New 'Non-Financial' Benefit Sanctions Begin Today
New "non-financial" benefit sanctions starting today are about having "more tools available" than the current options, says the minister for social development.
But the Greens spokesperson for social development says it's "misleading" to label them as non-financial, because the impacts of those sanctions will be financial.
Ricardo Menendez March also criticised Louise Upston for going ahead with the change, despite a note by officials it could risk increasing financial hardship, a statement the Minister rejects.
From today, two new sanctions can be applied when someone on a main benefit does not meet their obligations.
The first was 'Money Management,' where someone who did not comply would have half their benefit put on a payment card for four weeks.
"The card can only be used at approved shops for groceries, transport, health, and education-related items," said Upston.
People would still get the remainder of their benefit, as well as any supplementary assistance, directly into their bank account.
Upston called 'Money Management' a "non-financial sanction" and said it would only be available to clients for their first offence, if they are in "active case management" or have dependent children.
Those who do not meet that criteria would have a regular financial sanction imposed as before.
The other new sanction - 'Community Work Experience' - meant those who did not meet their work obligations might have to complete at least five hours per week for four weeks of work with community or voluntary sector organisations.
Ministry of Social Development staff will consider a client's circumstances before deciding on and imposing the new sanction to ensure it is the best option for a client.
"These very fair and reasonable sanctions will allow clients to continue receiving their full benefit, instead of the 50 per cent reduction they would have experienced with a financial sanction," Upston said.
Upston said she had heard people were concerned, particularly if there was a household with children, if a benefit was reduced. This legislation provided more options, she said, and the new sanctions stay in place for four weeks, "which will support their efforts to find a job."
The Regulatory Impact Statement for the legislation had outlined a payment card "exacerbates the risk of a client facing hardship".
But Upston "utterly rejects" that, "because if you have 100 percent of your benefit with 50 percent of it on a card, that is still better than only getting half your benefit or no benefit" - referencing the previous sanction options available.
She called it a "sensible move" and said the new measures will "encourage people off welfare and into work," but couldn't say exactly how many people would move into work as a result of this policy.
"The new sanctions will ensure accountability in the welfare system for people who don't meet their obligations, while also recognising that reducing benefits isn't the answer for everyone."
But only about 1.2 percent of beneficiaries are currently not complying - about 4000 people at the end of April 2025 - and Upston said there are "only 288" children affected within those 4000 people.
It was not possible to know exactly how many people would have these new sanctions imposed because it depended on decisions by case managers, but the intention is to get people into work, she said.
"I want them to realise we're serious about them taking the steps to find a job, and if they don't, there's a consequence," said Upston.
"At the end of the day, we want fewer people on welfare and more people in work."
When asked how many of those not complying would likely move into work as a result of a new "non-financial" sanction, Upston referenced numbers from the past year showing an increase in the number of people leaving the benefit for work.
"It's up 11 percent on the same time a year ago" she said, which was "great news", but was not able to quantify how this policy would make a difference.
Green MP Ricardo Menendez March has ridiculed the changes.
"The minister has been misleading the public around the impacts of this sanction not being financial, they are financial, and they will cause harm in our communities, which is why the Greens will repeal it as soon as we get into power."
He said people would not be able to access financial assistance such as hardship grants, and the "end result will be families unable to afford their rent, their bills and potentially leaving countless of families at risk of homelessness".
RNZ reported in March that government data had showed beneficiaries sanctioned with money management cards will often be unable to pay rent, putting them at risk of homelessness.
March raised this issue, saying the average person on the job seeker benefit paid more than 50 percent of their income on rent, and those impacted by the sanction would be "unable to afford to keep a roof over their head or put food on the table".
Upston acknowledged some people may get supplementary financial assistance as well, to cover rent that was more than half their income, and if that was the case, "they will not be an appropriate candidate for money management". She said Community Work Experience might be a better option for them and those decisions were for MSD case managers.
March referenced the Regulatory Impact Statement for the Bill outlining the changes and the potential for hardship to increase, saying the Minister's heart was "rotten to the core" for going ahead with the changes.
"She knows benefit sanctions do not work.
"She has been told by her own officials that things like compulsory money management can risk increasing hardship, has been told by beneficiaries that these kind of policies don't work, and she does not care."
Upston said in response she did care for people, their futures and their opportunities.
"I'm very committed to ensuring more New Zealanders are in work than on welfare. And I care deeply.
"I don't want to see people trapped on welfare. I want to see them and their families get ahead. And that is because I care."
