Election 2020: Labor Unveils Billion Dollar Plan for Welfare System

Labor has unveiled its billion-dollar social development policy, which would allow people who receive a benefit who work part-time to earn more and reinforce the flexible salary scheme.

If re-elected, he would also reinstate an allowance for single-parent beneficiaries who go to college more than 10 years after removal.

The policy was launched by Social Development Minister Carmel Sepuloni, who said “investing in our people is a key part of Labor’s five-point economic plan.”

“Covid-19 will have a significant impact on income and employment, which is why Labor is focused on improving New Zealanders’ access to training, creating a more highly-skilled workforce, and ensuring that those who receive benefits can keep more. of what they earn. “

The cost package is over $ 1 billion.

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Training incentive grant

If re-elected, Sepuloni said she would expand the Training Incentive Grant so that single parents could study further training courses. The expansion would also provide up to $ 4,515 per year to help with the additional costs.

It would also be available to disabled people and caregivers who are receiving a primary benefit. The expansion would cost $ 431 million in four years and $ 187 million in 10 years.

The TIA would be a weekly payment up to a maximum of $ 112.89 and a total maximum of $ 4515.60 per year and could be used in conjunction with a student loan and child care assistance.

Labor estimates that acceptance of the assignment would rise from about 900 people in 2018 to 6,000 in its first year before increasing to 15,000 people thereafter.

The allocation is expected to cost $ 431 million over four years and $ 187 million over the next decade, paid for by the Covid-19 Response and Recovery Fund.

Sepuloni said the assignment would create a more highly skilled workforce and allowing single parents and people with disabilities to improve their qualifications would help them find meaningful and sustainable work with higher earning potential.

“As we rebuild after Covid-19, we also need a skilled and future-ready workforce. This initiative will allow more people to develop their skills and obtain qualifications, and create a more highly skilled workforce in New Zealand.”

Currently, TIA covers fees, course costs, child and senior care costs, and course equipment and materials for people taking courses at the high school level.

The subsidy for single parents in college was cut in 2009 by the previous national government.

Sepuloni said that while she was studying as a single mother, TIA supported her for a short time.

“It made a big difference to have that little extra financial support when I was trying to get ahead and build a future for my family.

“National took away access to support for higher level courses under the TIA, even though Responsible Minister Paula Bennett benefited from this support. Labor is putting the ladder of support back in place after National withdrew them. “

Reduction threshold

Sepuloni said Labor would also raise the reduction threshold so that people with a primary benefit who work part-time can earn more before their income support is reduced.

As wages have risen, the number of hours someone can work before their benefit begins to decline has dropped significantly over time, he said.

Currently, if someone is receiving the Job Search Support unemployment benefit and earns more than $ 90 per week, they will lose 70 cents of their benefit for every $ 1 they earn. For example:

• A single person in the Job Search Support program would have $ 21 deducted from their primary benefit if they earn $ 120 per week (before taxes).

Labor promises to raise the reduction threshold so that all beneficiaries of a benefit can earn $ 160 per week before their benefit is reduced, around eight hours of minimum wage, which could mean an additional $ 3,000 for some people every year.

It would also raise the second threshold for those receiving single parent support and supported living pay to $ 250 per week.

“This will help women and people with health problems or disabilities to maintain a link to the labor market and allow them to better manage the costs of work, such as transportation, childcare, etc.,” he said.

The Labor Party said raising the cut-off threshold would remove the financial disincentive to take more work hours and “put more money in the pockets of low-income New Zealand.”

“Particularly in a Covid environment where the job market can be more competitive, part-time work can provide an opportunity to gain work experience and to reconnect with the job market and the demands that may arise with employment.”

Labor said the estimated cost was up to $ 320 million over four years and is likely to benefit 30,000 people immediately. The additional costs of the year-on-year increases were in line with the minimum wage already committed in Budget 19, he said.

Review the wellness system

Additionally, Labor said its medium-term plan for the ongoing review of the wellness system would include:

• Readjust the foundations of the welfare system.
• Increase income support and address debt.
• Strengthen and expand employment services.
• Improve supports and services for people with disabilities, people with health problems and their caregivers.
• Build alliances and improve the community sector.

Longer term, Labor said that:

• Simplify the income support system.
& bull Align the wellness system with other support systems.
• Review housing and childcare supports.

Flexible salary extension

And the final part of its social development package is expanding the flexible salary program, which helps employers hire people who are at risk of long-term unemployment and who receive a benefit.

Last year, 6,000 employers received a flexible salary subsidy for the person they hired at an average of $ 3,500 per candidate.

Direct financing for each placement is negotiable and varies by type of business or person employed up to a maximum of $ 22,000.

Labor will increase the average subsidy to $ 7,500 paid for underutilization of the Covid-19 Wage Subsidy Extension.

Labor said the increase would allow 40,000 more people to be in the program, by:

• Invest an additional $ 300 million to increase the average grant to $ 7,500 and allow up to 40,000 people to benefit from the program. The maximum grant will continue to be $ 22,000.

• Modify the scheme to provide greater flexibility to employers and employees.

& Bull Ring-fencing $ 30 million to help beneficiaries start a new business or help become self-sufficient in an existing business through the Flexible Salary Self-Employment Program.

• Provide $ 10 million in operating funds for the Ministry of Social Development to administer the expanded program. There is an additional million dollars for business scope to ensure companies can consider whether it is right for them.

This would cost $ 311 million, including an allocation of $ 10 million to administer the plan and an additional $ 1 million for corporate disclosure to insure the companies.

The opposition reacts

National’s social development spokesperson Louise Upston said investment is needed in job creation, not well-being.

“If Labor has a billion dollars to spare up its sleeve, and that’s a big yes, then that money should be spent on creating jobs rather than increasing profits,” Upston said.

“The work seems to be focused on keeping people healthy even though there are already opportunities for people to work.”

Upston said National’s policies gave companies the confidence to grow and create more jobs.

His JobStart policy would give a cash payment of $ 10,000 to companies that hire more staff, while his BusinessStart policy would support Kiwis who want to start new businesses.

Meanwhile, the Law’s leader, David Seymour, said raising the reduction threshold “would make it less likely that people would drop out of welfare and go into full-time work.”

“We need to break the cycle of dependency on well-being, not entrench it. It is harmful to the spirit and well-being of too many families.

“Electronic revenue management would ensure that people who abuse the system find that they are not given endless cash, but are carefully monitored and have controlled access to essentials that the taxpayer thought they were funding.”