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Digest No. 1960

Social Security (Youth Support and Work Focus) Amendment Bill 2012

Date of Introduction: 19 March 2012
Portfolio: Social Development
Select Committee: As at 27 March, 1st reading not held
Published: 27 March 2012by John McSoriley BA LL.B, BarristerLegislative AnalystP: (04) 471-9626 (Ext. 9626) Caution: This Digest was prepared to assist consideration of the Bill by members of Parliament. It has no official status.Although every effort has been made to ensure accuracy, it should not be taken as a complete or authoritative guide to the Bill. Other sources should be consulted to determine the subsequent official status of the Bill.

Purpose

The main aim of the Bill is to amend the Social Security Act 1964 (the Act) “to introduce a new system of income support for young people and to change certain aspects of the benefit system by introducing a stronger work focus to some benefit categories” and “is a response to the review of the benefit system undertaken by the Welfare Working Group in 2010” [1]   .

Background

Generally

This Bill, “only one part of a comprehensive package of welfare reform staged over two years”, “significantly reforms the benefit system in two areas:

  • “support, obligations and services for 16-17 year olds and 16-18 year old parents;

  • “extension to work availability and work preparation for sole parents, widows, women alone and spouses and partners of people receiving a main benefit” [2]   .

Youth

“This Bill introduces two new payments for young people that will replace most benefits currently accessed by 16-18 year olds [by]:

  • “Youth Payment for 16-17 year-olds with no dependent children who have exceptional circumstances;

  • “a Young Parent Payment for 16-18 year-old parents (and, if aged 16-17 years, have exceptional circumstances or come from a low income family).

“The new payments will be based on the level of financial assistance available at 1 April 2012 and will be distributed through redirections (for accommodation and utility costs), a payment card (for food and groceries) and an in-hand allowance. An abatement-free income level will be set at $206.73 per week”.

The Explanatory note states as background for the Bills provisions relating to the “youth package”: “ the following: “Young people who come onto benefit generally stay longer than those who enter the welfare system at a later date. Over 50 per cent of people who first enter the benefit system at 16 or 17 years old spend at least five of the next 10 years on benefit. The lifetime cost of paying these young people a benefit is higher than for any other group” [3]   .

Youth obligations

The obligations will be:

  • full-time education, training or work-based learning working towards at least NCEA Level 2 qualification or equivalent;

  • undertaking an approved budgeting programme and requirements;

  • for parents, undertaking an approved parenting education programme and requirements [4]   .

Work availability expectations for sole parents, widows, women alone, and partners

“Under the current law, sole parents receiving the Domestic Purposes Benefit and spouses and partners of other main benefit recipients have part-time work availability expectations when their youngest child is aged six years of age, and have full-time work availability expectations when their youngest child reaches 18 years of age”. “Women receiving the Widows’ and Women Alone benefits do not have work availability expectations” [5]   .

This is changed to:

  • “require sole parents receiving the domestic purposes benefit and partners of other main benefit recipients to be available for part-time work when their youngest child is five years of age;

  • “require sole parents receiving the domestic purposes benefit and partners of other main benefit recipients to be available for full-time work when their youngest child is aged 14 or older;

  • “extend these work availability expectations to women receiving the widows’ benefit and the domestic purposes benefit for women alone;

  • “extend the ability to require pre-benefit activities before grant of a domestic purposes benefit for sole parents or women alone or widow's benefit” [6]   .

Main Provisions

Purpose

The Bill amends the purpose of the Social Security Act 1964 by providing that one of the Act’s purposes is to provide services to encourage and help young persons to move to education, training, and employment and to refer to the new requirements imposed on young persons (Part 1, Clause 4 amending Section 1A of the Act).

Applicant for a widow’s benefit must be at least 19

The Act provides currently that any widow is eligible for a widows' benefit if she is the mother of a dependent child or children.

The Bill has the effect of requiring all applicants for a widows' benefit to be at least 19 years old (Part 1, Clause 7, amending Section 21).

Applicants for domestic purposes benefit for solo parents must be at least 19

The Bill requires all applicants for a domestic purposes benefit for solo parents to be at least 19 years old (Part 1, Clause 8, amending Section 27B of the Act).

Applicants for domestic purposes benefit for home care of the sick or infirm to be 18

Currently applicants for domestic purposes benefits for care at home of the sick or infirm must be at least 16 years old; but that in the case of an applicant who is only 16 or 17 years old, the chief executive must be satisfied that no other caregiver is reasonably available to care for the person he or she is giving care and attention to.

The Bill provides that all applicants for a domestic purposes benefit for care at home of the sick or infirm who do not have a dependent child or children to be at least 18 years old and all applicants for a domestic purposes benefit under that section who do have a dependent child or children must be at least 19 years old (Part 1, Clause 9, amending Section 27G of the Act).

Standard eligibility requirements for the sickness benefit

Currently, an applicant for a sickness benefit must be at least 18 years old or must be married or in a civil union or de facto relationship, have a dependent child or children, and be at least 16 years old.

The Bill requires all applicants for a sickness benefit who do not have a dependent child or children to be at least 18 years old and all applicants for a sickness benefit who do have a dependent child or children to be at least 19 years old (Part 1, Clause 10, amending Section 54 of the Act).

Standard eligibility requirements for the unemployment benefit

The Bill raises the age of eligibility for an unemployment benefit. An applicant must be aged at least 18 years (in the case of an applicant without a dependent child) and at least 19 years in every other case (Part 1, Clause 15, amending Section 89).

Services for young persons to move to education, training, and employment

The Bill provides that the chief executive may provide services to encourage and help young persons to move to education, training, and employment, and/or enter into contracts with service providers to provide services of that kind on the chief executive's behalf. The chief executive may enter into information-sharing agreements with the chief executive of the Ministry of Education for the purposes of facilitating the provision of services to encourage and help young persons to move to education, training, and employment (Part 1, Clause 18, inserting New Sections 123E-123G into the Act).

Financial support for young people

This Bill introduces two new payments for young people that replaces most benefits currently accessed by 16-18 year olds:

  • a Youth Payment for 16-17 year-olds with no dependent children who have exceptional circumstances;

  • a Young Parent Payment for 16-18 year-old parents (and, if aged 16-17 years, have exceptional circumstances or come from a low income family).

The new payments are based on the level of financial assistance available at 1 April 2012 and will be distributed through redirections (for accommodation and utility costs), a payment card (for food and groceries) and an in-hand allowance. An abatement-free income level will be set at $206.73 per week. Such beneficiaries must be in full-time education, training or work-based learning working towards at least NCEA Level 2 qualification or equivalent. They must undertake an approved budgeting programme and those who are parents must undertake an approved parenting education programme and requirements.

Young people receiving the Youth Payment or Young Parent Payment, or who are the spouses or partners of older beneficiaries, will be supported to stay in education by service providers whose functions and responsibilities are to be set out in regulations.

The Ministry of Education is enabled to provide the Ministry of Social Development with information about school leavers which will be used to identify young people at risk. Information would include, for example, qualification data, contact details, and school attendance records. Young people would be offered additional support from primarily non-government organisation providers contracted by Work and Income (Part 1, Clause 20, inserting New Part 5 into the Act, New Sections 156-180).

Copyright: © NZ Parliamentary Library, 2012
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  1. Social Security (Youth Support and Work Focus) Amendment Bill, Explanatory Note, General policy statement, pp. 1 and 2.   [back]
  2. Ibid., p. 2.   [back]
  3. Ibid., pp. 2 and 3.   [back]
  4. Ibid., p. 3.   [back]
  5. Ibid., p. 5.   [back]
  6. Ibid., p. 6.   [back]