 2013 at 10:00 am by David Farrar

The HoS reports:

Paula Bennett’s reputation for being tough on beneficiaries is in jeopardy as figures reveal record high numbers on state financial support.

Labour spokeswoman for social development Jacinda Ardern said the highest unemployment numbers were at around 10 per cent in the early 1990s but support for solo parents and invalids have hit record highs during Bennett’s reign as Social Development Minister.

“When it comes to the worst DPB, sickness, and invalid benefit numbers, these have all been since 2010 and under Paula Bennett,” Ardern said. “Interestingly, the two highest figures for the DPB were both after the introduction of Bennett’s welfare reforms, which mostly targeted DPB recipients by increasing their work obligations.”

Ardern provided the Herald on Sunday with figures which showed:

Between January 2009 and January 2012, the number of people on the DPB rose by 13.2 per cent. During the same period, the number of people on the unemployment benefit rose by 82 per cent. “The Government seems to be clamping down on DPB mums in an effort to show ‘action’ to mask their ‘inaction’ in employment and job creation,” Ardern said. “But neither figure will budge unless the core issue of job availability is first addressed.”

The moment I saw this story, I had a fair idea of what the actual data would show. Yes more people on those benefits between those two dates, but not a linear pattern. Of course Jan 2009 was as the GFC was in full force, and hence job losses occurring.  Also the comparison stops 12 months ago. Why?

Let’s look at the actual data, in terms of increase or decrease each year. For DPB they are

  • 2008 +2,128
  • 2009 +9,007
  • 2010 +3,576
  • 2011 +1,365
  • 2012 -5,112

I think we now understand why Jacinda left the 2012 figures off. What I don’t know is why the Herald on Sunday did.

Let’s do the same with Invalid’s Benefit numbers.

  • 2008 +3,419
  • 2009 +1,537
  • 2010 +67
  • 2011 -1,062
  • 2012 -472

And for those interested in the Unemployment Benefit.

  • 2008 +7,760
  • 2009 +35,820
  • 2010 +756
  • 2011 -7,120
  • 2012 -6,217

They all show the same thing. The increase in benefit numbers started in 2008 (under Labour) and worsened in 2009 as the Global Financial Crisis struck.  Despite patchy economic growth since 2009, benefit numbers in all three categories have fallen in the last two years.

One has to congratulate Jacinda for getting the Herald on Sunday to run an entire story based on selective cherry-picked data. That’s a good achievement for an Opposition MP.

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A promising start

January 18th, 2013 at 11:00 am by David Farrar

Claire Trevett at NZ Herald reports:

The number of sole parents on the domestic purposes benefit dropped by 5000 last year – a drop Social Development Minister Paula Bennett is attributing partly to her new policy requiring sole parents to get jobs when their youngest child turns five.

Figures released yesterday showed there were 95,138 sole parents on the DPB at the end of 2012 – down from 100,266 the year before.

More than half of that drop happened in the last three months of the year, after the introduction of Ms Bennett’s policy required sole parents to get part-time work when their youngest child turned five and fulltime work for those whose children were older than 14.

Ms Bennett said 3221 sole parents had returned to work since that came into force in October.

It’s early days, but that looks to be a promising start. The real beneficiaries of the policy are the kids, as growing up in a household with no adult in employment has strong correlations with negative outcomes in multiple areas.


More data needed

January 11th, 2013 at 7:22 am by David Farrar

Hamish Rutherford at Stuff reports:

Disability services group CCS says it has “grave concerns” about plans to introduce work ability assessments, influenced by controversial tests conducted in Britain.

From July, the invalid’s benefit, paid to about 85,000 New Zealanders, will be replaced by the supported living payment, as part of wide-ranging welfare changes.

Social Development Minister Paula Bennett has said this would mean little change, although in a speech to health professionals late last year she signalled a new assessment regime which “echoes” the British process.

Measuring the extent to which disabled can work, the British tests have prompted a debate in the British Parliament, as well as protests targeting the Paralympics where Atos, the private company doing the tests, was a sponsor.

CCS Disability Action chief executive David Matthews cited research showing the British Government had spent £42.2 million (NZ$80.5m) on appeals against the tests, about 40 per cent of which overturned Atos’ findings.

CCS may have a point, but the data they cite doesn’t make it.

The cost of appeals by itself means little. The UK has a population around 40 times larger than us.

