New Sanctions Drive Benefit Accountability

Scoop

26-05-2025

Press Release – New Zealand Government
Social Development and Employment Minister Louise Upston says the Money Management and Community Work Experience sanctions can apply to a first obligation failure while getting a main benefit, such as Jobseeker Support.
Hon Louise Upston
Minister for Social Development and Employment
From today, beneficiaries failing to meet the obligations they agreed to can expect two new measures to encourage people off welfare and into work.
Social Development and Employment Minister Louise Upston says the Money Management and Community Work Experience sanctions can apply to a first obligation failure while getting a main benefit, such as Jobseeker Support.
'From today, Money Management means people who don't comply may have half their main benefit put on a payment card for four weeks. This is a sensible move,' Louise Upston says.
'The card can only be used at approved shops for groceries, transport, health, and education-related items. People will continue to get the remainder of their main benefit, as well as any supplementary assistance (such as for ongoing accommodation costs), directly into their bank accounts.
'Community Work Experience means people with work obligations who don't comply may have to find and participate in at least five hours of community work experience per week at one or more community or voluntary sector organisations, for four weeks.
'Also from today, it's now mandatory for some people, and their partners, 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, instead of one.
'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,' Louise Upston says.
The introduction marks the launch of the second phase of the Traffic Light System. The first phase was launched last year to help clients better understand their obligations and what they need to do to stay on track.
'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.
'Around 98 per cent of beneficiaries are complying with their obligations – those who don't are the ones who need to consider the increased consequences.
'Overall, these changes will ensure we have a welfare system proactively supporting those who can work to get off the benefit and into employment. This will contribute to the Government's target to have 50,000 fewer people on Jobseeker Support by 2030,' Louise Upston says.
The Minister again recognised the efforts of frontline MSD staff working with job seekers.
'I thank MSD staff who have undergone training to support clients around the Traffic Light changes. We know the faster we can help beneficiaries find suitable employment, the better the outcomes for them, their families, our communities, and our economy.'
Two more non-financial sanctions, Report Job Search and Upskilling, will become available to some clients in October this year, further expanding the Traffic Light System.
Notes:
Non-financial sanctions will only be available to clients for a first obligation failure if they are in active case management or have dependent children. If they do not meet this criteria, they will have a financial sanction imposed as before.
These clients will also need to have an appointment with MSD within 5 working days and meet any other eligibility criteria.
MSD staff will consider a client's circumstances before imposing a non-financial sanction, to ensure it is the most appropriate option for the client.
Young people getting Youth Payment or Young Parent Payment will be assigned a Traffic Light colour, so they can easily see if they're on track with their obligations. No other Traffic Light System-related changes will apply to these clients or young partners with youth activity obligations.