A Social Services Primer

Transcription

1 A Social Services Primer January 2005

2 Contents Contents...2 Social Welfare in New Zealand during the 1990s...3 The Current Situation...6 All Working Age Benefits...6 Unemployment Benefit...7 Sickness and Invalid s Benefits...8 Domestic Purposes Benefit...9 What we are doing...11 Employment...11 The Long-Term Unemployed...16 Sickness and Invalid s Benefit...18 Helping people on a Domestic Purposes Benefit back into employment...20 Childcare...21 Drug and alcohol testing...22 What is happening overseas...24 The OECD...24 The United Kingdom...25 Australia...25 Time Limited Benefits...26 What s Happening Next?...28 A Social Services Primer January

3 Social Welfare in New Zealand during the 1990s The 1990s opened with around 150,000 Unemployment Benefit recipients, 95,000 Domestic Purposes Benefit recipients, and 47,000 recipients of Sickness and Invalids Benefits a total of nearly 300,000 people of working age on benefit. The 1991 Benefit Cuts The decade saw significant changes to the benefit system, starting with the announcement by the newly elected National Government of its intention to reduce welfare expenditure by around a billion dollars. It achieved this through reductions in the dollar rates of benefits paid to all but two groups. While Invalids Benefit recipients and New Zealand Superannuitants had their benefit rates frozen for 1991 (i.e. no annual indexation), all other recipients faced a fall in their benefit income. The reductions ranged from 8.9% for a sole parent with two children, to 25% for a 20 year old single unemployment beneficiary. At the same time two other major changes were introduced. Firstly, there was substantial tightening of benefit eligibility, especially focussed around the unemployed, with the introduction of stricter tests of availability and willingness to work. Sanctions for leaving a job and for refusing an offer of employment were increased dramatically, with the introduction of a 26-week stand down. The second major change was the abolition of the universal Family Benefit from 1 April This was part of a move towards targeted assistance in place of universal assistance across a number of areas, including health and education. The increasing role of safety-net assistance The removal of income-related rents in state houses in 1993 saw a significant increase in assistance to low-income state house tenants through the Accommodation Supplement. Changes to the Special Benefit rules meant that those who faced hardship as a result of the benefit reductions or rental increases could get some additional assistance. Throughout the 1900s, Special Benefit numbers grew, and the rules were revised, both to address hardship, but also to constrain expenditure. So, for example, in 1995 and again in 1997, the income deficiency required before qualifying for Special Benefit was reduced from $20 per week to $10, then $5. At the same time, policy was introduced to increase the intensity of the review processes. Applicants were expected to manage down their costs as quickly as possible. The 1991 changes started with reductions in the dollar rates of benefits paid to all but two groups Eligibility rules were also tightened and the Universal Family Benefit was abolished Removal of incomerelated rents led to increased spending on Accommodation Supplement Special Benefit numbers grew from 20,000 in 1990 to nearly 40,000 in 1995 before falling, largely through the tighter administration, to be closer to 10,000 in A Social Services Primer January

4 By the mid-1990s, the number of people of working age receiving a benefit had increased to around 325,000. Unemployment benefit numbers grew to exceed 170,000 in 1993 and 1994, falling to just under 150,000 in June At the same time, Domestic Purposes Benefit numbers had grown to around 104,000 having stabilised for a few years. However by 1995 Sickness and Invalids Benefit numbers had reached 74,000. Unemployment Benefit numbers grew to exceed 170,000 in 1993 and 1994 and were just under 150,000 in June 1995 Mid 1990s: Benefit abatement and eased sanctions In the mid 1990s the emphasis broadened from reducing expenditure towards increasing incentives. A further round of benefit changes followed a review of employment policy by the arm s length Employment Task Force. The changes saw a relaxing of the very tight stand down and sanctions provisions, which had not proved workable. The changes entailed a more generous income exemption for beneficiaries with income from employment, especially for Domestic Purposes and Invalids Benefits, in order to improve work incentives. There were also a range of increases to family assistance, including the introduction of higher rates for older children, and the introduction of an in-work payment for low-income families not on benefit (the Independent Family Tax Credit). The package that introduced these changes also introduced increased requirements on some groups of beneficiaries. For example, spouses of unemployment beneficiaries became work tested if they had no children or the youngest child was aged 14 or over. This was a theme which became the centrepiece of the 1998 reform package Reform: Work tests for more groups, concerns over Sickness Benefit clients Of increasing concern at this time was also the emerging growth in Sickness and Invalids Benefit numbers. Changes to administration procedures in 1995 and 1996 introduced more frequent medical certificates and the requirement to see designated doctors every 13 weeks. These did not quell the growth in numbers, and more significant changes followed. By mid 1999, there were 84,000 Sickness and Invalids Benefit recipients. The 1998 Benefit Reform package aimed to address the continuing growth in benefit numbers by increasing the obligations placed on some groups to actively seek employment. The work test requirements, which had traditionally only been imposed on jobseekers, were extended to sole parents with children aged as young as six, and to spouses of other beneficiaries, including spouses of invalids beneficiaries. While there were some increases in funding to childcare programmes, the increased obligations were not accompanied by tailored labour market assistance. At the same time, the Sickness Benefit was abolished as a separate provision, and a Sickness and Invalid s Benefit numbers started to grow in the 1990s and by mid 1999 were at 84,000 A Social Services Primer January

