27 July 2006


First of all, apologies to anyone inconvenienced by my being sick this week.
Anyway, this week I thought I'd draw your attention to the numbers of people on benefits in NZ. You can find recent stats on MSD's Website. The good news is basically that 'The number of clients receiving a main benefit at the end of June decreased from 354,240 to 280,299 between 2001 and 2006' (to quote from one of the MSD fact sheets). By 'main benefits' they mean the income-tested working-age benefits, especially unemployment, DPB, sickness, invalids', widows' etc.
The main reason for the decline in numbers is low unemployment - making it easier to keep people off benefits, or move those on benefits back into employment. An opposite trend, though, has been rising numbers on sickness and invalids benefits. This is driven by demographic ageing, a rise in age of eligibility for the public pension, and deinstitutionalization in mental health.
So, what happens when unemployment rises again? Obviously benefit rolls increase too. But worse: The new Working for Families policies make the assistance to families with jobs much more generous than to those without jobs. So, now, if you lose your job as a family breadwinner, the impact is that much worse if you end up on any form of state assistance (including ACC, if you were injured at work). 'Making work pay' also makes losing your job much more of a penalty.


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