Monday, April 19, 2010

Unemployment insurance shouldn't be the priority

Revisiting an announcement from the Welfare Working Group Chair, Paula Rebstock last week, who said;

Ms Rebstock told Radio New Zealand that the employment insurance will be looked at by the Working Group.

"Right now, if you are in a relationship with someone and you become unemployed, the chances are you would not be entitled to a social welfare benefit.

"But if you are involved in an insurance scheme and you have contributed, then you would also be in receipt of an unemployment benefit for a period," Ms Rebstock told Radio New Zealand.

She said the system could be similar to Canada's Employment Insurance scheme.

"It is clearly within the terms of reference of the group," Ms Rebstock said.

When the Welfare Working Group was first announced the Minister was quite clear their job was to look at ways of reducing dependency and breaking the cycle. Most recently, “The Welfare Working Group will examine long term welfare dependence, identifying causes and solutions.”

Over recent years the unemployment benefit has not been a significant contributor to long term welfare dependence. Currently 84 percent have been on it for less than a year (at least in that current continuous spell). The numbers dropped to 22,748 (based on December quarter figures) at one point. Now they are back up to 60,00 due to the recession. Obviously the UB is very sensitive to the labour market. But generally when there is work the Unemployment Benefit numbers fall substantially. Not so for other benefits.

So it was interesting that Rebstock chose looking at unemployment insurance as her initial announcement. I am not against looking at unemployment insurance at all but it shouldn't be a priority. And while Rebstock says, "It is clearly within the terms of reference of the group" other benefits - the DPB and Invalid benefits in particular - are more in need of attention.

I sincerely hope that the 'hard stuff' will not be neglected.

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