5 work capacity assessment programme was to be developed for Invalids Benefit recipients. The Unemployment, Sickness, and Training Benefits were replaced by a single Community Wage which in theory was to mirror some aspects of a real wage something it was unable to do in practice, instead being accompanied by a further change in requirements and sanctions. Provisions for young people were tightened further, when a lower rate of benefit was introduced for 18 and 19 year olds who were living with their parents. The decade closed with more people subject to work test procedures even if many were subsequently excused an obligation. But it also closed with a significantly different type of benefit population than it opened with: around 165,000 unemployed, 110,000 sole parents and 84,000 Sickness or Invalids Benefit clients. As well as being up from a decade before (by 20%, or 59,000 people), the share categorised as having a health-related benefit had risen from around 16% to 23%. The Unemployment Benefit was temporarily replaced by a community wage By the end of the 1990s the benefit population had increased by 20%, with a greater proportion of these receiving health related benefits Summary Not only did the welfare policies of the 1990's lead to peak unemployment they denied any opportunity to those on benefits to get into work. The constant toughening up of benefit conditions had failed to reduce unemployment numbers and the community was desperate for the government to help people get back into work. A Social Services Primer January

6 The Current Situation All Working Age Benefits At the end of December 2004, 319,619 working-age people (aged years) were in receipt of an income-tested benefit. This number has been on a downward trend, and over the 2004 calendar year the number of recipients of an income-tested benefit decreased by 29,148, or eight percent. The number of people receiving an unemployment benefit at the end of December was 65,969, a thirty percent drop over the year, and the second- lowest rate of unemployment in the OECD. Unemployment levels are continuing to trend down, and the social welfare system is working increasingly to address skills shortages in an environment where skilled labour is sometimes scarce. New Zealand is like most other developed countries, in that it is experiencing a sustained increase in the numbers of people receiving income support for ill health and disability. About five percent of New Zealand s working age population is in receipt of these benefits, against an OECD range of typically about 5-7 percent. The number of people receiving a Domestic Purposes Benefit has not fallen since the replacement of the work test in 1999 and the introduction of enhanced case management and personal development and employment planning in In December 2004 there were 101,669 DPB Sole Parent Clients, down from 104,047 in December Over the same time, the employment rate of sole mother has increased, and there has been a sustained increase in the proportion of DPB sole parents exiting benefit to work. New Zealand now has the second-lowest unemployment rate in the OECD About five percent of the working age population is in receipt of income support for sickness or disability. This is typical for the OECD. A breakdown of the ethnicity of working age beneficiaries (aged 18-64) is provided below, for the end of December Benefit NZ European Maori Pacific Island Unspecified Other TOTAL DPB 45,382 42,882 9,980 1,638 9, ,339 Emergency Benefit 712 1, ,533 4,026 Invalids Benefit 41,956 14,810 2, ,028 72,543 IYB (Jobseeker) Sickness Benefit 23,585 11,027 3, ,073 45,648 Unemployment 27,902 22,688 4, ,444 65,969 Benefit Unemployment ,267 Benefit (Training) Unemployment 4,826 2, ,459 11,867 Benefit (Student Hardship) Widows Benefit 3,893 1, ,314 8,031 Total 149,067 97,574 22,992 5,338 44, ,699 A Social Services Primer January

7 Unemployment Benefit At the end of December 2004, 65,969 working-age people (aged years) were receiving an Unemployment Benefit. Over the year the number of recipients of an Unemployment Benefit decreased by 28,379, or thirty percent. Of these clients, more than forty percent are mature job seekers (aged years) and a further 25 percent have a current earnings declaration, indicating involvement in paid work within the last 12 months. The Treasury has reduced its forecast for expenditure on unemployment benefits in the current year as $920m, as compared to $1,691m of expenditure in 1999/2000 What proportion of the working age population receive an Unemployment Benefit? The proportion of the working-age population receiving an Unemployment Benefit increased between 1995 and 1999, but has decreased over the past five years, and currently stands at less than 3%. How long have current Unemployment Benefit clients been in receipt of that benefit? Of the clients receiving an Unemployment Benefit at 29 December 2004:?? About 59 percent had received an Unemployment Benefit continuously for less than one year?? Clients who had received an Unemployment Benefit for ten years or more longer up one percent of people on an Unemployment Benefit and less than 0.05 percent of the total working age population. Are people simply transferring off the Unemployment Benefit and on to other benefits? The best way to assess whether there have been real changes in the numbers of beneficiaries, or whether clients have merely shifted from one type of a benefit to another, is to look at the overall proportion of the working-age population that relies on a benefit. At 30 June 2004, just over 12% of the working-age population were receiving an income-tested benefit. This is down from 16% in 1999, and is lower than it has been at any time over the past decade. Only one percent of people on an Unemployment Benefit have received it for ten years or longer Unemployment figures are reducing because people are moving out of the benefit system and into work A Social Services Primer January

