Source: Radio New Zealand
Minister for Social Development Louise Upston RNZ / Angus Dreaver
The Greens say the number of applications for advanced support being denied has “skyrocketed” during the last year and people are being denied assistance for basic essentials.
But the Minister for Social Development Louise Upston says there’s been no policy change and she’s not concerned because “advances create greater hardship down the track”.
Data provided by the minister shows the number of declined applications for payment advances to help with clothing has doubled and declines for help with electricity costs has more than doubled compared to the quarter ending June 2023.
Advance payments of a benefit is a one-off payment to help pay for essential or emergency costs. MSD can help with costs such as electricity, dental treatment, essential home repairs, glasses, washing machines, car repairs and more.
Between June 2023 and June 2025 there has been an increase in declined applications of:
- 72% for appliances: 327 applications declined in June 2023 compared to 564 declined in June 2025
- 91% for bedding: 366 compared to 699
- 82% for beds: 375 compared to 684
- 65% for car repairs: 1551 compared to 2556
- 102% for clothing: 1515 compared to 3060
- 36% for dental treatment: 1317 compared to 1785
- 160% for electricity: 300 compared to 780
- 83% for essential home repairs: 54 compared to 99
- 52% for fridge/ freezer: 219 compared to 333
- 86% for furniture: 342 compared to 636
Some of the most common reasons these applications are denied include whether the circumstances could have reasonably been foreseen, the person had already received help for the same or similar need in the past, or that it wasn’t a qualifying need.
The reason advances were declined because circumstances could have been reasonably foreseen, and declined because it was not a qualifying need, have both doubled compared to June 2023.
Upston appeared before the Social Services Committee during Scrutiny Week, where Green MP Ricardo Menendez March asked why the decline for advances for assistance like clothing and electricity had “skyrocketed” under the past financial year.
Green MP Ricardo Menendez March VNP/Louis Collins
He asked whether the minister was “comfortable” with increased unemployment and hardship in communities while decline rates had doubled.
Upston said she was aware there had been an increase in the number of declines, but confirmed there had been no policy change in regards to granting advances.
Her key concern though was the nature of advance payments themselves, because it meant people had less than their benefit in the weeks from then on.
“I’m not sure that benefit advance is necessarily a good idea when people turn up to MSD with challenges.”
Upston said she would be surprised if Menendez March was advocating for a larger number of advances because “that pushes people into more financial hardship in the weeks and months ahead”.
Menendez March said people access advances because they “just simply cannot make ends meet and cover the costs in front of them”. He said advances were one of the few tools to prevent people losing access to electricity, for example.
Upston acknowledged “we’ve got very challenging times,” and “no one around this table would be surprised” there are people who are finding the cost of living challenging at the moment, “which is why it is the primary focus of our government to get it under control.”
“We need to stick with our plan focusing on reducing inflation and reducing the cost of living, but I accept that there will be households who are finding it tough right now.”
Asked by reporters after the Scrutiny Week hearing why there had been an increase in declines, Upston said that was a question for MSD. RNZ has approached MSD for comment.
She said she wasn’t concerned about the increase, and when asked why she wasn’t concerned, repeated that “advances create greater hardship down the track in the weeks and months ahead”.
“It may well have been that they were too lenient in the past, but as I said, there have been no policy changes around any form of hardship.”
Asked whether MSD was taking cues from the government’s rhetoric of getting tougher on beneficiaries, Upston rejected that assumption.
“We are focused on reducing the number of people on job seeker benefit and supporting them into work.”
Menendez March told RNZ under Upston’s watch more people were being declined assistance for “basic essentials.”
“At a time of a cost of living crisis, it’s morally corrupt to run a regime where more people are being declined for assistance.
“Advances are often a last lifeline for people in hardship unable to cover the cost of bills, clothes and bedding which allows them to live dignified lives.”
Government target ‘at risk’
The chief executive of the Ministry of Social Development, Debbie Power, also appeared before MPs for questioning.
NZ First’s Jamie Arbuckle asked whether MSD was on track to meet the government’s goal to reduce Jobseeker numbers to 140,000 by 2030.
Power responded that it was “fair to say” the target was “probably a bit at risk”.
“That’s what you would expect given the economic conditions. But what I can say is we are absolutely committed to ensuring that New Zealanders and our clients get access to jobs as they come up.”
Power said 42 percent of people who came on a benefit last year in New Zealand were “really highly skilled”, so it was important to make sure they get access to jobs in the labour market.
“And when the economy turns making sure our clients are at the front of the queue to take advantage of their economic recovery is something that we are absolutely committed to.”
Power was also asked by Labour’s Priyanca Radhakrishnan whether changes to jobseeker payments for 18 and 19 year olds would get the government closer to that target.
From November next year, young people wanting to get Jobseeker Support or the equivalent Emergency Benefit will have to take a parental income test, to see whether their parents can support them instead of the taxpayer.
Power said she didn’t think that was the “intent” of the policy, but acknowledged MSD was expecting 4000 18 and 19 year olds to be impacted by the change.
National’s Paulo Garcia also asked for an update on the government’s traffic-light warning system, which sets out clear consequences for beneficiaries who fail to meet certain requirements.
Jobseekers will have to reapply for the benefit every six months – instead of annually – and any transgressions will remain on their record for two years, twice as long as they do now.
The law change will also allow new sanctions, such as mandatory community work or money management payment cards.
Power said currently, 98.5 percent – 345,000 people – were in the green setting, meaning “no problems, meeting obligations, all good”.
There are 0.6 percent – 1,953 people – in orange, and 1 percent – 3,189 people – in red. She acknowledged that was a small number of people. Power said what she’d heard from the front line was that staff and clients appreciated the transparency of the colour arrangements to better understand what was expected of them.
In regards to the mandatory community work or money management payment cards – the non-financial sanctions MSD had been able to apply in the last six months since the law came into force – Menendez March asked how many had been applied.
Power said there’d been about “a dozen.”
Menendez March said the minister often spoke about these sanctions as being a “better alternative”, and questioned why only 12 had been applied while financial sanctions had remained the majority.
Power said there was particular criteria in terms of accessing non-financial sanctions, such as being in case management, having dependent children, failing an obligation then attending an appointment with the case manager.
“It significantly reduces the size of people where those sorts of sanctions will apply.
“So it’s a tool that we can use for the right circumstances.”
Menendez March pushed back, asking “if only 12 people have been given a non-financial sanction, does that say that the circumstances are almost never right?”
Power rejected that saying it was because “we’re just starting.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand