Part 4: Key demands and challenges

This section outlines the key demands and challenges facing the social development portfolio. As the use of data and evidence to inform interventions is improved, we are beginning to target services to where they deliver long-term, proven, high-impact results, for those who most need it.

The Work and Income Advisory Board was put in place in 2012. It is helping to challenge the Ministry’s thinking and provide fresh ideas. The current Board members’ experience in the insurance and finance industries, which already use investment approaches to reduce future liability, has proven valuable in embedding this approach at all levels of the welfare system.

As we weave together the different areas of work across the Ministry under an integrated operating model and seek further opportunities for cross social sector approaches, we may need to consider whether the Board’s current scope and model are right for the future.

Supporting people into work

Recent changes to the welfare system focus on employment outcomes for working-age beneficiaries

Legislative changes, the introduction of an investment approach and a new differentiated service delivery model have contributed to the most significant change to the welfare system in 50 years. These changes have provided a simpler benefit system and increased the focus on achieving employment outcomes for beneficiaries.

Underpinning the reforms is an investment approach. This improves understanding of the lifetime cost of the distinct groups of people that make up the total population of the benefit system. An enhanced case management approach helps identify the needs and barriers people face. As a result there is a stronger focus on those most at risk of becoming welfare dependent and who would benefit from intensive training or employment support, while continuing to support those who are unable to work.

Each year, an actuarial valuation is carried out to determine the estimated future cost of the benefit system in New Zealand. This allows better decisions to be made on where and who to focus on for greatest return.

The latest valuation of the welfare system shows that the current long-term liability is $76.5 billion as at 30 June 2013. This has decreased by $10.3 billion from 30 June 2012; $4.4 billion of this can be attributed to improved experience in areas where welfare reforms and management actions are able to have an influence. For instance, job seekers and sole parents are moving from dependence on a benefit into sustainable employment in greater numbers than expected.

The number of working-age people receiving a benefit is falling

Working-age benefit numbers have fallen from 320,000 in August 2012 to 294,000 in June 2014.

As at June this year, the number of working-age job seekers who have been on a benefit for more than 12 months has reduced by 13.4% in the last two years. The number of sole parents reliant on a benefit is at its lowest since 1988 and there has been a 5.6% reduction in job seekers receiving a health and disability related benefit.

In addition, more than 25% of the total number of working-age people who left a benefit for work in the last year were aged 18 to 24 years.

The rate of future reductions is likely to be lower as the pool of people we work with becomes increasingly dominated by those who are further away from the labour market.

To reduce numbers further and faster, we need to expand what is working and look at new innovations

A better understanding of who to invest in means increased services and support for those who need it most, while investing less in people closest to the labour market. This includes working more actively with people with health conditions and disabilities as well as those with more complex barriers to employment who require longer-term investment. A new multi-category appropriation (MCA) gives greater flexibility to target funding to investments that improve employment outcomes.

Trials are an important feature of the new approach. They allow the testing of assumptions about what works for different people and to continuously test, learn from, and refocus services. The MCA provides the platform to make these trials possible. Evidence from initiatives, such as the Youth Service and Work Focused Case Management, shows that a more intensive service and a level of specialisation are required for some groups.

We look forward to discussing with you what we see working well currently that can be built off and your priorities for further refining the system.

Supporting young people into financial independence is a key factor in reducing long-term benefit dependency

Young people as a group experience significant labour market disadvantage, because of their lack of work history and networks. Young people with no qualifications and few skills are at a particular disadvantage. People who first went on a benefit as a teenager make up 70% of New Zealand’s future welfare liability.

The Youth Service was established in 2012 to address this long-term impact by looking at the drivers of long-term benefit receipt. It represents a new approach to working with vulnerable young people. Providers are contracted to work actively and intensively with young people to connect them with education, training and skills that will reduce their likelihood of needing income support in the future. Around 13,000 young people are involved with Youth Service.

The initial focus has been on getting youth enrolled in the Youth Service and engaging them with education, parenting support, training and work-based learning. It can take several months to build this engagement as many people who enter the Youth Service have experienced difficulties with mainstream education, are disengaged from school, and have complex issues that need intensive support.

Early evidence suggests the Youth Service is helping young people, particularly those receiving a Youth Payment benefit, to become independent of the benefit system. It also appears to be helping young people to gain NCEA qualifications. A recent evaluation shows that those receiving a Youth Payment benefit spend less time on a benefit and fewer transition to a working-age benefit.

