"Parents rather than the state will be responsible for unemployed 18- and 19-year-olds who cannot support themselves under planned benefit changes announced in today’s Budget... That’s why from July 2027, eligibility for Jobseeker Support and the Emergency Benefit will be tightened for single unemployed 18- and 19-year-olds by introducing a parental assistance test."
At March 2025 there were 46,383 18-24 year-olds on a Jobseeker benefit.
So on matchbox calculations (necessary because the government hasn't provided numbers) 13,000 might be aged 18-19, costing around $240 million annually.
According to MSD, projected savings from the budget announcement are "$163.7 million over 4 years." Or just over $40 million annually or 17% of the total.
Safe to say, only one in six Jobseeker beneficiaries will meet the parental means test.
That's because ...
Most 18-19 year-olds who go on the dole came out of benefit-dependent households. Their parent(s) won't be able to support them.
Here is some inter-generational evidence from New Zealand's benefit system:
Taylor Fry Evaluation
So on matchbox calculations (necessary because the government hasn't provided numbers) 13,000 might be aged 18-19, costing around $240 million annually.
According to MSD, projected savings from the budget announcement are "$163.7 million over 4 years." Or just over $40 million annually or 17% of the total.
Safe to say, only one in six Jobseeker beneficiaries will meet the parental means test.
That's because ...
Most 18-19 year-olds who go on the dole came out of benefit-dependent households. Their parent(s) won't be able to support them.
Here is some inter-generational evidence from New Zealand's benefit system:
Taylor Fry Evaluation
For Youth benefit clients as at 30 June 2014:
§ 88% (9 in 10) were from beneficiary families, the majority of whom received a main benefit for most of their teen years.
§ 51% were in beneficiary families for 80% or more of their teen years.
The correlation is striking enough to believe that early entry may be a proxy for intergenerational benefit receipt (with the notable exception of teen-aged SLP [Supported Living Payment/Invalid] entrants).
Additionally, on NewstalkZB this afternoon Heather du Plessis-Allan suggested that loopholes will be found. For instance, singles will shack up because the new rule doesn't apply to those in de facto relationships. I would add that an unemployed single female aged 18-19 might also decide to become a parent in order to qualify for welfare. Well-intentioned policies are frequently beaten by the introduction of bad incentives and their outcomes.
Back to the budget imperative. On the whole, in terms of savings, it's very small beer.
When is the government going to look at time-limiting welfare assistance? Average expected future time on a main benefit right now for under 25 year-olds is 21.3 years
The savings from making welfare strictly temporary for those actually able to look after themselves would be massive. What is the government scared of?
Lindsay Mitchell is a welfare commentator who blogs HERE - where this article was sourced.
6 comments:
A compelling question is why do Ministers of Finance doing a yearly budget include figures calculated over 4 years when they may not be reelected.Just include the figure for one year .NUTS or confusing
These new measures go halfway to addressing the underlying problem. The 'Earn or Learn' approach goes all the way. Much more effective!
Inter -generational welfare dependence is what needs addressing and that for me is all about improving our failing education system . Constantly being asserted is that poor achievement academically is caused by the home environment . For me this is not so since we have an education system that uses that as an excuse for ineffective teaching methods. We have an ed. ideology that discourages instilling a work ethic into students, low expectations for low SES students, permissive discipline and so many more aspects that are specifically destructive to low income students. When are educationalists like Katherine Burbarsinghe ,and Marva Collins going to feature. in MSM? These people have students from impoverished , backgrounds excelling better academically than those at prestigious private schools . Mississippi as a state bucks the trend in literacy scores after teaching children in a structured way in reading and maths. Black students in Mississippi posted the third highest highest reading scores for for nine year-olds and 1.5 grade levels ahead of the average black students in other states.
The link between crime and reading scores for nine year olds is well established. A fully literate and numerate and well disciplined student has a bright future , one that isn't hasn't.
I don't think education is the only answer but I maintain it is a major one.
Thank you Lyndsay for pointing out the foolishness of government decisions based on superficial assessments. That unemployed youth come from welfare dependent homes is largely an educational failure we need to face up to. .
I like Gaynor's concern for education. Education is what makes the world go round. It underwrites health also a critical social issue. I acknowledge the issue with schools but I think home environment is an equal contributor. If the parents ( actual or de facto) have themselves come through the lazy system then they don't have the resources to question the system or to educate in the home.
So it is an institutional issue which is self fulfilling via the home environment.
I agree with Gaynor but with the caveat that they have to go to school. Yes our education system may not be the best; but students who do go to school, apply themselves do generally succeed. For those who say school is boring; how about being unskilled and on the dole. As for young fit and healthy New Zealanders you should only get a benefit if you are enrolled, attending, and passing the courses to become employable. I don’t know the answer to young girls who go and get pregnant. How can we disincentivise this behaviour?
Just get rid of the minimum wage. It is stupid to require teenagers to go into debt to gain doubtful marketable skills when they can acquire marketable skills earning whatever they are worth at any given time to an employer. I would sooner work for nothing to acquire actual skills I can sell than pay in time and money to end up with some scrap of paper that probably indicates few marketable skills. Our family , the five of us have total of 25 years of tertiary education in stem subjects, without accruing debt, but the acquisition of skills that people will pay for came in all instances from on the job training. The degrees , PhDs only served to indicate a capacity to be trained on the job. Financially it would have been better to have trained for any of the trades and used that platform to go into business, especially as the minimum wage serves to limit people entering trade employment resulting in a lack of numbers and high wages from demand exceeding supply. The education system is a rort supplied by young people trapped into it by the minimum wage blocking alternative options.
Post a Comment