8 Proportion of the working aged population (18-64) who received an income tested benefit June 1994 to June % 16.0% 14.0% 12.0% Percent 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Year % Working aged population Sickness and Invalid s Benefits Who receives Sickness and Invalid s Benefits? At the end of December 2004, there were 72,543 working-age (18-64 years) Invalids Benefit recipients and 45,648 working-age Sickness Benefit recipients. Just over half of Sickness Benefit recipients receive the benefit continuously for less than a year, and two percent of people on the benefit have received it continuously for ten years or longer. Invalids Benefit recipients must have a permanent and severe incapacity. Just over one quarter of recipients have been receiving the benefit continuously for ten years or longer. Just under 70% of people in receipt of an Invalids Benefit are between 40 and 65 years of age. Less than two percent of people on a Sickness Benefit have received it for ten years or longer What are the most frequent medical conditions? Key presenting conditions for Sickness and Invalids Benefit clients include psychological and psychiatric conditions, muscular-skeletal disorders, back injury, heart disease and cardio-vascular disorders, metabolic/endocrine diseases and respiratory disorders. 1,953 Invalids Benefit clients and 367 Sickness Benefit clients died in the year 2004 reflecting the serious nature of some of the conditions that lead many people to need this assistance. Why has there been such a big increase in numbers of people on Sickness and Invalids Benefits? The growth in Sickness and Invalids Benefit numbers is part of a trend that has been underway for the past three decades. This pattern of growth is also occurring in most other OECD countries. The growth in Sickness and Invalids Benefit numbers is part of a 30-year trend, and is occurring in most OECD countries A Social Services Primer January

9 We know that approximately half the growth is due to population ageing, population growth, and the rise in the age of eligibility for New Zealand Superannuation from 60 to 65 starting from 1 April Older workers are more prone to develop health and ageing-related conditions that cause them to need a Sickness Benefit. Other factors driving growth are the increase in diagnosis of mental health conditions and the community treatment of people with such conditions. This growth could also be associated with increasing prevalence of diseases such as heart disease, diabetes and increasing recognition of psychological/psychiatric disorders such as stress and depression. Some of the growth in Invalids Benefit numbers is also due to the health effects of long-term unemployment. A stronger focus on people who have been on the unemployment register for longer periods enables identification of people who face health-related barriers to employment. Also the labour market has tended to be less receptive to the employment of people with disabilities or illness they are generally the first to be let go in down times, and the last to be taken on when job conditions improve. Domestic Purposes Benefit Domestic Purposes Benefit Sole Parent numbers have fallen since the removal of the work test in In December 1999 there were 104,047 Domestic Purposes Benefit Sole Parent clients. In December 2004 there were 101,669 Domestic Purposes Benefit Sole Parent clients. The employment rate for all sole mothers has increased from 39.5% in June 1999 to 45.3% in November 2004 an almost six percentage point increase. DPB numbers have fallen since the removal of the work test in 1999 Clients on the Domestic Purposes Benefit are case managed by the Ministry of Social Development with a view to being in employment to the extent that this is possible. Since 2003 every DPB beneficiary (except for those who are caring for someone who is sick or infirm) has had a Personal Development and Employment Plan developed to help them get into the workforce. How long do people spend on the Domestic Purposes Benefit? At the end of November 2004 just under one-quarter (25%) of DPB clients had received benefit for less than one year, and 44% for between one and four years. Just under one-third (31%) had received benefit for four years or more. A Social Services Primer January

10 Are more or less people leaving the Domestic Purposes Benefit to go into employment? There has been a sustained increase in the proportion of Domestic Purposes Benefit Sole Parent clients leaving benefit for work, from 19% in March 1997 to 36% in March Under the work test, 17.5 per 1,000 Domestic Purposes Benefit or Widows Benefit clients left benefit each month. This had risen to 18.8 per 1,000 clients in June 2004 following the introduction of enhanced case management and the personal development and employment planning process. There has been a sustained increase in the proportion of DPB sole parent clients exiting benefit into work Since July 2003 there has also been an increase in participation in part-time work among Domestic Purposes Benefit Woman Alone and Widows Benefit clients. What about people who have additional children while receiving Domestic Purposes Benefit? Of those receiving Domestic Purposes Benefit in October 2004, 23,160 Domestic Purposes Benefit Sole Parent recipients (23%) had additional children while on benefit. Of those with additional children, 16,852 (73%) had only one additional child. In many of these instances, the child had been conceived before the benefit was granted. Less than a quarter of people on the DPB in October 2004 had additional children while on benefit Case management revealed examples of very complex and chaotic lives among those who had more than one additional child while receiving Domestic Purposes Benefit. Work and Income reviewed three clients who had an extra eight and seven children respectively, while receiving benefit. In each case the client had low educational attainment and high levels of family violence and dysfunction. The case management approach has concentrated on getting stable accommodation and support for the families. When a client has an additional child while on benefit, the Benefit Control Unit may be asked to investigate the client s relationship with the father and ongoing benefit entitlement. A Social Services Primer January

