New Zealand's government introduced parental income testing on Monday that ends Jobseeker payments for 18 and 19-year-olds whose parents earn a combined income of more than $67,225, a change estimated last October to make about 4,300 young people ineligible for support.
The change leaves some 18 and 19-year-olds to rely on their parents for support, unless they can prove they are unable or unwilling to. It comes with unemployment at an 11-year high of 5.6 percent, and unemployment among 15 to 19-year-olds currently sitting at 25.3 percent.
Beneficiary advocate Kay Brereton told Checkpoint the cutoff of $67,225 was outrageously low and said she had thought the same income cutoffs as student allowance would at least be considered; those currently stand at a combined parental income of $131,670 when living at home, or $141,451 when living away from parents.
With the university year approaching its end and many students hunting for summer jobs, Brereton said she worries many will be left in the lurch if they cannot find work, including students who do not qualify for student allowance but until now could get the jobseeker student hardship benefit during the holidays. She said some students may have to pause their study or move home as a result, and argued young people should be considered independent for state support from age 18, the point at which "they can vote, get married, go to war".
Social Development and Employment Minister Louise Upston had previously said the legislation reflected the government's commitment to reduce benefit dependency and encourage people into work.
"This legislation reinforces the expectation that young people who are not in employment, education or training should be financially supported by their parents, not by taxpayers through the welfare system," she said. "New Zealanders deserve a welfare system that is firm, fair and simple."
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Combined parental income thresholds for jobseeker and student allowance benefits
NZ$
The jobseeker benefit threshold applies to 18–19 year olds. The student allowance thresholds vary by whether the student lives with parents. Source: RNZ
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Analysis
Why This Matters
The change is estimated to remove income support from about 4,300 young people at a time when youth unemployment is high, with 25.3 percent of 15 to 19-year-olds out of work.
Students approaching the summer break may lose the jobseeker student hardship benefit they previously could fall back on if they cannot find holiday work, potentially forcing them to pause study or move home.
The policy sets a new expectation that parents, not the welfare system, financially support out-of-work 18 and 19-year-olds, a shift advocates say treats young adults as not yet independent.
Background
The Jobseeker Support benefit is New Zealand's main unemployment payment. The income test introduced on Monday is part of a welfare law change aimed at reducing benefit dependency among young people not in employment, education or training. The government estimated in October last year that about 4,300 young people would become ineligible.
Key Perspectives
Kay Brereton, beneficiary advocate: Called the $67,225 cutoff "outrageously low", said it should match student allowance thresholds around $131,000 to $141,000, and argued 18-year-olds should be treated as independent adults since they can vote, marry and go to war. She also worried about the change's effect on students over the holidays and on young people's confidence.
Louise Upston, Minister of Social Development and Employment: Said the legislation reinforces the expectation that young people not in employment, education or training should be financially supported by their parents, not taxpayers, and that New Zealanders deserve a welfare system that is "firm, fair and simple".
What to Watch
Whether students who cannot find summer work end up unable to pay rent or forced to pause their study, as Brereton predicts.
How many young people successfully prove they are unable or unwilling to rely on their parents, under the exemption in the change.
Any political or public reaction if the numbers of affected students exceed the government's October estimate of 4,300.
12 claims in this story checked against 1 source: 10 supported.
Show each claim
SupportedThousands of young New Zealanders lose access to Jobseeker benefits under the parental income test.RNZ New Zealand Headlines: “Thousands of young people will lose access to unemployment benefits due to parental income testing being brought in on Monday.”
Partly supportedUpston says the change cuts benefit dependency.RNZ New Zealand Headlines: “Social Development and Employment Minister Louise Upston had previously said the legislation reflected the government's commitment to reduce benefit dependency and encourage people into work.”
Not in the sourcesBrereton called the $67,225 cutoff “outrageously low.”RNZ New Zealand Headlines: “Beneficiary advocate Kay Brereton told Checkpoint the cut off point of $67,225 was outrageously low.”
SupportedThe government introduced parental income testing on Monday, ending Jobseeker payments for 18- and 19-year-olds whose parents earn more than $67,225 combined.RNZ New Zealand Headlines: “The government has ended Jobseeker payments for 18 and 19-year-olds whose parents earn a combined income of more than $67,225.”
SupportedThe change was estimated last October to make about 4,300 young people ineligible for support.RNZ New Zealand Headlines: “In October last year, it was estimated that about 4300 young people would become ineligible for support as a result.”
SupportedAffected 18- and 19-year-olds must rely on their parents unless they can prove they are unable or unwilling to do so.RNZ New Zealand Headlines: “The change leaves some 18 and 19-year-olds to rely on their parents for support, unless they can prove they are unable or unwilling to.”
SupportedUnemployment is at an 11-year high of 5.6%, and unemployment among 15- to 19-year-olds is 25.3%.RNZ New Zealand Headlines: “Unemployment rates are currently at an 11-year high of 5.6 percent.”
SupportedStudent allowance parental-income cutoffs are $131,670 for those living at home and $141,451 for those living away from parents.RNZ New Zealand Headlines: “The cut off for student allowance payments is currently a combined parental income of $131,670 when living at home with parents, or $141,451 if living away from parents.”
SupportedBrereton worries students unable to find holiday work may be left without support, and said some may have to pause study or move home.RNZ New Zealand Headlines: “She said she worried that some students may have to put their study on pause as a result.”
SupportedBrereton argued young people should be considered independent for state support from age 18, when “they can vote, get married, go to war”.RNZ New Zealand Headlines: “She said young people should be considered independent in terms of state support from the age of 18. "[That's] when they can vote, get married, go to war, all of those things - that seems to mean they're adults and we should consider them independent."”
SupportedUpston said, “This legislation reinforces the expectation that young people who are not in employment, education or training should be financially supported by their parents, not by taxpayers through the welfare system.”RNZ New Zealand Headlines: “"This legislation reinforces the expectation that young people who are not in employment, education or training should be financially supported by their parents, not by taxpayers through the welfare system," she said.”
SupportedUpston said, “New Zealanders deserve a welfare system that is firm, fair and simple.”RNZ New Zealand Headlines: “"New Zealanders deserve a welfare system that is firm, fair and simple."”
Correction
An earlier version of this story presented RNZ's paraphrase of Kay Brereton's comments as a direct quote. RNZ reported those comments in indirect speech.