Officials warned welfare policy may encourage teen pregnancies

Monday, 3 November 2025

Teenagers may be pushed into unsafe or abusive living situations, and some may even be incentivised to have children, under the Government’s plans to means-test benefits for 18- and 19-year-olds based on their parents’ income, officials warned.

The warnings came from the Ministry of Social Development in a regulatory impact statement released on Monday.

In it, officials urged Social Development Minister Louise Upston to provide more training and education for out-of-work teenagers, instead of cutting their access to benefits.

Officials wrote that better literacy or numeracy skills would lead to 'better longer-term outcomes for young people, and government as a whole“ and had a better chance of reducing long-term benefit dependency.

The resulting hardship from the policy may lead to 'more negative life outcomes than would have been the case otherwise', they wrote adding the long-term impacts might outweigh the initial benefits.

It could created a risk that young people may deliberately become pregnant or start a family to secure welfare payments: 'It is possible that some young people may be incentivised to have children to maintain access to income support as the proposed eligibility changes do not apply to a young person with a dependent child/ren,' they wrote.

Upston is proceeding with the policy which is expected to come into effect from November next year once legislation has been introduced.

“Our position is very clear: young people should be in work, in education or in training,” she said.

“Young people should first be supported by their parents, and we don’t believe a life on welfare is as good as it gets for young people.

“In terms of the documents, officials regularly provide free and frank advice to Ministers – that’s their role. This was a significant Budget announcement, and there are still some policy decisions to be made around it.”

The proposal

Upston first pitched and got Cabinet to agree in principle to introduce a Parental Assistance Test aimed at reducing benefit access for young people, and reinforcing the notion of parental responsibility, ahead of the May Budget.

The initiative was agreed upon to support the Government’s wider goal of having 50,000 fewer people on Jobseeker Support by December 2029, compared to December 2023. It was estimated to save $163.704 million over four years, and to leave 9205 fewer teens on Jobseeker.

Because it was a Budget policy, and had to be confidential, officials did not consult on it - but they did tell Upston it would lead to the expectation that parents with low incomes must financially support their 18 and 19 year olds when they are not able to. There was also concern of a “marriage loophole”.

A new revised plan, which Cabinet signed off on in September, extended it to all young people - regardless of their relationship status - and widened it out to not only include those looking for work, but those on a temporarily unable to work with a health condition or disability, as well as those who temporarily need help due to hardship, including students in hardship.

She also set up a parental support gap, to assess whether a young person could reasonably rely on their parents and cover issues like family breakdown or abuse, not just the parents’ income.

The refined proposal would apply to about 4300 young people.

The documents make clear Upston was driven by the government’s broader strategy to reduce its costs in the short term, set up measurable targets, and its philosophical stance on welfare: that it should be targeted to those who need it, and that teenagers should be supported by their parents.

Option two, to better fund education and training for teens, had upfront costs, although officials said it was better in the longer-term.

Officials wrote Upston’s preferred option would not help reduce barriers to employment and could instead “contribute to increased benefit dependency in the longer term resulting from the entrenchment of labour-market disadvantage”.

Green Party social development spokesperson Ricardo Menendez-March accused the government of 'charging ahead“ with a policy which will harm young people, and throwing them into hardship. “They have been warned by the Ministry of Social Development that the policy could lead to people becoming financially dependent on abusive parents, put pressure on community organisations picking up the hardship that thousands of young people could be put in, and create greater costs for the Government in the long term,” he said.