11 What we are doing Employment Getting people into employment is a key priority for this government. The Labour-led government has delivered a strong economy, which has brought more jobs than ever before. Over the last five years we have:?? Had continuing strong growth at 4.6 per cent in the year to September 2004.?? Had record employment - 230,000 more people employed since the beginning of 2000, that's 140 more people in work each day.?? More than halved the number of people receiving the Unemployment benefit since we took office in 1999 over 55 per cent. Our unemployment rate is 3.8 per cent - the lowest since the present series began in 1986 and the second lowest in the OECD.?? Put over two million New Zealanders in work.?? Put more Maori and Pacific people in work than ever before Between 1999 and 2004 Maori employment grew by 29 percent and Pacific employment grew by 25 percent.?? Had Maori unemployment drop from 18.5 percent in the year ended March 1999 to 9.1 percent in the year ended September Employment Strategy On taking office in 1999, the Government decided that a better approach was needed to co-ordinate Government activity aimed at increasing employment. This lead to the development of the Government's Employment Strategy in 2000, which set out its key employment objectives, including:?? Maximising the number of jobs that provide opportunities to increase potential and enhance productivity?? Minimise persistent disadvantage in the labour market and enhancing the sustainability of employment?? Improving the quality of people's working lives. The Government's Employment Strategy provides a comprehensive approach to employment policy designed to sustain and improve economic growth and employment opportunities in New Zealand. A high performing labour market is essential for sustained economic growth. Creating the right conditions for business growth and high productivity leads to greater job opportunities and higher wages for workers. The Employment Strategy works to help create those right conditions for employment and to maximise job opportunities. A Social Services Primer January

12 Eight goals work to co-ordinate government activity that contributes to the achievement of the Employment Strategy's objectives.?? Ensuring macroeconomic policies enable sustained economic growth and its accompanying job creation?? Promoting an employment rich, high productivity economy. E?? Developing a highly flexible, highly skilled workforce that is responsive to the needs of the labour market and an innovative economy.?? Developing community capability as a source of employment opportunities.?? Promoting a fair employment environment that enhances working relationships?? Improving participation in employment, earnings and the quality of employment for Maori.?? Improving participation in employment, earnings and the quality of employment for Pacific Peoples?? Improving participation in employment, earnings and the quality of employment for women, youth, mature job seekers, people with disabilities and other groups at risk of permanent and long-term unemployment. Youth Transitions Government and the Mayors Taskforce for Jobs have identified young people as a group whose participation in the labour force and other positive activities can and ought to be improved. A joint goal has been established of ensuring that by 2007, all year olds will be engaged in appropriate education, training, work or other options that will lead to long term economic independence and well-being. The Youth Transitions work programme has three areas of focus in the short term to improve transitions for at-risk youth into education, training, work or other activities including?? Enhancing careers information, advice and guidance for school students through the 'Designing Careers' pilot in schools.?? Building on and better co-ordinating the post-school local support services for youth most at risk. The Ministry of Social Development is rolling out Youth Transitions Services in a number of regions to provide at risk youth with access to career planning and jobseeking help, and to encourage and assist youth to take advantage of education and training opportunities.?? Enhancing the vocational education and training available at school and post-school, through programmes such as the Gateway programme which provides senior secondary students structured workplace learning across more than 50 industries and hundreds of businesses around New Zealand. A Social Services Primer January

