Impact Bond: Improving Mental Health and Employment Social Bond (Auckland)
Stage of development: Complete
Policy sector: Employment and training
Intervention: This 'social bond' is designed to improve the employment outcomes for those with mental health conditions, delivering reduced welfare dependence and improved mental health outcomes. Once people have been selected for the programme, APM undertake an employment matching role, customised for each client. Once the client has gained employment the service continues with a mentoring and wraparound support programme to help with the transition from a benefit to paid work.
Start of service provision: 2017-02
Actual end of service provision: 2018
Total investment commitment currency: USD
Total investment commitment: 1500000
Total investment commitment (USD): 1500000
Target population: The programme seeks to help jobseekers, receiving a Main Benefit and who have a diagnosed mental health condition in the Auckland suburbs of Manukau, Manuwera, Clendon, Papakura, Pukekohe and Waiuku.
Targeted number of service users or beneficiaries: 1700
Targeted unit type: Individual
Notes: Services are provided by an experienced, for-profit service provider. According to NZ Treasury  the bond’s base case or expected performance occurs when 43% of the referred clients are placed in employment. This compares with a counterfactual where 10% find employment without any interventions, and a 30% target for the main comparable MSD intervention, Work-to-Wellness contracts.To improve potential interest in the bonds, the $1.5m of private investment is split into two classes. On base case assumptions, less risky Class A capital is expected to return 7%, and more risky Class B 13%. The contract caps maximum potential yields at 9% and 17% respectively (with any surplus returned to the Crown). Downside risks are also considerable, with early termination only possible after yields have dropped to around 3% on Class A and -19% on Class B