Data from the Ministry of Social Development (MSD) reveals that the longest a person has been continuously receiving JobSeeker Work Ready benefits is over 40 years, with the record standing at 2291 weeks (nearly 44 years) as of February.
Impact of JobSeeker Benefits and Work Status
Graham Allpress, MSD’s general manager for client service delivery, explained that some individuals may have transitioned between different benefit types over time. These transitions could have involved periods where individuals were not required to be available for work.
The specifics depend on their individual circumstances and eligibility for various benefits during this extended period. Importantly, being on a benefit for such a long duration doesn’t necessarily mean the individual was never employed; they could have engaged in casual or part-time work alongside receiving the benefit.
Average Duration on JobSeeker Support
As of December 2024, the average duration on JobSeeker Support Work Ready was 116 weeks, while those on JobSeeker Support for health conditions or disabilities averaged 223 weeks.
In comparison, the figures for December 2016 stood at 123 weeks for Work Ready and 224 weeks for those with health-related issues.
Changing Trends in JobSeeker Support
Brad Olsen, CEO of Infometrics, pointed out that there had been a noticeable decline in the average length of time individuals received benefits, particularly around 2020 and in recent times.
This shift aligns with a growing number of people accessing JobSeeker support, coinciding with an increase in people undertaking studies or training, especially in a challenging job market.
Additionally, Olsen observed a rise in the number of people who cited sickness or injury as reasons for being off work, especially with the growing mental health challenges affecting many.
Challenges in Workforce Participation
The most significant change Olsen noted was the growing number of individuals not seeking work and not available for employment. For many, the situation is complicated by complex personal needs, making it harder to enter the workforce without adequate support.
Employer feedback across the country suggests that consistent attendance remains a significant challenge. Many employers report difficulties in finding candidates who can show up regularly and work a full week, which is essential for many businesses.
The Role of Structural Unemployment
ANZ senior economist Miles Workman discussed the “structural” unemployment rate, referring to individuals who have been out of work for over a year.
He noted that this number fluctuates over time, impacted by both economic downturns and policy changes. In the 1990s, structural unemployment was high due to major economic reforms and the global recession.
Ric’s Experience on JobSeeker Support
Ric, a Whangārei resident, shared his experience with JobSeeker Support. He and his partner began receiving benefits when Ric had to leave work to care for his sick father. His weekly payments ranged from $50 to $230, depending on his partner’s working hours.
Ric noted that while he was encouraged to transition off the benefit, he was required to attend monthly meetings to review available opportunities. He was also asked to prove his job search efforts to maintain eligibility.
His experience highlights the complexities of the benefit system, where income increases can sometimes result in less support, leading to individuals adjusting their work hours to maximize benefits.
Working for Families and the Impact of Income Increases
Ric discussed how an increase in his pay, which pushed him over a certain income threshold, resulted in a significant reduction in support.
When his family’s combined income surpassed a specific point, their Working for Families benefit was reduced, making it financially difficult for them.
In Ric’s case, he chose to reduce his working hours to stay under the threshold and qualify for more assistance.
The Challenge of Abatement Thresholds
Professor Susan St John from the University of Auckland highlighted Ric’s situation as being quite common. She criticized the abatement thresholds as being outdated, noting that they hadn’t been adjusted for inflation for many years.
The current Working for Families threshold starts to reduce benefits once a household earns over $160 a week, but if it were adjusted for inflation, this threshold would be closer to $60,000, rather than the current $42,700.
Economic Disincentives for Low-Income Earners
St John explained that for many people, particularly single parents, working additional hours might not result in significant financial gains.
For instance, people might lose part of their Working for Families support, face a 30% tax rate, or have to pay for student loans and ACC.
These multiple deductions create a “high effective marginal tax rate,” making additional earnings seem not worth the effort for many low-income households.
Key Points Summary
| Key Factor | Details |
|---|---|
| Longest JobSeeker Duration | 44 years (2291 weeks) |
| Average Duration on Benefit | 116 weeks (Work Ready), 223 weeks (Health/Disability) |
| Decrease in Average Benefit Duration | Notable decline since 2020 |
| Increasing Unemployment Reasons | Rise in sickness/injury and lack of available work |
| Impact of Increased Earnings | Higher pay could result in reduced benefits |
| Working for Families Adjustments | Thresholds too low, needs inflation adjustment |
The JobSeeker system has been in place for many years, but data highlights ongoing issues, such as long-term reliance on benefits and the challenges of moving off government assistance.
The system’s abatement thresholds and lack of adjustments for inflation contribute to economic disincentives for low-income earners, creating a complex situation for those trying to transition back into the workforce. It’s crucial that these issues be addressed to ensure a more effective and supportive system.
FAQs
How long has the longest JobSeeker recipient been on benefits?
The longest a person has been on JobSeeker Work Ready benefits is 44 years, or 2291 weeks, as of February.
What is the average duration someone stays on JobSeeker Work Ready benefits?
The average duration is 116 weeks as of December 2024.
How does an increase in income affect JobSeeker support?
As income rises, JobSeeker benefits may decrease due to abatement thresholds, creating disincentives for individuals to increase their earnings.
Why are abatement thresholds a problem?
The thresholds have not been adjusted for inflation, meaning people start losing benefits when they earn as little as $160 a week, which could be much higher with inflation adjustments.