The 40% being over-turned on appeal means little also, unless we know how many appealed. If only 1% of those classified appeal, then a 40% success rate would be lower than what I’d expect. If 75% of those classified are appealing, then a 40% success rate would suggest a wider problem.


Well done Flat Bush Police

December 27th, 2012 at 1:00 pm by David Farrar

Jay Boreham at Stuff reports:

Police have helped a South Auckland family of 13 avoid eviction by transforming their Housing New Zealand home, bringing it up to proper living standards.

The Flat Bush Neighbourhood Policing Team gained the support of the local community and businesses to upgrade the home, which was in such a poor state of repair the family was on its last chance with HNZ.

A great initiative by the local Police.

Constable Karen Ancell said 11 children lived at the house with their 32-year-old mother who was pregnant.

I’m sorry? 11 kids? No mention of father or fathers. And pregnant again? This is why the Government changed the law this year, to reform our welfare system.

“We have stepped in to get the house up to scratch so the family can make a fresh start,” Ancell said.

“They are struggling, to say the least, and some of the children are starting to come to police attention.”

More than 40 volunteers helped with the make over while businesses donated materials and services.

What a wonderful community. Hopefully their generosity will serve as a lesson.

The volunteers fumigated the house, repaired damaged walls and painted the interior. Outside they tidied the grounds, erected raised garden beds and planted vegetables.

Police, Salvation Army and Habitat for Humanity representatives also donated furnishings to completely refurnish the house.

The community’s input for a family they had never met was huge, Ancell added.
“It’s about giving a family a fresh start. They are in a good place to change now, whereas in the past that hasn’t been the case.”

But giving them a home they can be proud of is just the first step. The police are also working to give the family the tools to become good members of society.

They will receive mentoring, budgeting advice, counselling and health checks as well as anger management and parenting training.

“They are in a bit of debt and it is very difficult to make headway out – it’s a vicious circle.”

It is an opportunity for a fresh start. But part of that is self-responsibility. If you are struggling to cope with 11 kids, why would you have a 12th? Contraception is generally free, as are long-term procedures.


“Beneficiary Bashing”

October 3rd, 2012 at 9:00 am by David Farrar

Stuff report:

Leah and Sarah Gilbert are on the domestic purposes benefit and want to stand against what they see as unfairness surrounding benefits and “beneficiary bashing”.

The Hamilton sisters have got behind Friday’s National Day of Action against welfare reforms and, have organised an event for people to have their say.

“Beneficiaries are being stereotyped as bludgers, parasites, lazy, selfish, that we all neglect our kids and would rather spend money on drugs and alcohol. I don’t fit into that. My kids are healthy and happy and go to school every day with full lunch boxes. That’s not me, and that’s not okay,’’ Sarah said.

And that’s great. And I don’t know anyone who thinks everyone on a benefit is a parasite, a bludger, lazy or selfish. I certainly don’t. I think there are some people on benefits who are using it as a lifestyle choice – but they are certainly not the majority.

But it is not acceptable to ignore the problems caused by the minority, just because some people think it is a slight on them.

Take for example rape and domestic violence. We have far far too much domestic violence in NZ, and it sickens me the number of men who bash women.

But when we talk about domestic violence in NZ, I as a man don’t feel I am being labelled a criminal, a thug, a violent person. I am confident enough to know it is a reference to the minority who are the problem.

Frankly labeling welfare reform as beneficiary bashing is just an attempt to avoid the actual issues.

I note in the comments to the article, that the Gilberts have an interesting political agenda. Extracts:

Welfare money all ends up in the hands of private businesses – I am merely a conduit for it to end up in the hands of my landlord, the supermarket, the child’s school, etc.

Goodness. First I didn’t know her school was a private business. But secondly, so what? We all spend all our money eventually. That doesn’t mean it grows on trees.

Employers are the ultimate gatekeepers of employment – I look for work, but my health and the job climate puts me at the bottom of the lists with my history DESPITE MY EFFORTS.

And if you are studying to gain qualifications and/or applying for jobs – then that’s great. From everything in the article, they’re doing what you should do on welfare – managing costs, studying, applying for jobs. That’s all the Govt is requiring – there is no requirement to get a job or lose your benefit – just to be available for work. I don’t regard that as beneficiary bashing.

If full-time salaries were split into part-time jobs, the government would recieve more tax revenue and opportunities for employment would be increased.

