From next year, teens whose parents earn more than $65k won't be eligible for the dole
The Government is introducing a $1000 incentive to keep young people on their new job coaching service off the dole, amid efforts to tackle the “trap” of starting on welfare at a young age.
A previously-announced plan to cut the dole for 18- and 19-year-olds who could be supported by their parents is also being brought forward to the end of next year - and it has now been revealed how much money parents can make before they are expected to support them.
If parents are earning a little over $65,000 they will be required to support their unemployed 18 and 19-year-olds, rather than the teens receiving the benefit.
Social Development and Employment Minister Louise Upston has today announced a carrot on the stick alongside the stricter rules: a $1000 bonus for certain young people who stay off the benefit for long enough.
“Young people participating in the Ministry of Social Development’s new Community Job Coaching service can apply for a $1000 bonus payment if they get a job and stay off the benefit for 12 months,” Upston said.
“Going on welfare when you’re young is a trap, with recent modelling suggesting that people under the age of 25 on Jobseeker Support will spend an average of 18 or more years on a benefit over their lifetimes.
There are more than 15,000 people aged 18 and 19 who are on the Jobseeker benefit right now, she said.
“I have far greater hopes and aspirations for those young Kiwis than a life on welfare.”
Upston outlined further details around the earlier announcement that young people would stop being eligible for the benefit if their parents could support them.
“Today, I can confirm that we are bringing our Budget initiative forward for implementation to November 2026. From then, all young people aged 18 and 19 without dependent children will have to pass a Parental Assistance Test in order to access Jobseeker Support or the equivalent Emergency Benefit,” she said.
“This targets welfare assistance to those who need it the most, as young people will be expected to first be supported by their parents.”
The new Parental Assistance Test will kick in when young people apply for a benefit and comprises:
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A parental income test, demonstrating whether their parents earn income at or below the income limit, and/or;
A parental support gap test, demonstrating they cannot reasonably be expected to rely on their parents for support.
The income limit will be set at an income cut-out point for a couple with children receiving the Supported Living Payment and will be adjusted annually.
Currently this limit is $65,529 and it is expected to rise to reflect the Annual General Adjustment of benefit payments.
This limit will ensure that young people from very low-income families will still be able to access support if required.
Eligibility for the new $1000 bonus payment will apply to people aged from 18 to 24 on Jobseeker Support:
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who have worked with Community Job Coaching after being on the benefit for at least 12 months
who find work
who stay off the benefit for 12 months
who are in work at the time of their application
The payment will be available for eligible young people 12 months later, from October 2026, and is part of National’s Welfare that Works policy.
“Our Government is focused on reducing benefit dependency in young people, and we have already introduced a number of initiatives such as a new phone-based employment case management service,” Upston said.
“We’ve got 4000 places for young people to get community job coaching. We’ve also got more regular work seminars and a traffic light system to help them stay on track with their benefit obligations.
“I am determined that young New Zealanders see education, work and training as their best options for the future.”
As of June this year, 15,045 18- and 19-year-olds were on Jobseeker Support, and more than 4000 are expected to become ineligible when the changes kick in.
The change was originally planned to happen in July 2027.
“With this announcement, we’re clearly saying that 18- and 19-year-olds who don’t study or work and can’t support themselves financially, should be supported by their parents or guardians, not by the taxpayer,” Upston said at the time.
Budget documents showed that it was forecast to save the Government $84 million a year from 2027.
Green Party social development and employment spokesman Ricardo Menéndez March said at the time the Government was “pulling the rug” on young people receiving income support.
“The Government has just told teenagers doing it tough that they are on their own. A lot of teenagers having to rely on benefits for support do not have family to lean on – the Government knows this, it just doesn’t care.”
Treasury expects unemployment to worsen over the next few years.
The jobless rate was now expected to be 5% over the next year, up from a forecast in December of 4.8%.
In 2027, unemployment is expected to be 4.8% – up from earlier forecasts of 4.5%.
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Scam Alert: Fake information regarding December Bonuses from MSD
The Ministry of Social Development is reporting that fake information is circulating about new ‘December bonuses’ or ‘benefit increases’
If you get suspicious communication, please contact Netsafe.
More than 120,000 disabled and older New Zealanders registered in the Total Mobility scheme will pay more for discounted taxi trips from next year as the Government announces a cut to trip subsidies.
Transport Minister Chris Bishop said subsidies would drop from 75% to 65% from July 1, 2026, blaming unsustainable rising costs.
Regional fare caps will also be lowered by around 10%.
Wide-ranging Ministry of Transport proposals for the scheme were released for consultation today. Suggested options included "strengthened" eligibility; periodic reassessments; caps on monthly trips; and the potential inclusion of ridesharing services.