13 Workplace productivity working group The government appointed the Workplace Productivity Working Group in February 2004 to identify issues affecting New Zealand's workplace productivity and how they might be addressed. The final report of the WPWG was released in November The report identified a number of drivers that will act to increase workplace productivity. These include building leadership and management skills, creating productive workplace cultures, encouraging innovation and the use of technology, investing in people and skills, organising workplaces better, networking and collaboration and measuring what matters. Together, these set out a Workplace Productivity Agenda for responding to the workplace productivity challenge. A key component of the agenda is the shared responsibility for action among industry, firms, unions, employees and government. Pathways to Opportunity In June 2001 the Government published Pathways to Opportunity. This statement set out the beginnings of an overhaul of social security in New Zealand. Its new approach to social security was set out in six areas:?? A simpler system?? Making Work Pay and Investing in People?? Supporting Families and Children?? Mutual Responsibilities?? Building Partnerships?? Tackling Poverty and Social Exclusion In 2001 the Government published Pathways to Opportunity which set out the beginnings of an overhaul of social security in New Zealand In the three years since the release of this document, we have made considerable progress in these areas. We have:?? introduced the Jobs Jolt package to tackle skill shortages and provide more support to disadvantaged job seekers, including people with disabilities, long term ill-health or drug dependence and mature job seekers, and to clarify work expectations for the unemployed?? implemented enhanced case management for Domestic Purposes Benefit recipients to support sole parents in planning their move into employment. A similar concept is being extended to Sickness Benefit (SB) and Invalid s Benefit (IB) recipients. We have also reduced job-seeker caseloads?? provided more short-term financial assistance to help job seekers with the costs of starting a new job?? actively supported and worked in partnership with third sector organisations to provide effective services which respond to locally-identified pressures and priorities A Social Services Primer January

14 The Government has also introduced programmes to focus on Maori and Pacific unemployment. The Pacific Wave strategy aims to reduce the levels of unemployment for Pacific peoples particularly in the Auckland region by 50% by the end of June As at end of June 2004, the Pacific unemployed register in Auckland had reduced by 35.5%. Between June 2003 and June 2004, the number of Pacific clients receiving the Unemployment benefit reduced by 2,532 (31.4%). Further expansion of this programme is planned to align with the strategies that are underway in other regions. The Ministry of Social Development has also been delivering a three year Maori Employment Strategy, that has specific initiatives to target the needs of individual regions and focuses on keeping Maori in employment once they are there. According to the most recent Household Labour Force Survey, Maori had the largest fall in unemployment in the year to September The Maori unemployment rate fell to 9.1 percent in the year to September 2004 from 10.6 percent in the year to September 2003, larger than the fall for Other ethnicities (from 7.5 to 6.7 percent), and for European/Pakeha (from 3.5 to 3.1 percent). Jobs Jolt In late 2003 the Government launched a package of employmentfocused initiatives under the title Jobs Jolt. Jobs Jolt is focused on ensuring that people are well prepared to match actual needs in New Zealand industries, and has led to the forming of a number of partnerships between the Government and these industries. Maori had the largest fall in unemployment in the year to September 2004 The Jobs Jolt programme ensures that people are well prepared for real jobs in partnership with New Zealand industries Through the partnership, industries play a key role in the training programme, and they provide employment for people once the training is complete. Participating industry organisations include the Hospitality Association of New Zealand, National Road Carriers, the New Zealand Plumbers Association, Master Plumbers, Gas Fitters and Drainlayers New Zealand, and InfraTrain, Roading New Zealand and the New Zealand Contractors Federation. Jobs Jolt also focused on providing help for the long-term unemployed, sole parents, and people who are sick or disabled. Initiatives included:?? A Limited Employment Locations policy that can lead to cancellation of benefit for people seeking to move to a location where employment opportunities are severely limited Jobs Jolt also helps the long-term unemployed, sole parents, and the sick and disabled to find employment A Social Services Primer January

15 ?? Extra support for the long-term unemployed, including a specialist assessment service to refer clients to help with any issues that may prevent them from obtaining work?? Enhanced one-on-one assistance to help sole parents to return to work?? New services to help people receiving a Sickness or Invalid s Benefit to return to work?? A new initiative to help job seekers aged to seek work. Working for Families The Working for Families package announced in Budget 2004 is a huge step forward. Working for Families will hit poverty hard, and make work pay. It also starts to simplify the system, by reducing the number of benefit rates, taking support for children out of main benefits, and simplifying the abatement of the Accommodation Supplement. Working for Families will ensure that people who work are better off as a result of their effort The Working for Families package is designed to:?? ensure people who work are better off as a result of their effort?? ensure families have incomes sufficient to provide their children with a decent standard of living?? ensure people receive their full entitlements?? simplify the benefit and tax-based family income assistance structure The following Working for Families initiatives improve work incentives: When October 2004 What Childcare and Out of School Care subsidy rates and thresholds increase Abatement of Accommodation Supplement for people receiving a benefit is removed Working people canto earn more before their Accommodation Supplement is reduced 1 April 2005 Family support rates increase and the child component of benefit moves to Family Support 1 April 2006 A new In-Work Payment is introduced for working families to replace the existing Child Tax Credit The abatement threshold for Family Assistance increases to $27,500 per year The Family Tax Credit increases 1 April 2007 Family Tax Credit further increases Family Support rates increase again by $10 per child per week About 60%of the new Working for Families expenditure will be directed to families in A Social Services Primer January work