Improving outcomes for teen parents and their children requires strategic investment to reduce long-term benefit dependency

Teen parents have the highest lifetime liability costs of all groups receiving a benefit and their children are at greater risk of poor outcomes. Services provided to teen parents and their children are being reviewed to make sure that support matches the needs of each family and is easy to access and use. In the longer term, work is needed to develop cross-agency interventions that provide integrated support to these families.

Ensuring the welfare system is fair, transparent and accessible is an ongoing imperative

Current opportunities to strengthen the system include bringing the obligations of the Emergency Benefit into line with other main benefits and ensuring benefit settings do not encourage recent migrants to quickly come on to a benefit.

There may also be opportunities to use levers in the income support system to help improve material wellbeing. These include:

• making sure hardship assistance is fit for purpose and has the right incentives and obligations
• ensuring the tax/benefit interface and effective marginal tax rates are fair and provide the right incentives
• considering how income support is granted and paid to align it better with the shifting patterns of family demographics, particularly for shared care arrangements for children.

For those who cannot work, the focus is on ensuring that they continue to receive timely and accessible services.

Rewriting the Social Security Act will make it more coherent and easier to understand

The Social Security Act establishes New Zealanders’ fundamental legal entitlements to social assistance. Since it was introduced in 1964, the Act has been subject to 139 amending Acts and as a consequence is piecemeal, disjointed and in places lacks coherence and consistency. A rewrite is underway to ensure the legislation is fit for purpose and to address public criticism of the complexity of the Act. New legislation is due to be introduced by December 2015.

The rewrite is not planning to introduce major policy reform; rather the focus is on improving the clarity and consistency of the Act with a small number of policy changes aimed at supporting modern and efficient service delivery. However, the importance of the Act means any changes will attract significant public interest and comment.

Transforming housing assistance for people on low incomes

The cost to government of housing support is increasing

People on low incomes are increasingly finding it difficult to enter or stay in the private housing market. Increases in market rents, lack of affordable housing supply, and the proportion of income spent on housing related costs are increasing demand for social housing.

As at 30 June 2014, 5,840 people are on the waiting list for social housing. The greatest demand is in the bigger cities, particularly Auckland and Christchurch.

Over the next 20 years the demand for social housing and accommodation support is expected to increase significantly.

Between 58,000 and 64,000 people will receive an income-related rent subsidy in 2014/15, costing $720 million. Approximately 300,000 will receive the accommodation supplement, costing $1.2 billion, to assist with their housing costs in the private market (rent, board or home ownership). The proportion of people receiving the maximum accommodation supplement assistance has increased from 33% in 2007 to 39% in 2013.

The transfer of social housing functions provides opportunities to improve housing outcomes

In April 2014, the Ministry became responsible for the independent assessment of a person or family’s eligibility for social housing, managing the waiting list and administering income related rent subsidies. The transfer of these functions from Housing New Zealand Corporation to the Ministry is part of a broader programme of work to transform the social housing sector in New Zealand.

Over 80% of state housing tenants receive other support from the Ministry. The transfer of the housing assessments allow more comprehensive needs assessments, with housing included alongside employment, income and other social services. Having a single view of people’s social needs provides opportunities to deliver more efficient, wrap-around services to individuals and families. In addition, we are working on ways to use this new function to drive better performance from the social housing system.

As part of these changes, tenancy reviews began in July 2014. The reviews support more efficient use of social housing stock by ensuring the right people are in the right house for the right duration. This frees up more social housing for allocation to those with high needs. Reviews are initially focused on tenants who are most likely to be able to afford and sustain private housing, in areas where affordable housing is available.

More active purchasing of social housing services will improve and diversify social housing provision

The transfer of housing functions is intended to support the growth of social housing provided by community housing providers. It creates a more level playing field by extending the income-related rent subsidy to these providers. Options are being explored to apply an investment approach to better target housing and other support to move more people into independence.

Social housing makes up only 5% of the rental market. The barriers low-income renters face in moving into, and remaining in, private sector housing also need to be addressed. A package of supports is available to help them make this move. Opportunities also exist to target services and support to specific population groups, such as young people who may lack the social and economic mobility to find quality housing.

Supporting vulnerable children

Awareness and reporting of child abuse and neglect have increased significantly in the last decade

The Ministry funds a broad range of interventions targeted at vulnerable children, including home-based early intervention programmes. The Ministry also delivers care and protection services to the most vulnerable.

Notifications to Child, Youth and Family (CYF) about the safety or well-being of a child or young person have increased from around 41,000 in 2004 to nearly 147,000 in 2014.

A key driver has been family violence incidents attended by police where children or young people are present. The 58,000 police family violence referrals to CYF in 2014 accounted for 39% of all notifications.

