LINDSAY MITCHELL: Means-testing Jobseeker Benefits for 18-19 year-olds. What Does it Amount to?
- Administrator
- May 22
- 2 min read
As part of today's budget the Minister for Social Development announced:
"Parents rather than the state will be responsible for unemployed 18- and 19-year-olds who cannot support themselves under planned benefit changes announced in today’s Budget... That’s why from July 2027, eligibility for Jobseeker Support and the Emergency Benefit will be tightened for single unemployed 18- and 19-year-olds by introducing a parental assistance test."
At March 2025 there were 46,383 18-24 year-olds on a Jobseeker benefit.
So on matchbox calculations (necessary because the government hasn't provided numbers) 13,000 might be aged 18-19, costing around $240 million annually.
According to MSD, projected savings from the budget announcement are "$163.7 million over 4 years." Or just over $40 million annually or 17% of the total.
Safe to say, only one in six Jobseeker beneficiaries will meet the parental means test.
That's because ...
Most 18-19 year-olds who go on the dole came out of benefit-dependent households. Their parent(s) won't be able to support them.
Here is some inter-generational evidence from New Zealand's benefit system:
For Youth benefit clients as at 30 June 2014:
§ 88% (9 in 10) were from beneficiary families, the majority of whom received a main benefit for most of their teen years.
§ 51% were in beneficiary families for 80% or more of their teen years.The correlation is striking enough to believe that early entry may be a proxy for intergenerational benefit receipt (with the notable exception of teen-aged SLP [Supported Living Payment/Invalid] entrants).
Additionally, on NewstalkZB this afternoon Heather du Plessis-Allan suggested that loopholes will be found. For instance, singles will shack up because the new rule doesn't apply to those in de facto relationships. I would add that an unemployed single female aged 18-19 might also decide to become a parent in order to qualify for welfare. Well-intentioned policies are frequently beaten by the introduction of bad incentives and their outcomes.
Back to the budget imperative. On the whole, in terms of savings, it's very small beer.
When is the government going to look at time-limiting welfare assistance? Average expected future time on a main benefit right now for under 25 year-olds is 21.3 years
The savings from making welfare strictly temporary for those actually able to look after themselves would be massive. What is the government scared of?
Lindsay Mitchell blogs here
Comment on this article at https://x.com/BrashHide539
I have two teenage children, on very opposite ends of the spectrum.
Let me explain.
My son left school at 16, with only level one which he barely achieved without my help. However the drain laying and well drilling firm he part timed at since the age of 11 took him in, and provided a training program which he jumped at and has since started a proper apprenticeship. I'm very proud of him, and he's making blimmin good money for an eighteen year old. They took him in because he had the work ethic they were after.
My wee girl?
That's something as a single father an issue I'm not sure I can handle any longer without outside help. Because…
For every 5 years of full time work completed, 6 months of benefit able to be claimed. I don't think this is going far enough but it would be a start.
On the Work and Income web site there are 77 benefits available to New Zealanders.. yep seventy seven. Successive governments have poured (for want of a better word) tax revenue into some really meaningless programs, and it isn’t easing up. Offer more to recipients.. no problem. Raise taxes to pay for it.. hell no. Increase borrowing to cover the cost.. he’ll yes. Past, and certainly one third of this current government think we’re blind to this slight of hand. When Labour rolled National/Muldoon we were in the midst of a financial crisis.. we have a greater debt to GDP ratio now than existed then and heads are buried in the sand. We need to see a drastic decrease in tax…
next election is in 2026.
this announcement will only hand the votes of all these dole / welfare recipients to the labour, green and tpm coalition who, collectively, will promise to reverse this. many in that 'socio-economic' segment will then get out of bed / off the couch to cast their vote.
so, in all, not a bright move. better would have been to set limits on welfare and, i believe, get these able bodies to do community work (like: cleaning the beaches, road side (some people believe their car window gives access to a rubbish bin!), streets, etc.
The intergenerational cycle must be broken.