No they wouldn’t. I hope the degree is not in accounting or economics. Two people earning $20,000 pay much less tax than one person earning $40,000.

People are envious because the minimum wage does not provide a livable wage.

You’re having trouble getting a job, and you want to make it even harder to get one by putting up the minimum wage?


I never said I don’t like the amount I get, in fact I redistribute excess to a children’s charity and invest in a scholarship fund to improve my son’s opportunities.

And that’s great. Good to have an example of a beneficiary making ends meet, and a bit leftover. But why does the article also say you have sometimes gone hungry to feed your kids?


Welfare savings

September 18th, 2012 at 10:00 am by David Farrar

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.


Dom Post on welfare reform

September 13th, 2012 at 12:00 pm by David Farrar

The Dom Post editorial:

Observing the wailing and teeth-gnashing that has accompanied the latest welfare reforms, a visitor could be forgiven for assuming the Government is hellbent on introducing Dickensian-era workhouses to New Zealand.

In fact, nothing could be further from the truth. The new sanctions unveiled by Social Development Minister Paula Bennett are not an attempt to deny assistance to the children of beneficiaries, but to ensure they get it.

Exactly. Making sure they get taxpayer funded user-free ECE, making sure they attend school, making sure they do their free Wellchild checks is hardly bad for the kids.

Every child deserves a decent upbringing and the opportunity to develop to his or her full potential. Simply handing money to bad parents is no guarantee that their children will be fed, clothed or loved.

The wider Kahui clan was reportedly receiving more than $2000 a week in benefits when 3-month-old twins Chris and Cru suffered the injuries that caused their deaths. There is no reason to believe that more money would have made a difference. Similarly, four adult beneficiaries were living in the Rotorua home in which 3-year-old Nia Glassie was mortally injured. Would larger state payouts have prevented her from being stuffed in a tumble dryer, beaten and hung from a clothesline?

The left are convinced that more money is the solution to everything. It isn’t. Labour and Greens are about to vote for a bill to extend the $60 a week in-work tax credit from working parents to parents on benefits, in the belief this will cure child poverty.

Child poverty is defined as being in a household that earns less than 60% or 50% of the median income. So if the median income drops, this will actually be celebrated as bringing kids out of poverty!!!

The problem in both cases was not the level of state support, but values. A small section of society has so lost touch with the notion of right and wrong that it does not even recognise the obligation to take care of its own.

The minister’s reforms are an attempt to fix the problem by using benefit payments to remind those tempted to neglect or abuse their offspring that with rights come obligations. By any standard, the new “social obligations”, which will take effect next July, are measured, moderate and compassionate. Beneficiaries will not be penalised for failing to use services that do not exist in their areas and, before any sanctions are imposed, they will be given three opportunities to comply with the new regime. Furthermore, the minister is promising the speedy restoration of entitlements once failing parents do the right thing.

The best policies tend to use both carrot and stick. The carrot should be that these services are free, and they are good for the child and family. The sick is sadly necessary for some families.

Instead of condemning the new measures, Labour, the Greens, Plunket and beneficiary advocate groups should be applauding Mrs Bennett for having the courage to tackle a problem that decades of well-intentioned but ineffective policy-making have failed to remedy.

What I would find interesting is a clear statement from Labour on whether they will repeal the requirement?

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$78 billion

September 13th, 2012 at 10:00 am by David Farrar

Kate Chapman at Stuff reports:

The lifetime cost of current beneficiaries is more than $78 billion, a new report has found.

An actuarial valuation conducted as part of the Government’s welfare reforms shows the average total cost of all who had received a working-age benefit in the year to June 30, 2011 was $78.1b.

Of that, $17.8b came from those who started out on the DPB, $19.1b from those on an invalid’s benefit and $7.2b to those who were on a sickness benefit.

Just five per cent of the total cost, or $4b, was from those who started out on an unemployment benefit.

They’re some large figures, and do demonstrate why it it important to reduce the numbers of people long-term on welfare. Those on the dole tend to be for a short period of time. It is the other three major benefits which have the bigger impact.

But the fiscal cost is not the main reason we should try and reduce the number of people on long-term welfare. It is for the benefit of those actually on welfare. There are a small number of people who are genuinely incapable of ever being able to do any paid work – and they should get gold plated support.

But most people are capable of some work, even a few hours a week. Yes they’ll still need income support, but being in work benefits people not just financially, but physically, emotionally and mentally.