Alongside this, notifications have increased through the growing public awareness of child abuse and neglect. This has been informed by government campaigns such as It’s not OK and Never Shake a Baby, and community awareness initiatives by CYF and community organisations.

The significant rise in notifications has resulted in more cases requiring CYF to take further action and an increase in substantiated findings of abuse and neglect. Nearly 19,000 children and young people had substantiated abuse and neglect findings in 2013. Despite this increase in demand, CYF’s social workers see 99% of critical cases within 24 hours.

CYF works with about 32,000 children with care and protection and youth justice concerns each year. Of these, around 5,000 children and young people are in the custody of the Ministry’s Chief Executive at any one time, and nearly 4,000 of these live in ‘out-of-home’ placements with extended family/whānau or non-kin caregivers.

Legislative reforms have strengthened the framework for protecting and improving the wellbeing of vulnerable children and young people

The Vulnerable Children Act 2014 and the Children’s Action Plan are driving fundamental changes in the way government collectively protects and improves the wellbeing of children and young people. These legislative reforms will result in significant change, with resourcing implications for the Ministry. The successful implementation of these changes is likely to be a significant focus of the social development portfolio over the next few years.

The Vulnerable Children Act makes government agencies jointly accountable (through the Vulnerable Children’s Board³) for measures to improve the wellbeing of vulnerable children. Both the Act and the Action Plan increase government’s ability to support and improve outcomes for children and young people leaving CYF’s care because they are living with a permanent caregiver or are moving towards independence.

From 1 July 2014, Chief Executives are required to produce, and report progress on implementing, a cross-sector agency plan called the Vulnerable Children’s Plan. The Plan sets out how agencies will collectively achieve the Government’s priorities for vulnerable children. The first plan is due to Ministers by April 2015.

A key feature of the Children’s Action Plan is the development and implementation of new Children’s Teams. These focus on supporting children who, while vulnerable, are not in need of statutory care and protection and whose needs are better met through a non-statutory/community service.

The Action Plan is also introducing a central Hub to act as the single point of contact for all concerns or enquiries about children and young people, a Vulnerable Children’s Information System (ViKI) and initiatives to improve the children’s workforce.

Child, Youth and Family is modernising and refocusing on its core statutory role

Aligned with the legislative changes, recent reports such as the Workload and Casework Review have indicated areas where services could be improved. Together, these components provide opportunities for CYF to focus more strongly on its core business - children being harmed through abuse or neglect, and those children at greatest risk of such harm.

CYF is modernising the way it operates, with a focus on improved outcomes for the children and young people it works with, particularly those in the care of the Chief Executive. These changes will address social work caseloads, enhance training and tools, and introduce an investment focus to make sure spending is going to where it gets the best results for the most vulnerable children. The operating model will also consider the interface between children in care and those with whom the Children’s Teams are working.

The Workload and Casework Review found that, on average, a care and protection social worker spends nearly 50% of their time on administrative tasks. Resources are being refocused on core business by freeing up social worker capacity, reviewing caseloads, and improving the intake process and the way decisions are made.

Operational decision-making is being strengthened through a better understanding of the services that provide the best outcomes and a focus on funding the right volume and mix of those services. A new outcomes and measurement framework for vulnerable children will identify and measure key outcomes.

This work also includes the Children’s Action Plan’s multi-agency Strategy for Children and Young People in Care. The strategy provides clear outcomes to be achieved for those who need care and protection. Its key elements include better assessment, planning and support for all children in care, including for young people leaving care to independent living. There will also be a reinvigorated family group conference process and a broader range of care options for children and young people who cannot live with their own family.

Enhancing support in the youth justice sector

Youth crime rates are falling, but there are disparities in outcomes

The earlier young people begin offending, the greater the odds they will re-offend. The drivers of youth crime are complex and can involve poor life and family circumstances, lack of engagement in schooling and negative peer influences. Persistent youth offending leads to a higher risk of offending as adults, negatively impacts on other life outcomes and earnings, creates more victims and affects community safety.

The Fresh Start for Young Offenders initiatives, introduced in 2010, provide a range of youth justice interventions. The initiatives allow more intensive work over time to help young people turn their lives around. The Youth Crime Action Plan, introduced in 2013, is a 10-year cross-agency plan that builds on existing initiatives and takes a practical approach to supporting youth justice services, frontline workers, service providers and volunteers. The plan aims to improve the way government agencies engage with and support communities, reduce escalation and provide young people with the right intervention at the right time to reduce reoffending.