In regards to the Community Work Experience sanction, Menendez March said community organisations did not support it. He said being subjected to these sanctions put people under more stress and made it harder for people to enter into employment.
"This just shows that sanctions like community work experience are all about cruelty and stamping down on the poor, rather than supporting people into employment."
Labour leader Chris Hipkins also criticised the move, saying it was "mean and petty" to impose sanctions on people in order to try and get them into jobs that "don't actually exist".
"Actually, they [the government] should be focused on creating jobs, rather than punishing people for not taking jobs that aren't there."
He said things were "getting harder under this government," pointing to the Treasury forecasted unemployment getting higher.
ACT leader David Seymour, whose party campaigned on the policy, said the benefit is "there for bad times, not for a long time," and if someone wants the freedom to spend cash "get a job like the other five out of six working age New Zealanders".
Seymour said he was proud to see his party's policies reflected in the government's agenda, showing if you "campaign hard" and release ideas and policy throughout opposition "you really can make a difference".
Seymour said no country can succeed with one in six working age people on a benefit, and ACT had long campaigned on giving "money in kind instead of cash".
"We've got to start introducing mutual obligation if you don't show up and actually look for work, we'll stop giving you cash, and we'll start giving you the things you need in kind on a plastic card.
"If it's not acceptable to stop the benefit altogether, then in kind payment is one way of sending the message: if you want the freedom to spend cash as if it's your own, then you should earn it yourself."
Seymour acknowledged there should always be support if someone is facing a challenging time, but he expected people to "meet the taxpayer who's paying for all this halfway".
Also from today, some people and their partners will have to have a completed Jobseeker Profile before their benefit can be granted, and an obligation "failure" will now count against a person for two years rather than one.
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RNZ News
3 days ago
- RNZ News
Labour buoyed by latest showing in RNZ / Reid Research poll
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It would have a total of 57 seats which is below the threshold to govern. Labour gains two seats from RNZ's last poll and is predicted to have 42, according to these results. The Greens gain two to have 14 and Te Pāti Māori gains one to have seven seats. That's 63 seats compared to the coalition's 57. Hipkins said it was "an encouraging poll result" and it showed people were disappointed with the government and the Budget. "I don't think anybody expected them to be cutting pay equity in order to make the Budget balance so I think people are expressing some dissatisfaction with that. "We've still got 18 months to go and we know in the Labour party we're going to have to work hard in that time," he told Morning Report. All of the polls were showing that Labour was rebuilding support since the last general election and it was making good progress. 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Te Pāti Māori's co-leader Rawiri Waititi said the poll numbers showed the party's policies and rhetoric around the government's actions were appealing to new supporters. "The kind of anti-Māori, anti-wāhine, anti-woman, anti-worker, anti-climate, anti-rainbow, anti-woke type agenda that this government is pushing at the moment also is not appealing to the people who are trying to find a place to put their political support and trying to support those who fiercely advocate for them." Explore the full results with RNZ's interactive charts .
NZ Herald
3 days ago
- NZ Herald
Inside Economics: Should you take New Zealand Superannuation if you don't need it ... plus, is the Reserve Bank's focus too narrow?
This hit home for me since it's a bit of a bone of contention in our family. I'm a Gen X-er and my Baby Boomer parents both get the pension despite owning assets worth millions. It's not a case of the family home skyrocketing in value – they both own very large, very expensive properties (separately; they're divorced), nice vehicles and live very comfortable lives. I'm really happy they're healthy and enjoying life, but I – and my siblings – think it's a bit gross that they draw the pension when they very obviously don't need it. My Dad's a bit embarrassed about it, but says he's asset-rich but cash-poor. My Mum gets defensive and says she's worked all her life and deserves it. Both my parents are smart and socially aware, so I'm surprised by their stance. My question is: how many retirees actually choose not to take NZ Super? Is there a mechanism to opt out? – Name withheld A: Fascinating question, thanks. I was curious about the numbers too and asked at the Ministry of Social Development (which administers New Zealand's pension scheme). There is no specific mechanism to opt out. But the way the scheme works is that you have to sign up (or opt in) when you turn 65. So, essentially, if you don't need the money, you can just do nothing, and you won't get it. I'm also told you that when you do apply, the registration process does point you to various charities you can donate it to if you think you don't need the money. is one such charity organisation purpose-built for the task. The Ministry of Social Development didn't have any numbers to hand as to how many Kiwis over 65 haven't signed up even though they are eligible. So I've put in an Official Information Act request and hopefully someone in the system will dig that out (watch this space). Benefit or right? The bigger question is the one you implicitly raise with your parents: should people take the super payment if they don't really need it? Framed in even more basic terms: is the super payment a benefit or a right? Everyone who is eligible does have the right to claim it. But the money is also part of the consolidated pool of Government revenue. It isn't held in a special fund, like the New Zealand Superannuation Fund (the Crown investment fund with the annoyingly similar name). That fund will be used eventually to help fund the cost of NZ Super as it balloons, based on the ageing population. NZ Super is also very different to KiwiSaver, which is actually your money that you have worked for over the years. Ultimately, the existence of the state pension (and how generous or universal it is) remains at the