Sanctions to beneficiaries raise concerns for children

Social Development Minister Lousie Upton last week announced that the National government would return to a stricter welfare regime including more rigorous use of sanctions, which critics have said will impact children and exacerbate child poverty.

Upton made the announcement alongside Prime Minister Christopher Luxon, who said he expects benefit sanctions to be fully enforced and promised more welfare reform. Upton announced that from June, MSD would be instructed to conduct more “check-ins” with job-seeker beneficiaries amounting to an extra 2500 meetings per month, and a “traffic-light” system was in development for beneficiaries.  

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For now, Upton said she expects “all obligations and sanctions applied. If job seekers fail to attend job interviews, to complete their pre-employment tasks, or to take work that is available, then there needs to be consequences.”  

Currently, these “consequences” or sanctions include reductions or even cancellations of benefits if job-seekers fail to meet their work or pre-employment obligations for either full- or part-time work. Parents are subject to different requirements depending on the age of their youngest child. If job-seekers fail to meet work or pre-work obligations three times in a 12-month period; or if they turn down a suitable job offer, beneficiaries can have their benefits cancelled for up to 13 weeks. For those with dependants, the maximum penalty is a 50 percent cut of their entitlement for up to 13 weeks.  

The policy’s critics have pointed to a lack of evidence showing that sanctions work for getting job-seekers into employment.  

In 2018, a paper prepared for the Welfare Expert Advisory Group concluded that “a very harsh sanctions regime can have important adverse effects that drive people away from, rather than closer to, employment, and might worsen rather than improve the long-term chances of children in the families affected.”  

In comparison, “studies of sanctioning regimes less severe than New Zealand’s current regime show effectiveness in increasing movement from benefits to work.”  

A more recent publication from the Beneficiary Advisory Service in 2021 wrote that participants and dependents who faced welfare sanctions often went without necessities like food, electricity and medication. Sanctioned beneficiaries reported using food banks and community pantries as well as stealing, foraging, begging and taking out loans.  

The paper suggests that “sanctions encourage ineffectual compliance rather than encourage positive job-seeking behaviour.”  

Previously, child poverty campaigners have spoken out about benefit sanctions.  

Susan St John, associate professor of economics at the University of Auckland, said that “sanctions will fall very heavily on sole parents whose very pressured lives, lack of transport, often coping with illness, teacher only days, floods, crises, lack of internet and phone access coupled with MSD’s unavailability, help explain why they may fail to fulfil these bureaucratically imposed requirements.”  

Critics of the policy include NZEI Te Riu Roa, which said “any sanctions a government takes against beneficiaries directly impacts their children and their learning.”  

President Mark Potter pointed to the cost-of-living and said “Children need a full stomach and a roof over their heads to learn”.  

Potter noted that there was a strong correlation between food security and learning, as highlighted by the recent PISA results. Additionally, “we know that food security disproportionately affects tamariki Māori, who make up nearly a quarter of the students currently enrolled in schooling. 

“This step undercuts [the] government’s commitment to ensuring every child experiences success in learning, because it will only increase the numbers of children living in poverty who will then struggle with learning.”