"The Government is announcing decisions to stabilise the Total Mobility scheme so that the disability community is supported in a financially sustainable way, by all funding partners," Bishop said of the confirmed subsidy changes.
Disability Issues Minister Louise Upston said the new subsidy level would still be higher than what it was four years ago, when it was raised under the previous government.
"We appreciate these decisions will mean fares will increase for Total Mobility users.
"But they will still receive a higher subsidy level than prior to 2022. The changes also provide certainty that those who need the service will have continued access to it."
Demand for the scheme has soared since the subsidy rose from 50% in 2022. Registered users have jumped from 108,000 to 120,000, while trips have risen from 1.8 million in 2018 to three million.
Bishop said the 2022 increase had not accounted for higher demand over time.
"Increased demand now means the scheme is close to exceeding its Crown funding and is placing significant pressure on the contributions from local councils and NZTA," he said.
Costs are forecast to exceed funding by $236 million between 2025 and 2030 under current settings, according to the Government.
The Total Mobility scheme provided subsidised taxi fares for people who could not use public transport independently due to disability or age. The scheme was funded jointly by central government, NZTA's National Land Transport Fund and local councils.
The Government would also provide $10 million to NZTA to ease funding pressures on public transport authorities until the changes took effect.
Reacting to the subsidy changes, Disabled Persons Assembly chief executive Mojo Mathers told 1News that Total Mobility was an "essential service for us".
"This cut to Total Mobility on top of a cost-of-living crisis will only aggravate hardship in an already struggling population," she said in a statement.
"Total Mobility is an essential service for us. Not everyone can get on a bus or drive a car.
"Disabled people will face impossible choices when it comes to travel, when we know that over half don’t have enough to meet their everyday needs."
Labour has criticised the subsidy changes, saying the Government was "making life harder and more expensive for disabled New Zealanders".
Today's announcement came after a delayed year-long Transport Ministry review of the Total Mobility scheme, which included an earlier round of public consultation.
Further changes on the way, proposals in consultation
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Alongside the subsidy cut, the Ministry of Transport has opened consultation on proposals including trip caps, stricter eligibility assessments, and expanding service providers beyond taxis to include ride-hail apps and on-demand public transport.
"Beyond ensuring the scheme’s financial viability, the Government is also taking the opportunity to consider changes to strengthen a system so that it works better for disabled people,” Upston said.
"The Ministry of Transport will be releasing a discussion document to consult on proposals to strengthen Total Mobility to ensure fairer, consistent and more sustainable access to services for people with the greatest need."
The wide-ranging proposals were not yet Government policy and were open for feedback until March 22, 2026. The 10% subsidy cut was not part of the consultation.
The proposals include trip caps, with two options. The first would give all users a flat monthly cap of 30 to 40 trips at 65% subsidy, with either no further subsidised trips or a reduced 50% subsidy once reached. The second would allocate 10 base trips, plus extras based on need – for example, for employment, health, or education.
The ministry proposed tighter eligibility requirements, including medical evidence from health practitioners, occupational therapists or psychologists when applying.
Currently, assessment standards varied, with no documentary evidence required.
Periodic reassessments would also be introduced under another proposal, requiring users to be re-evaluated after a set period to ensure they remained eligible.
The proposals also aimed to expand service providers beyond traditional taxis to include ride-hail apps, on-demand public transport services, and volunteer community transport providers. The ministry said this could increase availability and give users more options.
It was unclear whether ride-hailing apps would include popular ride-sharing apps such as Uber.
To improve wheelchair accessibility, the ministry also proposed more incentives for service providers, including higher funding for installing ramps and hoists in vehicles, and raising the $10 per wheelchair trip payment that has remained unchanged since 2005.
The ministry was also exploring a national public transport concession for people with disabilities – separate from Total Mobility and implemented through the National Ticketing Solution from 2027.
Labour critical of subsidy changes
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Labour disability issues spokesperson Priyanca Radhakrishnan said the Government was "making life harder and more expensive for disabled New Zealanders by slashing discounted transport fares during a cost-of-living crisis".
"Under Christopher Luxon, disabled Kiwis will now pay more just to get to work, attend health appointments, or see loved ones,” she said in a statement.
"Disability communities feel betrayed. First came the overnight cut to flexible funding; then restrictions on residential care with no warning.
"Then Whaikaha was gutted and disability support shifted to the Social Development Ministry. Now, the transport subsidy many rely on to live independently has been cut.
"For many disabled Kiwis, affordable transport isn’t a nice-to-have, it’s a lifeline. It means independence, dignity, and the ability to participate in everyday life and that’s why Labour increased the subsidy in government. This latest change is taking us backwards."
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