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New Zealand’s Jobseeker Changes Raise Concerns for Young Adults

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The New Zealand government is set to tighten eligibility requirements for young people seeking Jobseeker benefits, a move that has sparked significant debate. Starting in December 2024, if parents’ combined earnings exceed NZ$65,529, their unemployed 18- or 19-year-old children will no longer qualify for assistance. Social Development Minister Louise Upston emphasized that the expectation is for these young individuals to pursue education, training, or employment, stating, “welfare should be a long way away from their first option.”

The details of this policy raise concerns about its potential impacts, particularly on vulnerable households. Without a regulatory impact statement from the Ministry of Social Development, it remains unclear what the government anticipates will be saved from this change. Previous statements suggest risks associated with such policies, indicating that marginalized communities, including Māori and Pacific peoples, may be disproportionately affected.

The income threshold for eligibility has raised eyebrows, with critics arguing it is unrealistic. For example, a single teenager living at home whose parents earn just $1 over the threshold will lose access to $268.13 in weekly support. This scenario becomes particularly alarming for low-income families, where any financial assistance is crucial for basic needs.

In one hypothetical situation, a single mother earning $75,000 annually faces significant financial penalties for earning more. With her unemployed 18-year-old son now ineligible for up to $14,000 of Jobseeker support, the mother may find it more beneficial to reduce her work hours to ensure her son qualifies for assistance, undermining the very goal of encouraging employment.

The complexity of managing parental income tests adds another layer of difficulty. Questions arise regarding how the policy will treat families with separated parents or cases where one parent is unwilling to disclose income. Such factors raise concerns about the fairness and practicality of the new regulations.

Politically, the timing of this policy implementation coincides with the next election, leading to criticism from opposition parties. The Labour Party has expressed disapproval of the proposal but has not committed to repealing it. The timing raises questions about the government’s true intentions and the potential consequences of this approach.

The overarching concern is that the policy may discourage families from seeking employment, contradicting the government’s stated aim of motivating young individuals to enter the workforce. As of June 2023, over 15,000 18- and 19-year-olds were receiving Jobseeker support, with approximately 4,300 expected to become ineligible under the new rules. With a youth unemployment rate of 12.2%, the challenges facing young people are substantial, particularly in a competitive job market.

In this challenging economic climate, treating young adults as dependent children could hinder their development and prospects. Experts argue for investment in youth, promoting mentorship and pathways to meaningful employment instead of imposing restrictive measures that may trap them in a cycle of dependency.

Susan St John, affiliated with the Pensions and Intergenerational Hub of the Economic Policy Centre at the Auckland Business School, underscores the need for a more supportive approach. In the face of rising living costs and economic uncertainty, investing in the future of young New Zealanders is essential for fostering a resilient and capable workforce.

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