16 The changes will make work pay for low and middle income families with dependent children. About 60% of the new expenditure will be directed to families in work. In addition, for the first time, family assistance levels will be regularly adjusted on account of inflation. The Working for Families package provides greater incentives for Domestic Purposes Benefit and Widows Benefit clients to enter work, including greater support with childcare costs, and seminars for clients in part-time work to show them the financial advantages of moving in to full-time work. The Long-Term Unemployed About one percent of people receiving an Unemployment Benefit have been in receipt of it for ten years or longer. There were 520 people in this category at the end of December Very long-term unemployed clients may face a variety of different issues, such as complex personal or social issues, low levels of literacy and numeracy, or practical barriers such as lack of transport. New initiatives are helping very long-term unemployed clients to overcome a variety of complex personal and social issues so they can find work A number of new initiatives have been introduced recently to help these clients get into employment. As the number of unemployed clients reduce, case managers are able to spend more time working with the longer-term unemployed to get them into work. New initiatives include: Integrated Model for the Long Term Unemployed This focuses on clients under 60 years of age who are reaching three years continuous benefit duration. It provides intensive case management, including increased contact with case managers, to identify barriers to employment and provide intensive work readiness training. Where necessary, clients will be placed into jobs with an enhanced wage subsidy programme. It has initially been introduced in Wellington, Manukau and Northland. Urban Employment Service An urban employment service is being established nationwide that aims to see all urban, working age clients, who have been unemployed for longer than three years visited in their homes. Extra Assistance for the Long-term Unemployed. This provides specialised assessments of long-term unemployed clients, to identify their barriers to unemployment so these can be specifically and individually addressed. A Social Services Primer January

17 Removing the work test exemption for clients aged years, which allows sanctions to be imposed on this group if they fail to comply with work test obligations. Strengthening the actioning of sanctions where a client fails a work test obligation. In March 2004, following implementation of the initiative, 79% of work test initiations resulted in a decision that the client had failed to comply with the work test obligations. This compares with 30% in March What assistance is available for clients with literacy problems? MSD has provided adult literacy interventions as part of the employment assistance options offered to job seekers that require assistance with foundation skills and who are at-risk of becoming long-term unemployed. Since 2001/02, MSD has had a dedicated annual allocation of $900,000 for the purchase of adult literacy programmes. The objectives behind MSD s support for adult literacy programmes are to:?? meet the individual needs of job seekers (foundation skills/life skills)?? increase adult literacy levels?? lead job seekers into sustainable employment. MSD provides adult literacy services to job seekers who need help with these, and who may otherwise become unemployed longterm The Adult Literacy Programmes providers cover a wide range of programme content, which includes:?? reading, writing and numeracy?? using IT to interrelate, communicate, complete exercises, access various websites?? ESOL type curriculum comprising familiarisation with the alphabet, greetings, and basic labour market information?? exploring training options involving literacy and numeracy?? interactive exercises involving role-playing and videos?? communication skills for the workplace?? work towards achieving NZQA unit standards?? standard driver s license with intense literacy support?? vocational curriculum e.g. CV writing, job search skills. MSD contracts a range of providers to deliver Adult Literacy Programmes. The majority of providers are Private Training Establishments, specialist literacy organisations or Adult Community Education organisations. What about Work for the Dole? The previous work for the dole scheme (the Community Work scheme) that operated in New Zealand in the late 1990 s was scrapped it because it didn t work. A Social Services Primer January

18 The evaluation of the Community Work scheme found:?? Chances of paid employment for participants were lower than for a comparison group who were not participating?? The scheme had more negative outcomes for benefit recipients than the previous Community Task Force programme?? Those on the scheme regarded the community work as real work, and therefore were less motivated to look for work while they were on the scheme. A recent evaluation of the Australian work for the dole scheme conducted by the Melbourne Institute of Applied Economic and Social Research found similar impacts to the New Zealand evaluation. They found that participation in work for the dole was associated with a large and significant adverse effect on the likelihood of exiting unemployment benefits. Sickness and Invalid s Benefit Many people with ill health or a disability want to work and, given the right opportunities and support, may be able to move into full-time, part-time, or intermittent employment. MSD is developing employment-focused services for Sickness Benefit and Invalids Benefit recipients. These include: MSD is developing employment focused services for Sickness Benefit and Invalids Benefit recipients Focused, one-on-one case management. MSD is enhancing the way people on Sickness and Invalids are case managed so their individual needs can be identified and addressed. This is being rolled out nationwide. It will extend the options for these clients and increase the time available for case managers to work with them. Employment programme development. MSD is providing better access for Sickness and Invalids Benefit clients to existing employment assistance, providing tailored assistance, and developing employment-focused programmes for people with ill health or a disability. Examples of employment programmes include:?? Workwise (Auckland), and employment service for people with longstanding mental illness?? Workfirst, (Wellington) an early intervention service for people under 25 experiencing their first episode of psychotic illness?? Te Rau Pani (New Plymouth) integrates an employment focus into a mental health clinical team operating under kaupapa Maori?? Kaleidescope (Christchurch) offering a service to clients with serious spinal injury A Social Services Primer January

