This research report provided some evidence for the causes of long-term benefit dependency for unemployed people. It concluded that the ‘unemployment trap’ or ‘poverty trap which is also known as the low-wage trap’ for unemployed people is due to the economic downturn, decreased in service demand in low paid or low skill jobs, decreases in full-time employment and increases in part-time and seasonal employment, as well as price increases in food, petrol and public transport. the current policies and the proposed social welfare reforms do not address or consider these effects on unemployment beneficiaries. Additionally, there is no employment related expenses subsidies. Furthermore, the abatement rate of the Unemployment Benefit has put unemployment beneficiaries in hardship when they are taking up part-time employment offers where they fund their own employment related expenses and therefore are not making any additional income. It can be concluded that unemployment beneficiaries are being penalised for working part-time.
Given the limited timeframe and words limits, full comparative analyses of the financial assistance for the unemployed people that are available in UK, Australia, and New Zealand are beyond the scope of this project. Other analytical framework such as Cost Benefit Analysis will be very useful to predict the feasibility of the new policies to be adopted in New Zealand. The solution is to remove disincentives (to economic growth) without harming the degree of social protection that each society’s wishes to provide has yet to be found. Therefore further study and wider analysis are required.