A new parental assistance test will be introduced from July 2027 which will determine whether parents are able to financially support their 18- and 19-year-old children who are single and are not working or studying.

If they are, those young people will not be eligible for the Jobseeker or Emergency benefit.

The announcement came as part of the Government’s 2025 Budget.

“Young people can’t expect to go automatically onto a benefit, and parents must be ready to help. This change strengthens financial incentives to enter employment, education or training,” Social Development and Employment Minister Louise Upston said.

Upston said recent forecasts show 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.

Two years ago, Sarah* – who wants to keep her real name private for employment reasons – was on the Jobseeker benefit the summer she turned 18.

The University of Waikato nursing student said the six weeks she spent on the benefit were “amazing”.

“It made me much less anxious about my finances through that time where I was already dealing with a lot with my health, and it helped me get a little bit of my life together.”

At the time she went on the benefit, Sarah had moved out of her hall of residence but says she could not receive student loan payments to support her living costs in between semesters.

She said her health issues left her in pain and unable to work part-time, but she also wasn’t eligible for the disability benefit.

“I’m very grateful for the benefit for being able to help me through that time.

“It helped take a lot of stress off of me when I didn’t need that stress.”

Taxpayers’ Union spokesman James Ross said the union is welcoming the decision to limit access to the benefit but is questioning why the change will be implemented in July 2027.

“Getting teenagers off the couch is a good idea so why wait two years?

“We need to be realistic about what we can afford as a country. Taxpayers shouldn’t be stumping up to support school leavers who simply don’t want to work.

“Those 18- and 19-year-olds who need support can still get it – that’s not changing. So why are taxpayers stuck paying millions for people who don’t need it?”

Aaron Hendry – a co-founder of Kick Back, a youth development organisation responding to youth homelessness – said he’s concerned about means testing the benefit against parental income.

He said families are struggling because of the cost-of-living crisis and may not be able to support their 18- and 19-year-old children.

In other situations, rangatahi may not be able to get support from families because relationships have broken down.

“[Young people are] going to be at risk of staying in situations where they are unsafe or with their risk of exploitation because they can’t get access to the benefit,” he said.

Hendry said 18- and 19-year-olds are expected to be adults within New Zealand society who may have moved out of home.

“And yet now we’re saying ‘well, no actually, you still need to be cared for by your parents’.

“It doesn’t appear to be a coherent argument.”

Hendry said the rangatahi he meets are unemployed because they’re struggling to access housing, they’re dealing with trauma and mental health challenges, and they cannot access healthcare.

“No young person I know doesn’t want to get work,” he said.

“This is a Government that says that they’re against heavy bureaucratic public services and what they’re doing is creating more bureaucracy for some of our poorest people.”

Upston said young people who require support from the Ministry of Social Development will still be able to access it.

“For instance, in some cases 18- or 19-year-olds may not be able to rely on parental support. If they meet all other relevant eligibility criteria, they will be able to access some supports.

“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.”

Under-20s who are married, in a civil union, or a de facto relationship will not have their parents’ income factored into their benefit eligibility.

“This Government recognises that the welfare system should be available for those that need it. However, we aren’t willing to watch young people get stuck on the benefit.”

A parental income test is already in place for student allowance payments, which is a form of government assistance that some tertiary students get which they do not have to pay back

If you’ve moved out of home but your parents jointly earn more than $137,187.86 while you’re studying, you can’t get a student allowance at all.