Bennett Paula: Social Security (Benefit Categories and Work Focus) Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Bennett Paula: Social Security (Benefit Categories and Work Focus) Amendment Bill — First Reading 
[Sitting date: 20 September 2012. Volume:684;Page:5514. Text is incorporated into the Bound Volume.] 
Hon PAULA BENNETT (Minister for Social Development) 
: 
 I move  
That the Social Security (Benefit Categories and Work Focus) Amendment Bill be now read a first time. 
 I nominate the Social Services Committee to consider the Social Security (Benefit Categories and Work Focus) Amendment Bill. The changes in this bill form part of a comprehensive package of welfare reforms staged over 2 years. These reforms will fundamentally shift the focus of the benefit system towards encouraging and supporting more people into paid work. The status quo is not an option any longer. 
I do not for one moment underestimate what I am asking people to do but I am backing them to be able to do it. Every time that the Opposition cries that this is beneficiary bashing I simply just see people who are ignorant of the effects of the welfare trap. It is not enough to feel sorry for people trapped on welfare and do nothing. The left’s answer is to transfer people between benefits and throw more money at them. I am far more ambitious for them than that. I will back cajole encourage— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! Would members leaving the Chamber please do so quietly. 
Hon PAULA BENNETT 
: I will back cajole encourage and incentivise people to get work-ready to take up the jobs as they become available and to get ahead in life. There is a compelling case for investing up front. We already spend around $8 billion a year on welfare but we are seeing intergenerational welfare dependence. By investing in people sooner we can actually start to break that cycle. 
Through this bill the investment approach will target resources to those who are likely to end up welfare dependent without some extra support. Actuaries have done a detailed valuation of the total future liability of the benefit system and have it at around $78 billion. That is based on the expected length of time individuals will stay on benefit given that we know that some will stay on for 10 weeks some for 10 months and some for 10 years. That gives us a clear basis for targeting more money more support more resource to the right people at the right time. Too many New Zealanders have been stuck in a system that provides little incentive to get out for too long. This bill will change that. 
This is the next step in a concerted programme of reforms. At the end of July this year the Social Security (Youth Support and Work Focus) Amendment Act 2012 passed into law. The new youth service kicked off in August and community providers are already working closely with our young people to connect them back into education training or work-based learning. From 15 October this year sole parents will be expected to look for part-time work when their youngest is 5 and full-time work when their youngest is 14 years old. Most New Zealanders I think see that as reasonable. Similar expectations will apply to those on the women alone benefit and the widows benefit. Those without dependent children will be expected to be available for full-time work. 
This new bill represents the largest structural change of the Social Security Act in decades. Central to reforms in this bill is the introduction of three new benefits: jobseeker support sole parent support and the supported living payment. These replace seven categories of main benefit. The emergency benefit is not being changed. This bill will modernise and simplify the benefit system. It removes outdated offensive terms like the invalids benefit and reinforces the fact that most beneficiaries can work and want to work. 
Jobseeker support brings together people on the unemployment sickness women alone and widows benefits and sole parents with children aged 14 years or older and those who do not have children. Those on jobseeker support will be expected to be available for and looking for full-time work. There will be some who are able to work only part-time and some who will be exempt from work for a period of time. 
Bringing sickness beneficiaries into jobseeker support marks a fundamental shift in attitude to support beneficiaries to get back to work as soon as possible. It will also increase the number of people on this benefit to 135000. Just as the health benefits of work are well documented we know that the health costs of unemployment are high. Professor Sir Mansel Aylward recently in New Zealand said: “After six months’ unemployment each additional day out of work is as detrimental to your health as smoking 200 cigarettes.” We know that work can play a vital role in recovery and the worst thing we could do is actually leave people with illness on benefits long term with no support. This bill will not do that. 
As with the current unemployment benefit the new jobseeker support will require people to reapply for the benefit after 12 months. Through the Future Focus changes we made in 2010 this change has seen thousands cancel their benefits. Many had already found work and no longer needed it. This bill also includes the flexibility to apply this to other benefit types in the future. 
Sole parent support replaces the DPB for sole parents and the widows benefit if the beneficiary’s youngest child is under the age of 14. Those with children over 5 will be expected to be available for part-time work and to be preparing for work before then. This benefit is expected to have around 87000 people on it because those previously on the DPB with children over 14 will have moved to jobseeker support. 
The supported living payment merges the invalids benefit and the DPB for those caring for the sick or infirm. Benefit eligibility for these groups will not change. We recognise that some people will never be able to work to support themselves or as full-time carers may not be able to. Because we are bringing those caring for others into this benefit the numbers on this benefit will increase to 91000. 
Changing the name is significant. It removes the outdated and demeaning attitude that disabled people or those with serious health conditions have nothing to contribute. I had many representations about the name. I will be very interested after submissions to see what the select committee recommendations are. 
Those with very disabling long-lasting or terminal conditions will have streamlined access to the supported living payment. They will be offered day services supported employment and community participation. Current provisions for people on the—as it is now—invalids benefit to try out paid work and return to a benefit seamlessly if it does not work out will remain under the supported living payment. 
People in the current benefit streams will automatically transfer—the bill makes a request for this—to the new appropriate benefit on 15 July 2013. 
Beneficiaries expected to be available for work will be required to take up suitable employment opportunities. Simply put if there is a good job and they are suitable they should take it. In the current climate a job is an opportunity not to be missed and as we know one job leads to another as people improve their circumstances. I believe that we need to send a clear signal about what it means to refuse work. For this reason the bill introduces a 13-week stand-down if a beneficiary fails to accept an offer of suitable employment without a good and sufficient reason. This is the same sanction that applies to people who become voluntarily unemployed either because they quit a job or were dismissed due to misconduct. 
I think it is important to note that the new benefit categories and associated rules would have meant a reduction in benefit levels for some if we did not fix that. I have ensured there are safeguards in this bill to protect the higher benefit rates of those currently on the women alone benefit and the widows benefit. I am also keeping the same abatement rules for those who are transferring to jobseeker support. If we had not done that it would have meant that those like those on the DPB with children aged 14 years or over who get a part-time abatement when they moved to jobseeker support would have been full-time. We are actually going to keep them on the part-time abatement—leave them there—so that they have that opportunity. 
Some speed-mentions if you like. This is a huge bill and has a lot in it. We will be at the select committee for the full time so that the members can really go through it. But as I think we have already said there will be pre-benefit activities. We are also looking at drug tests for particularly those on jobseeker support. Where there is a job available that requires a test they must be able to do that. Overseas absence is being also looked at. So beneficiaries with obligations to be looking for or preparing for work will not get a benefit while overseas except in exceptional circumstances. I think that is fair and reasonable. This will not affect superannuitants or those on the war pension or veterans pension. 
Work and Income will gather more information about people to determine what they can do and what sort of support they may need to get into work. The bill also provides Work and Income with the ability to require beneficiaries to work with contracted service providers. As well signalled there will be social obligations that will require parents to have their children enrolled in early childhood education from age 3 enrolled in and attending school and enrolled with a general practitioner and getting well child checks. As well indicated there will be warrants to arrest and those subject to warrants to arrest will have their benefit stopped after 38 days unless they clear them. There are also changes in the bill that enable the Ministry of Social Development to improve the way it procures goods and services for welfare recipients and it clarifies some things around sanctions. 
This is a significant bill. I commend it to the House. I wish the select committee good travels as it hears submissions from New Zealanders and reports back. I commend this bill to the House.