19 Access to health services. For some people, access to health services may be the issue preventing them from taking up employment. New services are helping these clients to get access to these services so they can return to employment quickly. These services include: Providing Access to Health Solutions (PATHS). This service enables clients to access a tailored package of assistance, including physical and mental health services, to move into work. Currently operating in Manukau and Wellington, the PATHS concept will be extended to four further sites by June New services will help people who could get employment if they had better access to health services ProCare (Auckland) works with clients with stress, anxiety or depression, providing access to mental health services and specialised work brokers. Services to employers. Services are being introduced to help employers employ and retain people with ill health or a disability. This includes specialist work brokerage, co-ordination of all available employment support, and a service focussed on retaining the links a person has with their employer, wherever possible People are determined to be eligible for a Sickness or Invalid s Benefit on advice from a doctor that they are unable to work because of sickness or disability. Who decides whether a person can get a Sickness or Invalid s benefit? Eligibility for a sickness benefit is determined by a general practitioner, who must certify that the person has had their capacity for work affected by sickness, injury or disability. In the case of the Invalids Benefit, clients are assessed by a doctor who is designated by MSD, who must verify that the person is permanently and severely restricted in their capacity to work. A GP must verify that a person is too sick, injured or disabled to work for them to receive a Sickness Benefit SB clients are required to provide regular medical certificates signed by their medical practitioner to confirm their continued incapacity for work. The initial certificate is accepted for a maximum of four weeks, and subsequent certificates for up to 13 weeks. When a medical practitioner completes a medical assessment to determine if a person meets the medical criteria for IB they are required to indicate whether the person needs to be reassessed. If a reassessment is recommended the person will subsequently be required to have a medical reassessment completed by a designated doctor A Social Services Primer January

20 Why did you scrap designated doctors for SB and IB and capacity testing to tell who could go back to work? Designated doctors are still used for Invalids Benefit. People in receipt of Sickness Benefit see their own doctor who will advise when they are medically fit to return to work. Designated doctors were used with sickness beneficiaries for a period, but it was found to not significantly improve assessment over the assessment of the person s own GP. It was also costly. Capacity testing attempted to determine whether a person really was too ill to work. The pilot failed because the test took no account of people s cyclic conditions. A person might be well enough to work one day, but not the next. It focused on physical incapacity, despite the evidence that mental health problems were a major cause of the rising numbers of disability beneficiaries. And the test did not work with any consistency testers could not agree about the work capacity of an individual, proving that the test had no reliability. Designated doctors for sickness beneficiaries did not significantly improve assessment over that of the person s own GP, and was costly. How are you helping GPs to make the right assessment? MSD is currently working with health professionals to improve the process of certification. The focus of this work is on finding ways to provide support for certifying GPs. This reflects feedback from GPs and learning from the experience of ACC. MSD is introducing a system for GPs to seek a second opinion in situations where they have some doubt about a client s eligibility. This doubt might arise from the nature of the person s health condition or the broader ongoing relationship that the GP has with a client and their family. MSD is also working with GPs locally to communicate the need for people to be actively supported to return to work, to ensure GPs understand the eligibility requirements, and to see whether they need any further support to enable them to undertake their certifying role. MSD is introducing a system for GPs to seek a second opinion in situations where they have some doubt about a client s eligibility Helping people on a Domestic Purposes Benefit back into employment For Domestic Purposes Benefit clients, the benefit system is focused on working with them to move them into work, as their family and individual circumstances allow. In 2002, changes for Domestic Purposes Benefit and Widows Benefit clients were introduced to improve this focus. These changes lowered caseloads, removed the work-test, provided for the delivery of enhanced case management, and introduced Personal Development and Employment Plans (PDEPs). A Social Services Primer January

21 Since March 2003 every current Domestic Purposes Beneficiary (except for Domestic Purposes Benefit Care of Sick or Infirm) and Widow s Beneficiary has been interviewed by a case manager and had a PDEP established. New applicants are interviewed within six weeks of application, unless the plan is temporarily deferred. A plan can be deferred, for example, if the applicant is having difficulty coping with recent bereavement or separation or the client or a child is seriously ill. Every eligible Domestic Purposes Benefit client is interviewed and has a Personal Development and Employment Plan At the end of November 2004, 93% of all Domestic Purposes Benefit clients had a Personal Development and Employment Plan. Nearly 60% of plan steps are focused on education, training or employment. How are sole parent beneficiaries being encouraged to identify the paternity of the child? In March 2004 the Government introduced a package of measures to encourage sole parent beneficiaries to identify paternity and apply for Child Support. The package was introduced to address the increasing numbers of sole parents subject to a benefit reduction of $22 per week, per dependant child, where the father was not named in law or in an application for Child Support. The changes to Section 70A of the Social Security Act include increasing the reduction an extra $6 per week, per beneficiary. To encourage more clients to identify the father, a range of supporting measures have also been introduced. This includes interviewing all current Domestic Purposes Benefit clients with a reduction on their benefit. Since 1 July ,797 clients have been interviewed by field staff to discuss the reduction and the steps they can take to have it removed. From this, 11.4% have had their reduction removed. The total number of clients with a reduction has decreased from 20,061 at 1 July 2004 to 17,568 at 31 December The number of clients with a reduction, as a percentage of all sole parents, has had a corresponding decrease of 17.3% to 16.18% over the same period. 10,797 DPB clients have been interviewed by Field Staff and 11.4% have had their reduction removed Information is also now provided to clients at an early stage so they know the importance of making this declaration. For example, pregnant single women applying for a Sickness Benefit will be provided with information about identifying paternity through their maternity carer. Childcare What childcare services are currently available? MSD currently provides the following assistance towards Childcare and Out of School Care and Recreation (OSCAR). This is in addition A Social Services Primer January

