Bennett Paula: Social Security (Youth Support and Work Focus) Amendment Bill — First Reading 
Bennett Paula: Social Security (Youth Support and Work Focus) Amendment Bill — First Reading 
[Advance Copy - Subject to minor change before inclusion in Bound Volume.] 
Hon PAULA BENNETT (Minister for Social Development) 
: 
 I move  
That the Social Security (Youth Support and Work Focus) Amendment Bill be now read a first time. 
 At the appropriate time I will be moving that the bill is referred to the Social Services Committee that the committee reports back to the House finally on or before 31 May 2012 and that the committee have the authority to meet at any time while the House is sitting except during oral questions and during an evening on a sitting day and on a Friday in a sitting week and to meet outside the Wellington region when the House is sitting despite Standing Orders 187 188 190 and 191(1)(b) and (c). 
The welfare system is failing many New Zealanders. It has created a cycle of dependency for many and 13 percent of working-age New Zealanders are on benefits directly affecting more than 220000 children. The system I say is failing them. It is out of step with today’s needs because times have changed. Today we have teenagers on welfare—teenagers—who are given a weekly sum of money and then just left to get on with it. Many of these teenagers are parents. It is an abdication of responsibility to simply leave them to fend for themselves and their babies. We have sole parents trapped in welfare with little support and quite frankly little hope. We have women consigned to a life of welfare because over 30 years ago society said women could not support themselves without a man. 
This Government is bringing the system out of the dark ages and into the light of modern-day New Zealand. We started the Future Focus changes in 2010 which proved the benefits of moving from a passive to an active approach. We are continuing with reforms because we owe it to New Zealanders. We will provide more support and we will expect more too. It is a fair balance and it is about time. Young people on benefits are our most vulnerable citizens because more than half of those who first go on to a benefit at 16 or 17 years old will spend at least 5 of the next 10 years on a benefit. The lifetime costs of paying these young people a benefit are higher than for any other group. The social cost of course can be devastating. More than a third of those on the DPB became parents as teenagers and almost half of all of those on the DPB have no formal school qualifications. The long-term consequences are obvious. 
But we can make a difference. The measures we are introducing will reduce the risk of long-term benefit dependency for teenagers. They are designed to balance support and obligations in a way that will improve outcomes for young people. I will be frank: we want to make welfare a less attractive proposition for many young people. We will not continue to dish out money to young people and teen parents and just hope that they will be OK. Instead with the youth payment for 16 and 17-year-olds and the young parent payment for 16 17 and 18-year-old teen parents we will help them manage their money into their being less dependent. A youth service provider will be attached to each young person and will help them to set up redirections so their rent and utilities are paid. After bills are paid the provider will help them budget an amount to go on their payment card to be used for food and living essentials with the remainder paid as a cash allowance. The payment card will work in supermarkets much like it does at the moment for those who get hardship assistance. The money goes on that so they can go into supermarkets. 
In return for this financial support young people will have clear obligations to be in education training or work-based learning. The idea is that we are moving them to being less dependent on the welfare system. For some young people they will need a lot of help first up and they will actually have more restrictions and have a youth provider working very closely with them. With others you can see them being further down the line needing less of that kind of control and able to move themselves quicker. 
There are three different incentive payments. They can earn an extra $10 a week for meeting certain obligations. A 16 or 17-year-old receiving the youth payment could earn up to $20 a week by completing a budgeting programme and remaining committed to education or training. I think it is a really positive thing that for once we are incentivising the kinds of behaviours we want instead of actually sanctioning young people like we so often do through the system. There will be incentives and obligations for teen parents too. We will no longer just assume that teenagers who are sole parents on welfare know how to look after their children without support around them. These are very young people bringing up babies and quite frankly both can be vulnerable a lot of the time. These young parents will have to enrol their children with a primary health care provider and complete Tamariki Ora Well Child checks. As an extra incentive someone on a young parent payment could earn an extra $10 a week by completing a parenting programme and of course as with the other youth payment they can also earn extra by doing budgeting and by staying in education for a sustained period of time. It makes sense to provide these incentives to reward positive behaviour particularly when it is just so beneficial—not just to that youth but also for those who are parents to their children as well. But failure to meet obligations means those incentives could be removed as well as their cash allowance. 
Education training and having these young people in learning are absolutely crucial. I think the key to this part of the reforms being successful is going to be the relationship with the service provider with the contracting model that we have in place for where we put the incentives so they are actually reaching milestones themselves so that we can see these young people actually moving ahead and not being in the same place that they are now in 5 or 10 years’ time which is what we see at the moment. We recognise that for teen parents to resume or continue their education or training childcare is vital. A guaranteed childcare assistance payment for children under 5 will remove what can be a barrier for many. A key component to the changes for young people will be the way that we really engage them. That guaranteed childcare assistance payment will be vital to seeing them move on. 
 Then that wraparound support is for more than just those young people who are on benefit. It is also available to those disengaged 16 and 17-year-olds who are leaving school early. We know there have been anywhere up to 13500 or 14000 young people falling out of school and not going into work or training. This Government cares enough to change the law so that Government departments can keep track of these young people and we can help them. We hear repeatedly from organisations out there that are working or want to work with these young people that they are too hard to find. Those few months from their dropping out of school and actually being picked up by a provider on the street can be absolutely vital so insisting that schools report in real time where those young people are will make a huge huge difference. 
Another point that has not been picked up as these reforms are being talked about is that they will extend this support to 16 and 17-year-olds and 18-year-olds with children who are the spouse or partner of an older beneficiary. We often forget them. These young people are also vulnerable at times and not seen as individuals but actually seen just as the partner and they can miss out on the sort of support that we think they need. 
Sole parents have been let down and we need to look at the changes that we make around them. Yes there will be changes to the age when they are part-time work tested. That work test is at 15 hours a week but will have some flexibility around it. The reason we are putting flexibility in is that someone who is working 12 or 13 hours a week at the moment would still be work tested. That does not make sense. Let us put a bit of flexibility around that for the numbers of hours that they work so that it works more for them and works better for them as individuals. 
There has been some talk around subsequent children and yes there are certainly changes there. We are looking at those who have a baby while on a benefit. The work test will go to those when the child with whom they went on to a benefit turns 5. In the work test they will be work exempt for a year and then after that the work test goes to the child whom they came on to a benefit with. So if they come on to a benefit with a 2-year-old they have another one in that year and the child that they came on to a benefit with is only 3 they will not be work tested until that child is 5 years old. But there are changes there as well. 
We are making changes to the widows benefit and women alone benefit. They are available only to women and not to men obviously. There is no work availability expectation and quite frankly it is a very outdated concept and one that needs to change so that will be changed in line with these reforms. I believe that is reasonable and exactly what is needed. 
The fiscal costs of welfare are a serious problem as is the waste of human potential associated with long-term benefit dependency. We can make a difference. These reforms are vital. I commend this bill to the House.