Minister for Social Development and Employment Louise Upston.
Photograph: RNZ/Samuel Rillstone

The documents revealed the coalition government had been warned that work-in-payment schemes did not increase people’s chances of leaving benefits and getting into work.

The cabinet agreed to bring a new proposal new obligations and sanctions packageIncluding community work experience (CWE) for job seekers next year.

Official advice received by the Greens under the Official Information Act shows that the Department for Social Development warned against CWE in May.

“As explained, CWE is essentially a work-for-pay programme, if it is to be made compulsory,” the department report said.

“Most evidence shows that paid work programs do not increase the likelihood of participants leaving assistance and moving into employment.

“Instead, participants continue to benefit from the benefit for longer than usual (known as the lock-in effect). Investing in other employment supports may be more cost-effective.”

The ministry said evidence shows CWE works best for people with limited work experience or preparation, and in some areas it is offered on an opt-in basis for clients who meet eligibility criteria.

“Staff also exercise discretion over which clients they recommend for these supports, particularly where funding is limited.

“Some programs have low uptake and/or limited funding; some districts choose not to offer these programs; and awareness among front-line staff is low.”

Job seekers will face more sanctions starting next year.
Photograph: RNZ

The department said it could take steps to “increase the likelihood of effectiveness” by using discretion and eligibility criteria for clients, restricting placement duration and hours, and requiring evidence of job seeking at the time of joining.

“As the evidence shows, the success of CWE depends on its implementation at the discretion of those who will benefit most.”

The ministry also warned that a new program would need to be created or significantly modify the existing program to implement mandatory CWE.

“This will require time and resources to work through operationalization issues and risks and will potentially take focus away from other aspects of the traffic light system.

“Consequently, you may want to prioritize other outcomes of CWE.”

Ricardo Menéndez March, the Green Party’s spokesman for social development and employment, said the government had overlooked official advice and evidence.

“(Social Development and Employment Minister) Louise Upston’s complete disregard for the evidence shows that she is not actually interested in improving employment outcomes and rather simply wants to continue to pressure beneficiaries with re-imagined policies from the 90s that do not support people getting back into life.” showing employment or to meet their demands.”

He said the coalition should keep the community work experience a model of engagement rather than enforcement to help people get benefits and get jobs.

“Louise has made a big game of stopping people from accessing benefits for too long, and yet her own advice shows that mandated temporary wage-earning programs could do the exact opposite of what she is trying to achieve.” Menéndez March said.

Ricardo Menéndez March.
Photograph: RNZ/Samuel Rillstone

In response to RNZ, Upston said the government was focused on reducing National’s welfare dependency, which has worsened since he last took office.

“Community Work Experience will be another tool MSD has at its disposal to keep job seekers on the path to employment when they are not meeting their employment or preparation obligations.

“We will design our own form of Community Work Experience that works for our benefits system. This experience will develop the skills and confidence job seekers need to help them become employed in the future.”

Upston said it’s possible to reduce the negative impacts of CWE so people can gain community connections and experience while focusing on seeking paid employment.

“As the authorities have noted, there are ways to mitigate the ‘lock-in effect’ associated with such interventions, by applying this to beneficiaries only where it makes sense given their circumstances, and by applying it for a relatively short period of time, such as four weeks, both of which would be features of this sanction.”

“Those who are required to do social work within the scope of our system will be expected to continue looking for a job while applying the sanction. The hours of social work they must do will be determined at a level that will allow this.”

The Ministry of Social Development is expected to impose new sanctions by July 2025 and the legislation will be submitted to the Parliament before the end of the year.

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