22 to other assistance that is provided by the Government to directly subsidise child care costs. Fee Subsidy Parents in employment or training can receive a subsidy of up to $2.84 per hour for a maximum of 50 hours per week of childcare. This is available to users of Early Childhood Education and approved OSCAR services. Parents must meet specified income thresholds to qualify. These income thresholds were increased as part of the Working for Families Package, and currently mean that over 90% of sole parents and 50% of couple families could be eligible for some assistance. The maximum hourly rate of subsidy will increase by a further 10% in October As part of Working for Families, more than 90% of sole parents and 50% of couple families could be eligible for some childcare assistance Assistance to OSCAR Providers A Development Grant of up to $3,000 is available to OSCAR providers to help set up programmes, and an Assistance Grant of up to $9,000 per annum is available for ongoing costs. Training, advice and support are also available to providers through OSCAR Fieldworkers. This assistance was introduced in 2002 to support the supply of viable, quality OSCAR services. An evaluation of this funding has shown that there has been a positive impact on the stability of OSCAR programmes and that the supply of quality programmes has improved. It has also shown that half of the funded programmes have expanded to create more places. Drug and alcohol testing In October 2003, MSD implemented new guidelines to clarify its policy around clients looking for work in industries and jobs that may conduct pre-employment drug testing. Clients who choose to look for jobs in industries that may administer pre-employment drug testing will fail the work test if: The drug and alcohol testing policy seeks to promote changes in client behaviour?? they fail to attend an interview for a suitable job without a good and sufficient reason?? they attend an interview for a drug-tested job, but refuse to take a drug test when asked?? they fail a pre-employment drug test. A key focus of the policy is actively communicating expectations to clients by: A Social Services Primer January

23 ?? informing each client coming on to Unemployment Benefit about the pre-employment drug testing policy through the WRK4U seminar?? explaining the likelihood and implications of drug testing to clients seeking work in an industry that may require a preemployment drug test?? offering referrals to drug education or counselling where clients indicate they want assistance with drug related issues. The policy has resulted in MSD working more closely with industries that conduct pre-employment drug testing to clearly state our expectations to clients, and working with clients so they meet the expectations associated with that industry. A Social Services Primer January

24 What is happening overseas The OECD Overall, New Zealand s labour market performance is among the best in the OECD:?? New Zealand s 2003 employment rate of 72.5% was higher than the OECD average of 65%. It was similar to that of the United Kingdom 72.9%, United States 71.2% and Canada 72.1% and higher than Australia 69.3% 1?? New Zealand s current unemployment rate of 3.8% is the second lowest in the OECD after South Korea. New Zealand s labour market performance is among the best in the OECD The OECD have recently argued that a variety of approaches can be successful in delivering high employment. Citing New Zealand alongside Denmark, the Netherlands and the United States as countries with high employment despite different policy settings and institutions, the OECD have called for greater understanding of the range of successful reform approaches 2. Speaking in Wellington, Dr Raymond Torres, Head of Employment Analysis and Policy Division at the OECD, argued that there is no single way to high employment 3. Whilst one approach is to reduce benefit levels and their duration, and reduce demand-side barriers (the deregulation approach), this will not be enough in certain cases such as sole parents. Increasingly there is a recognition that a third approach neither doing nothing, nor cutting benefits can achieve results as good or better than the deregulation approach, without damaging social protection. The alternative is to reform benefits, maintaining them at an adequate level, but introducing a mutual obligations approach. This alternative approach can be good for economic growth. As well as New Zealand, countries such as Denmark and the Netherlands have adopted this new approach, in contrast to the more deregulation-focused approach of the US, with employment rates as high if not higher than the US. 1 OECD Employment Outlook Statistical Annex, Reassessing the OECD Jobs Strategy, OECD Employment Outlook, Towards More and Better Jobs, presentation by Raymond Torres, Head of Employment Analysis and Policy Division, OECD, to the Social Policy, Research and Evaluation Conference, Wellington, November A Social Services Primer January