mercy of Parliament. It is a benefit, but for many Kiwis, especially those of a certain generation, it feels like a right. It has been promised to us by politicians over the years. That's one of the reasons even changing the age limit or means-testing it has been seen as a political no-go zone. But that seems to be changing as the sheer weight of the cost to the economy becomes apparent. According to Budget 2025 data, NZ Super costs $4352 per person per year, making it the third-largest area of government spending after welfare ($6181 per person) and health ($5804 per person). From the Treasury's long-term fiscal projections, spending on NZ Super is projected to grow from 4.3% of GDP in 2010 to 7.9% in 2060, an increase of 3.6 percentage points. National under Sir Bill English first proposed lifting the age to 67 in the election campaign of 2017. And National campaigned on a similar platform in 2023 with a commitment to keep the age at 65 until 2044, when it will be gradually lifted to 67. This change wouldn't affect anyone born before 1979. Finance Minister Nicola Willis has suggested National will campaign on a similar policy again in 2026. In my view, it will inevitably have to rise. I also understand why people are inclined to accept it as a right. It is free money, right? It will eventually pass through the generations. Perhaps those who want to enjoy the extra cash but feel some guilt could look to spend it with local businesses or support local artists. Does the Reserve Bank need a wider focus? Q: Kia ora Liam, I was reading your column on the future of the Reserve Bank under a new governor. I wonder how the bank can set its policy direction without a clear national economic strategy to work within. New Zealand doesn't seem to have one that I could clearly identify, the closest being the Reserve Bank's inflation target and that's about it. Is this because the nation is happy to muddle along on the global currents of laissez-faire economics instead? After watching a documentary recently on Xi Jinping and his 'China Dream' policy that has seen China become a global economic force, I found myself asking: where is the (suitably less authoritarian) New Zealand equivalent that I think we actually need? A more orderly economy could be highly beneficial in underpinning the woeful state of our physical and social infrastructure, but only if the politicians involved were actually competent enough to plan and execute successfully over multiple decades. Which begs another question: we had decades of stable government in the 20th century that built all the infrastructure, which we have failed to keep updating. If it could be done then, why can't it be done now? Regards, Steve-Tipene Callagher A: Some really interesting thoughts there, Steve. I agree that a more structured and orderly economic approach would benefit New Zealand. But I'll start with your point about the Reserve Bank (RBNZ) and try to explain why it has such a limited scope. The main reason that the central bank primarily targets inflation is that it is the one thing that monetary policy has some real control over. US economist Milton Friedman once said: 'Inflation is always and everywhere a monetary phenomenon.' What he meant was that at some point, we can always trace inflation back to the supply of money in an economy. If we create too much money (unbacked by an increase in real physical wealth), then we always get inflation. By moving the cost of borrowing (and saving) up and down, central banks can control the money supply. When interest rates are low, there is less incentive to save and more incentive to borrow and spend, so the money supply expands. When interest rates are high, there is more incentive to save and it is harder to borrow, so the supply contracts. This has proved to be very effective at controlling inflation over the years. But even the world's top central bankers will admit that monetary policy isn't particularly effective at controlling more nuanced aspects of the economy. It is often described as a 'blunt tool'. Unemployment is sometimes included in central bank mandates because there is seen to be a correlation between unemployment and inflation. But even that is debatable and we've seen the new Government reverse Labour's policy, which had added unemployment to the mandate. The argument is that keeping inflation stable is such an important platform for an economy that central banks should do that one thing and do it well. The rest of the economic equation is left to the Government and/or markets to sort out. I don't want to completely dismiss any criticism of the monetarist approach to central banking. There are alternative ideas out there, like Modern Monetary Theory. I'm not going to do it justice here, but it effectively argues that Governments should focus on real resource constraints rather than financial constraints. It says Governments aren't the same as businesses or households and they can print money and ignore deficits and get away with it. Perhaps it might work in a world where it was universally adopted and well-regulated by efficient Governments around the world. It requires more trust in efficient Government than I have. Regardless, the current system is so deeply embedded in the global economy that even US Presidents are wary of messing with it. So we're kind of stuck with it. I wouldn't like New Zealand's chances of going it alone with a new system. More structure Ultimately, when it comes to the lack of coherent strategy in New Zealand's economic approach, I think a lot of it has to do with the inability of the two major parties to find a bipartisan agreement on big areas like infrastructure. So I agree that it is frustrating, given that we built so much amazing infrastructure in the 20th century, that we seem so bad at it now. Quite why is hard to say. Perhaps it is MMP? There is a lot more trading-off of policy than there used to be under First Past the Post. It also seems to take much longer to get construction started on things, which means we often see Governments change before plans come to fruition. Perhaps we need longer political terms. Or perhaps we just need to streamline the process to get construction under way sooner. I know I'm not alone in wishing we could get some sort of bipartisan accord done on a long-term infrastructure pipeline. Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003. To sign up to my weekly newsletter, click on your user profile at and select 'My newsletters'. For a step-by-step guide, click here. If you have a burning question about the quirks or intricacies of economics send it to or leave a message in the comments section.