Between 2009 and 2013, the youth crime rate dropped 37%, with significant decreases in the apprehension of young people by the Police, youth justice family group conferences and cases reaching the Youth Court.

A primary challenge for the future will be to address the issue of disparity. Youth crime trends are encouraging, but more work is needed to address offending rates for Māori young people, who are significantly over-represented in the youth justice system. While overall youth justice numbers are declining, the numbers for Māori are declining at a slower rate. Māori make up 17.8% of the youth population, but in 2012/13 Māori made up 55% of apprehensions (14 to 16 year-olds), 59% of youth justice FGC referrals (10 to 16 year-olds), and 58% of Youth Court appearances (14 to 16 year-olds). Opportunities also exist to explore the possibility of raising the age at which young people leave the youth justice system to improve outcomes.

Improving outcomes for communities

Investment is being targeted to services that are effective and align with government priorities

The NGO and community sector is facing the twin pressures of increasing demand and a constrained fiscal environment. The Ministry invests over $550 million annually in the provision of social services by non-government and community organisations. To ensure this funding is invested most effectively, the Investing in Services for Outcomes programme has been established. This will more clearly target services, streamline and simplify contracting and reporting requirements and provide more effective support for providers.

Investing in Services for Outcomes seeks to coordinate and tailor support for vulnerable people and communities according to need and will provide the flexibility to work differently in different communities. The Ministry’s operating model changes will better support and achieve these aims.

A Strategic Investment Framework focuses funding on services that align with government priorities that are underpinned by a strong evidence base. The framework also supports interagency work to develop common business viability standards across agencies, common accreditation processes and innovative purchasing practices.

Investing in the capability and capacity of the sector is necessary to achieve these aims. A Capability Investment Resource provides funding for organisational development and mentoring, focused on supporting cooperative activity. This recognises that broader, sustainable social development comes from improving cross-sector coordination and collective vision.

A long-term whole of government approach to reducing the impact of family violence is under development

Reducing family violence requires fundamental change in how agencies work together and with the sector. Long-term, integrated approaches are required to prevent and respond to family violence. Interventions and support for victims and child witnesses are only one component of a large and complex system that also seeks to hold offenders to account and to rehabilitate them.

This new approach, Achieving Intergenerational Change, recognises the harm that family violence causes across generations and focuses on the need to break the cycle. It also focuses on the need to protect older people from abuse and neglect by family members.

International research indicates that primary prevention is key to the long-term reduction in family violence. There is good evidence that programmes and initiatives such as the It’s not Ok Campaign are working well to raise awareness of family violence and change people’s perceptions. However, more evidence on what works well or is promising is required to develop improved responses to family violence. The Ministry is enhancing primary prevention initiatives and supporting communities to engage with hard-to-reach families, expanding current response systems, and connecting multi-agency resources to improve responses.

A comprehensive strategy for addressing sexual violence is being developed with communities

The Ministry is coordinating a cross-agency approach to sexual violence⁴. A review into the efficiency of funding provision, drivers of demand and service duplication and gaps has highlighted the need to focus on primary prevention.

A draft collaborative five-year National Sexual Violence Primary Prevention Strategy and Programme of Action has been developed. Its aim is to ensure children and young people are safe from sexual violence, to stop sexual violence before it occurs, and ensure that all communities have social norms that encourage safe and appropriate behaviour and interactions.

Alongside this review, the Social Services Select Committee is undertaking an inquiry into the funding of specialist sexual violence services. Submissions have highlighted funding issues in the sector. Interim funding of $10.4 million over two years has provided immediate stability for specialist sexual violence service providers, with a comprehensive long-term funding strategy now under development.

Youth mental health needs are being addressed through improving support, services and information

The Prime Minister’s Youth Mental Health Project is providing a cross-government approach to support the mild to moderate mental health needs of young people between the ages of 12 and 19 years. The project has three key streams – improving support in schools, providing innovative and integrated services, and increasing access to high-quality mental health information. The Ministry is supporting Youth One Stop Shops to access sustainable funding for current social service delivery and is leading the:

• development of Common Ground, an online hub for parents, family and friends of young people to access mental health
• Lifehack programme, which supports youth wellbeing through the innovative use of social media and online technology
• implementation of Youth Workers in Secondary Schools.

Sustaining community development and place-based initiatives

There is a growing demand for community input into the delivery of services

Communities are becoming more diverse and there is a growing expectation that they are more involved in decisions about services, so that services reflect local needs. Beyond this, communities increasingly want input into the way these services are delivered. Building on local knowledge and the energy and commitment of the people who live in those communities is important for achieving better results.

