Source: Radio New Zealand
The government introduced a traffic light system in 2024 and expanded it last year. RNZ / Quin Tauetau
Just 21 people have received non-financial benefit sanctions since the new traffic light scheme took effect.
That is despite the government at the time describing them as a “very fair and reasonable” way for people to receive their full benefits even when they had not been meeting their obligations.
The government introduced a traffic light system in 2024 and expanded it last year, adding non-financial sanctions for beneficiaries who fell foul of the rules.
If beneficiaries do not meet their obligations without good reason, they are moved to “orange” in the system. If they do not then get back on track within five days, they are shifted to “red”, at which point their benefit can be stopped or reduced, or they can face non-financial sanctions.
Non-financial sanctions include such things as going on a course, keeping a record of job searches, having some of their benefit put on a payment card or being sent on community work experience.
At least ten thousand sanctions have been imposed in each quarter since the rule change was introduced.
But between 1 May 2025 and 31 January this year, just 21 non-financial were imposed.
Nine were people told to go on community work experience. Three people had some of their benefit put on a money management card to limit how it could be used, six were subject to job search sanctions and three were required to upskill.
“From the get-go we knew this would be unworkable because frontline organisations know that these benefit sanctions don’t actually help people to find employment,” said Green Party spokesperson Ricardo Menendez March.
“What is worse, we know that the government has continued to put financial sanctions for tens of thousands of people each year when they’ve only been able to find 20 people to apply non-financial sanctions, which at least do not strip people of their full benefit.”
He said part of the problem was that some of the non-financial sanctions required people to take beneficiaries “basically under duress” for things like community work experience.
“Money management also requires people to be able to afford their basic expenses, such as rent. And when 50 percent of your income is put into a green card under the money management sanction, most beneficiaries won’t actually be able to make ends meet due to the policy, making the policy effectively unworkable.
“All of this shows that the minister is more interested in punishing beneficiaries and actually finding solutions that help people into employment and create jobs. This process took months, millions of dollars’ worth of money for IT changes, and it’s resulted in effectively the status quo continuing as opposed to seeing any significant changes.”
In a statement, Social Development Minister Louise Upston’s office said non-financial sanctions were an alternative and ensured there was accountability in the system for people who did not meet their obligations, “while also recognising that reducing a benefit is not the answer for everyone”.
It said Ministry of Social Development staff could apply them in specific circumstances such as when someone had dependent children, when it was their first obligation failure or when they had attended an appointment with a case manager within five working days of their obligation failure.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
