Benefit sanctions are a crucial lever to deal with the persistent minority of people who opt to remain on a benefit long-term even when they are in a position to work.

Over 351,000 working-age New Zealanders were receiving a main benefit as of June 2023 – that’s more than one-in-ten working age New Zealanders And, pre-COVID, 71 percent of main benefit recipients had been on welfare continuously for more than a year.

Today the Minister sent an important signal that if you can work, you should work. And if you rort the system, there will be consequences.

Greater use of existing sanctions is a first step toward a wider package of more substantial consequences for healthy long-term beneficiaries who evade work. ACT’s coalition agreement secured the commitment to implement sanctions, including electronic money management, for beneficiaries who can work but refuse to take agreed steps to find a job.

Electronic Income Management has been successfully trialled in Australia. It issues an electronic card with tracked spending and restrictions on alcohol, gambling, and tobacco expenditure. Almost all of the benefit comes in this form, with a small amount left in discretionary cash. It has been shown to improve child well-being by reducing spending on harmful habits and increasing spending on children.

I’m proud of the work ACT is doing in coalition to tackle long-term reliance on welfare and its impact on the well-being and morale of so many New Zealanders and their children.

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