Community development and place-based initiatives support and encourage communities to identify their specific needs and allow innovative local responses. The cross-sector Social Sector Trials, overseen by the Joint Venture Board⁵, are trialling devolved decision making and local ownership of service delivery targeted at specific population groups within a defined region.

Programmes and initiatives such as SKIP and the It’s not Ok Campaign tailor their delivery to meet local needs, promoting community ownership. The Ministry has also worked with communities to develop innovative, specific placed-based approaches to address local social issues, for example in Kaitaia through Make it Happen Te Hiku.

Determining the future shape, locations and pace of community-led social service design and delivery is an important issue for both the Ministry and the social sector more broadly, allowing the various initiatives to be understood as part of a continuum of approaches. Agencies are jointly considering how to:

• identify better ways to assess the effectiveness of these approaches in shaping services
• determine where community engagement and involvement are the best way to shape services, engage communities and improve outcomes
• address questions across the social sector on issues of integration.

Addressing the needs of Māori and Treaty settlement obligations

Māori are over-represented among the people needing our support

Māori make up:

• 60% of young people in a youth justice residence
• 48% of young people on Youth Payment or Young Parent Payment
• 46% of sole parent support recipients
• 34% of job seeker support recipients.

This over-representation has remained largely unchanged over the last two decades. Māori youth, who feature strongly in these statistics, will become an increasing proportion of the New Zealand population as the non-Māori population ages. This young Māori cohort will represent a significant long-term liability if they continue to come in contact with social services at the present rate.

A range of initiatives is providing a coordinated approach to addressing this persistent over-representation and improve outcomes both for Māori and the overall wellbeing of the nation. These include building strategic relationships with iwi who have high numbers of children in care, developing service delivery guidelines for our work with Māori whānau and providing initiatives with strong community involvement such as E Tu Whānau⁶. Iwi and Māori providers are also involved in delivering work placement and readiness services.

The Ministry has lead responsibility for the Social Sector Accords that form part of the Treaty settlements with Ngāi Tuhoe and Te Hiku. These Accords provide a commitment on behalf of the Crown to work with iwi to identify shared priorities and actions to improve social outcomes. Both iwi have developed multi-agency work programmes and expect to meet regularly with Ministers to discuss progress on these.

Many iwi are seeking stronger relationships with Government and more involvement in determining priorities for addressing social issues. Consideration is currently being given to how best to manage the increased interest in such agreements, including how to support or implement them.

Reducing fraud and accumulated debt

A stronger focus on preventative measures will help to tackle increasingly sophisticated fraud

A range of initiatives aimed at preventing and detecting welfare fraud and improving the collection of debt from welfare fraud has been implemented over the last two years. Notably, the Social Security (Fraud Measures and Debt Recovery) Amendment Act 2014 makes spouses and partners of beneficiaries accountable for welfare fraud. This will mean both parties are jointly and severally liable to repay debt and means the consequences of welfare fraud are appropriately shared.

Introduced in March 2013, the Information Sharing programme with Inland Revenue allows the Ministry to identify whether an individual receiving a benefit has under-declared or not declared their income. This, together with the increasing sophistication of fraudulent activity, has led to a stronger focus on prevention and on reducing overpayments through improvements to systems and processes to stop fraud before it happens.

In 2013/14, 7,650 fraud investigations were completed; 2,270 of these resulted in overpayments totaling $64.4 million. Prosecution is sought where there is evidence of deliberate, planned fraud. There were 868 successful prosecutions in the year. More than $280 million was recovered from all debt, of which 47% related to Recoverable Assistance (interest-free loans given for essential items such as school uniforms or a washing machine).

Improvements to the current operating model and new automated business processes are expected to increase the debt collection from former clients. As a result of these improvements, we expect increased debt revenue sooner, with sustained debt repayment arrangements and targeting debtors who can pay but refuse to.

Footnotes

3: The Vulnerable Children’s Board comprises the Chief Executives of the Ministries of Social Development (Chair), Education, Health, Justice, Business, Innovation and Employment and Pacific Island Affairs, Te Puni Kōkiri and New Zealand Police.

4: Services to address sexual violence are provided by the Ministries of Justice, Health and Social Development, the Department of Corrections, ACC and the New Zealand Police.

5: The Joint Venture Board comprises the Chief Executives of the Ministries of Social Development (Chair), Health, Education and Justice and the New Zealand Police.

6: E Tu Whānau is a strengths based initiative that embraces Te Ao Māori concepts to support family wellbeing.