Social Security Amendment Bill Passes Into Law
The Social Security Amendment Bill has passed its third reading in Parliament today expanding the welfare Traffic Light System that launched in August 2024.
'This bill brings new tools to ensure beneficiaries stay on track with their obligations to find or prepare for work if they are able', Social Development and Employment Minister Louise Upston.
From 26 May 2025, two new non-financial sanctions can be imposed. Rather than reducing a benefit, these non-financial sanctions are:
Money Management – where half of someone's benefit is put onto an MSD payment card that can only be used in approved shops to buy essential items, such as groceries, transport, healthcare-related items, and education-related items. This will be for a four-week period.
Community Work Experience – where someone will have up to two weeks to find suitable work experience and is required to participate in a placement at one or more community or voluntary organisations for at least five hours per week for four weeks.
From 20 October, two more non-financial sanctions will be implemented:
Upskilling – Jobseekers will be required to attend and participate, to MSD's satisfaction, in one or more employment-related training courses or programmes for a minimum of five hours per week over a four-week period.
Report Job Search – Jobseekers must undertake at least three job-search activities per week, to MSD's satisfaction, and report on them weekly over a four-week period.
Also from 26 May 2025 new policy settings will be put in place:
Applicants for certain benefits, and their partners if relevant, will be required to have a completed Jobseeker Profile before they can be granted a benefit.
New obligation failures will carry over for two years rather than one, increasing the likelihood that those who repeatedly refuse to comply with their obligations will have their benefit cancelled if they remain on it for more than a year.
From 1 July 2025, Jobseeker Support clients must reapply for their benefit every 26-weeks (currently 52-weeks). This will require clients to engage with MSD more frequently, allowing for more proactive support and a focus on moving people into employment where they can.
'These changes will support more people into work and help achieve the Government's target of having 50,000 fewer people on Jobseeker Support by 2030, which is forecast to save the country over two billion dollars in welfare payments,' Louise Upston says.
'Because we believe having a job is the best way for people to lift themselves and their families out of hardship, the Government is setting a clear expectation that those who can work, should work.
'Our economy is stronger when more people are in work, and as we look to unleash economic growth, it's important that as many Kiwis as possible share in the benefits of work.'
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