Welfare Reforms Drive Record Jobseekers into Work as Benefit Sanctions Rise

“The Government has worked hard to get inflation under control, return discipline to public spending, and get families out of emergency housing,” Upston said.

The government’s relentless focus on effective welfare reforms and increased accountability for job seekers has resulted in a significant increase in the number of people moving from benefits into employment during the September quarter, according to Social Development and Employment Minister Louise Upston.

Upston reported that 16,071 people cancelled their Jobseeker Support benefits between July and September because they found work, marking an 18% increase from the same period last year. This figure is up by 2,457 people compared to 2022, illustrating the impact of the government's emphasis on moving people into employment.

Key to this improvement has been the rise in benefit sanctions, which saw a 133.3% increase year-on-year. Sanctions are applied to job seekers who fail to meet their obligations, such as attending job interviews or participating in work preparation activities. Upston noted that the introduction of consequences for non-compliance is yielding results. “It’s clear that returning consequences for job seekers who don't fulfil their obligations to prepare for or find work is having an impact,” she said.

In total, 18,516 people left the benefit system entirely due to securing work during the September quarter, which represents a 12.7% increase. Upston extended her congratulations to all those who transitioned into employment while acknowledging that more work is needed to repair the broader employment market.

Amidst these positive developments, there are encouraging signs in other areas as well. The Ministry of Social Development (MSD) reported a 10.4% decrease in hardship assistance, resulting in a savings of $55.2 million for taxpayers. The reduction in grants for food and emergency housing was the main driver of this cost reduction.

Despite these gains, Upston noted that the effects of the cost-of-living crisis continue to impact benefit numbers. However, she highlighted the Welfare That Works reforms, which introduced greater frontline case management, community job coaching, and more regular work seminars for job seekers, as key factors in reducing dependency on welfare.

“The Government has worked hard to get inflation under control, return discipline to public spending, and get families out of emergency housing,” Upston said. She also pointed out that other government initiatives, including tax relief, falling interest rates, and the FamilyBoost childcare payments, have contributed to improving the financial situation of many New Zealand families over the past year.

As Upston concluded, there are “green shoots of change” emerging in these latest figures, though she emphasized the need for sustained efforts to address the lingering effects of low economic growth on the employment market.