RNZ News
3 days ago
- RNZ News
Left bloc would have enough support to turf coalition government out of power
The preferred prime minister and leadership ratings are bad news for the government, with the exception of Winston Peters who has seen his highest result since 2017. Photo: RNZ After the Budget and pay equity changes the left bloc would have the support to turf the coalition out of power, the latest RNZ-Reid Research poll shows. The preferred prime minister and leadership ratings are also bad news for the government , with the exception of Winston Peters who has seen his highest result since 2017 - and ratings of the government's general performance have also continued to slide. With Labour, the Greens and Te Pāti Māori all gaining compared to the previous poll taken in March, they would have a majority with 63 seats between them, compared to the coalition's 57 - again, New Zealand First was the only coalition party to see a boost. The poll was taken in the seven days following the release of the Budget and in the wake of the $12.8 billion pay equity changes - which RNZ's polling also shows attracting more opposition than support . National continued a downward trend from the March survey, dropping 2.2 percentage points to 30.7 percent of the party vote - and overtaken by Labour, which gained 0.9 percentage points to 33.2 percent. The Greens' 1.6 percent increase brings them back to their election-night result of 11.6 percent, while Te Pāti Māori's 0.5 percentage point boost lifts them clear of the 5 percent threshold and - presuming they held all Māori seats - nets them a list MP. ACT dropped 2.8 points to 6.6 percent - the largest shift in party polling - while New Zealand First gained 1.9 points to 9.1 percent, upending the trend facing their coalition partners. Undecided or non-voters made up 6.5 percent of those polled - up from 6.1 in the previous poll . For parties outside Parliament, TOP (The Opportunities Party) gained 0.4 points to 2.2 percent, New Conservatives fell 0.3 points to 0.8, and all others combined were at 0.3 points, a 0.1 point increase on the last survey. More New Zealanders polled say the country is going in the wrong direction (46.6 percent) than in the right direction (37.8 percent), giving a net negative result of -8.8, a substantial decrease on March's 2.9 result. Little surprise then to see National leader Christopher Luxon's net favourability ratings drop further into the negative, from -3.9 percent in March to -9.8 percent, with significantly more respondents (45.5 percent) saying he performed poorly or very poorly, than said he performed well or very well (35.7 percent). That compared to Labour's Chris Hipkins on net 5.1 percent rating (34 percent negative, 39.1 percent positive) - though Hipkins also saw a steeper fall of 7.1 percentage points. The survey shows New Zealanders' preferred prime minister as Labour's Chris Hipkins (23.2 percent, up 2.3), taking the lead over National's Christopher Luxon (18.8 percent, down 3.1). NZ First leader Winston Peters at 8.9 percent (up 1 point) recorded his highest result since 2017. Chlöe Swarbrick in fourth was at 6.9 percent (up 0.8) - a personal best and just ahead of ACT's David Seymour on 6.4 percent (down 0.4). The next highest ratings were former PM Jacinda Ardern (3.7 percent, up 0.1), Te Pāti Māori MP Hana-Rawhiti Maipi-Clarke (1.7 percent, up 0.5), Finance Minister Nicola Willis (1.1, up 0.3) and Education/Immigration Minister Erica Stanford making her first appearance at 1 percent. Luxon simply rejected the poll results. "Look, I mean, I don't recognise the numbers. There's lots of different polls and frankly I'm just not going to comment or focus on the polls. Frankly what we're focused on is we were elected in '23 and people get to decide again in 2026. "We've done a good job, and that's why we've got to focus on the economy, law and order, and health and education." He said New Zealanders had "responded really positively" to the government's Budget, and saw the economy turning a corner. "There's a sense of optimism that, you know, we actually have had to manage some very difficult things economically to get our books back in order. But we're doing that job, and it's all about growth, growth, growth." Christopher Luxon (L) with David Seymour last week, after the ACT leader was sworn in as deputy prime minister. Photo: NZME/Dean Purcell Seymour said the numbers would continue to "bounce around" but it was still a tough time for New Zealanders - and the numbers were not a reflection on the Budget. "Different voters will have different reasons for