Two new sanctions come into effect today aimed at increasing accountability in New Zealand’s welfare system.

Social Development and Employment Minister Louise Upston says the new measures, Money Management and Community Work Experience, now apply after a first failure to meet agreed obligations while receiving a main benefit such as Jobseeker Support.

Under the Money Management sanction, half of a person’s main benefit may be redirected to a payment card for four weeks if they fail to meet their obligations. The card can only be used at approved retailers for essential items such as groceries, transport, health and education-related goods.

People affected continue receiving the remainder of their benefit, along with any additional support such as accommodation supplements, directly into their bank account.

The Community Work Experience sanction requires those with work obligations who do not comply to take part in at least five hours of community work each week for four weeks at a voluntary or community organisation.

Upston says the new sanctions are part of the second phase of the Government’s Traffic Light System, introduced last year to help beneficiaries understand and meet their obligations.

“These very fair and reasonable sanctions allow clients to continue receiving their full benefit, instead of facing a 50 percent reduction under traditional financial penalties,” she says.

Additional changes from today include a new requirement for some applicants and their partners to complete a Jobseeker Profile before their benefit is granted. The period during which an obligation failure is held against a recipient also extends from one year to two.

Upston says about 98 percent of beneficiaries already meet their obligations, but the updated system introduces clearer consequences for those who do not.

“Reducing benefits is not the answer for everyone. These new tools support people to stay on track and help meet our Government’s goal of reducing the number of people on Jobseeker Support by 50,000 by 2030.”

She thanks Ministry of Social Development staff for their work in implementing the changes.

Two more non-financial sanctions, Report Job Search and Upskilling, are scheduled to be introduced in October for some beneficiaries.

The Ministry says these non-financial sanctions apply only to clients with dependent children or those in active case management. Each case is assessed to ensure the most appropriate response is used based on individual circumstances.