The government was warned of employment-based sanctions, documents show

The coalition government was warned that work-for-benefit schemes do not increase the likelihood of people coming off welfare and into work, documents show.

The cabinet has approved the introduction of one series of new obligations and sanctionsincluding community work experience (CWE), for job seekers next year.

Official advice obtained by the Greens under the Official Information Act shows that the Ministry of Social Development warned against CWE in May.

“As described, CWE is essentially a work program if it were made mandatory,” the departmental report said.

“The majority of evidence shows that work-for-benefit programs do not increase the likelihood that participants will leave benefits and enter work.

“Instead, participants remain on benefits longer than they would otherwise (the so-called lock-in effect). Investments in other employment supports may be more cost-effective.”

The ministry said evidence shows that CWE worked best for people with limited work experience or willingness, and that it was already offered on an opt-in basis in some regions for customers who met eligibility criteria.

“Staff also exercise discretion over which clients they recommend to these supports, especially in cases where funding is limited.

“Some programs also have low adoption rates and/or limited funding, with some regions choosing not to offer these programs and low awareness among frontline staff.”

The ministry said it could take steps to “increase the likelihood of effectiveness” by using discretion and eligibility criteria for clients, limiting placement duration and hours and requiring proof of job search during participation.

“As the evidence indicates, the success of CWE depends on its discretionary application to those who would benefit most from it.”

The ministry also warned that it would have to create a new program, or significantly change an existing one, to implement mandatory CWE.

“This would take time and resources to process the operational considerations and risks, potentially diverting attention from other aspects of the traffic signal system.

“As a result, you may want to prioritize other results from CWE.”

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

“(Minister of Social Development and Employment) Louise Upston’s complete disregard for evidence only shows that she is not actually interested in improving employment outcomes and that she only wants to continue pressuring beneficiaries with repeated policies from the 1990s that did not support people in employment or to achieve their ambitions.”

He said the coalition should keep community work experience as an opt-in model, rather than a penalty, to help people move from benefits into work.

“Louise has played a big game in preventing people from receiving benefits for long periods of time, and yet her own advice shows that work-for-benefit schemes that are made mandatory can achieve exactly the opposite of what she is trying to achieve, said Menéndez March.

Commenting to RNZ, Upston said the government was focused on reducing dependency on welfare, which had worsened since National was last in power.

“Community work experience will be another tool at MSD to keep job seekers on the path to employment when they have not met their obligations to prepare for or find employment.

“We will design our own form of community work experience that works for our welfare system. The experience will build the skills and confidence job seekers need to help them find future employment.”

Upston said it was possible to mitigate the negative effects of CWE so that people could gain community connections and experience while focusing on finding gainful employment.

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

“Those required to do community work under our system are expected to continue looking for work while carrying out the sanction. The hours of community work they are required to do will be set at a level that allows this.”

The Ministry of Social Development is expected to introduce new sanctions by July 2025, with the legislation due to be submitted to the House of Representatives before the end of the year.

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