New Zealand government's cutbacks on subsidies for disabled workers could mean disabled people losing their jobs

From Manawatu Standard in New Zealand:

A Government crackdown could see some people with disabilities lose their jobs because employers could no longer afford to keep them.

The productivity allowance provides a 50 per cent subsidy for employers who take on a person with a disability, to compensate for lower rates of productivity by helping cover wage costs.

But plans to phase out the fund have Manawatu businesses and recruitment agencies concerned people will end up on the invalids benefit instead of working.

Phoenix Recruitment chief executive Janice Gordon said it was a "double whammy" for good employers in Palmerston North.

"There are a number of employers who give physically and mentally disabled people these opportunities out of the goodness of their heart, and would love to be able to keep them on. But we're in a recession and phasing out the fund can really stretch a business."

Mrs Gordon confirmed there was at least one person in Palmerston North likely to lose their job when the funding is phased out, and she believed more would follow.

Manawatu is one of the leading regions for the employment of people with disabilities.

Last year there were 885 employers receiving the subsidy nationwide and 196 of those employers were in the Manawatu area – almost double the number in wider Auckland.

There were 236 people with disabilities employed in Manawatu last year, more than 20 per cent of the national disabled workforce.

Almost $5.7 million was handed out nationally under the scheme, with Manawatu employers accounting for almost 20 per cent at $1.1m.

Palmerston North Labour MP Iain Lees-Galloway said he would discuss policy alternatives with his caucus.

"It's a bit complicated, because when Labour initially brought the fund in under the job supplements scheme, it was always supposed to abate over time – about 10 per cent a year. But there is definitely a policy gap between what is needed and what is happening that needs to be discussed and possibly changed."

Mr Lees-Galloway said it was unreasonable to expect someone who was working with a severe disability to be as productive as an able-bodied person.

Government pressure to get people off the productivity allowance would result in more people being placed on the invalids benefit, said Mr Lees-Galloway.

Ministry of Social Development regional commissioner Penny Rounthwaite said changes were designed to make more money available to fund other employment opportunities for people with disabilities.

Rather than saving the ministry money, Ms Rounthwaite said the aim was to make more money available to help more people with disabilities get work and to support them.