their choices ... so long as people are voting for the economy, it's going to be tough for parties that are tied closely to economic management," he said. It was possible the pay equity changes were changing some voters' minds, he said, "but I also think doing what is right is what is politically popular in the long term, and even if I'm wrong about that, good policy is worth it anyway". "The fact that ACT is close to where it was on election night 18 months into a government with 18 months to go is a good foundation. We have to prove ourselves on election night, and we've got lots of time to do that." Peters refused to comment on whether his coalition partners were suffering from the handling of the pay equity changes. The next 18 months leading up to the election would show the "critical need for stability", he said, and having ruled out working with Chris Hipkins he was "comfortable and confident in our prospects" because the Greens and Te Pāti Māori in government would be "a nightmare". New Zealand First leader Winston Peters and finance minister Nicola Willis. Photo: RNZ / Samuel Rillstone The 80-year-old Peters said economies internationally were in trouble as a result of "unprecedented times for the last, say, 80 years", and the party was looking at New Zealand's fundamentals: asset values, and the need to increase wages and decrease business tax. "We're out there to ensure over the next few months that we can show enough improvement in the economy from what we're doing to make the prospects of an improved tomorrow possible." Hipkins was also not counting his electoral chickens, but was happy to point out the effect of the Budget, saying New Zealanders were "disillusioned" with the government overall. "New Zealanders can increasingly see that this government is taking the country backwards," he said. "I don't think anyone expected the government to cancel pay equity as a way of balancing its books. Nicola Willis and Christopher Luxon told New Zealanders before the election that they knew their numbers, that everything all added up. It's clear that their numbers didn't add up." He said he did not pay much attention to small shifts from the minor parties or his personal ratings in the polls. "It's nice to be popular, but I'm really focused on making sure I win as many votes as possible for Labour at the next election." Labour leader Chris Hipkins. Photo: RNZ / Samuel Rillstone Swarbrick said New Zealanders wanted a sense of hope. "Things are feeling pretty bloody bleak. You know, we've got 191 New Zealanders leaving every single day, three quarters of them between the ages of 18 to 45, it's not a recipe for a flourishing country. "We had dozens and dozens of folks turn out to talk to us about our Green budget and the sense of hope that they feel that they need - the kind of building blocks that we can have for a fairer society." She said polls did not mean the writing was on the wall, but she was hearing from people that they were exhausted and fatigued - something she suggested was a deliberate strategy from the coalition. Te Pāti Māori's co-leader Rawiri Waititi said the poll numbers showed the party's policies and rhetoric around the government's actions were appealing to new supporters. "The kind of anti-Māori, anti-wāhine, anti-woman, anti-worker, anti-climate, anti-rainbow, anti-woke type agenda that this government is pushing at the moment also is not appealing to the people who are trying to find a place to put their political support and trying to support those who fiercely advocate for them." He said their internal polling showed even higher support for the party and its style of politics - but the decreased support for ACT and increase for NZ First was a zero-sum game. "You've got a hard-right type voter ... I think they think that National is a little bit weak, which I agree [with] because they're allowing ACT to kind of run the show ... they will use Te Pāti Māori as their political football to kick us in the guts the hardest to garner the support of their voters, but at the end of the day the enemy for ACT is New Zealand First, and the enemy for New Zealand First is ACT." Explore the full results with RNZ's interactive charts . This poll of 1008 people was conducted by Reid Research, using quota sampling and weighting to ensure representative cross section by age, gender and geography. The poll was conducted through online interviews between 23-30 May 2025 and has a maximum margin of error of +/- 3.1 percent at a 95 percent confidence level. The report is availabe here . Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
