The New Zealand government has introduced a new COVID-19 income relief payment alongside a possible future employment insurance program as the country begins to rebuild its economy after the lockdown.
The new scheme will be available for 12 weeks starting June 8 for anyone who has lost their job due to the coronavirus health crisis. It will pay $490 a week to those who lost full-time work and $250 to those who lost part-time work. The payment will not be taxed.
Finance Minister Grant Robertson said the Government’s priority is making sure people are able to find new work if their job was impacted by the health crisis.
“That’s why we made a $1.6 billion investment in the budget to help people retrain,” Robertson said. “The budget also invested to create practical jobs for New Zealanders through environmental work, construction and infrastructure.”
He said this payment will help Kiwis as they make these transitions.
Robertson said the government cannot save every job or every business but is investing to cushion the blow on households and businesses to make sure people are in the best position to respond, recover and rebuild.
He said the scheme is similar to the Job Loss Cover payment introduced by the previous Government during the Canterbury earthquakes and has a number of similarities to the ReStart package for workers who lost their jobs in the Global Financial Crisis.
“We know these schemes reduced the impact on people who lost their jobs due to those shocks,” Robertson said. “They show how important it is for people to have a safety net to support themselves and their families as they look for new work or retrain.”
BusinessNZ chief executive Kirk Hope said the Government’s new temporary payment scheme is a welcome boost.
“Providing this support will make it easier for people to retrain and upskill for their next job,” Hope said. “This means business can hit the ground running with staff who bring the skills that they need.”
Hope said the relief payment is a good interim step towards a more sustainable model but long-term thinking, such as a permanent unemployment insurance scheme, is critical.
Robertson agreed, saying that the Government has an opportunity to reset the safety net for working Kiwis.
“Around the world there are many examples of countries that created strong systems to cushion the blow of job loss through both income protection and retraining,” he said.
How the income relief payments work
People with partners who are still working may be eligible for this payment as long as their partner is earning under $2000 per week.
Receipt of the payment comes with expectations from the Government and responsibilities. People who receive the COVID payment will be required to:
• Be available for, and actively seeking, suitable work opportunities while they receive the payment
• Take appropriate steps towards gaining new employment; and
• Identify and take opportunities for employment, re-deployment and training.
Students who have lost part-time work as a result of COVID-19 may also be eligible for the part-time rate.
The 12-week scheme is forecast to cost about $570 million. This incorporates $1.2 billion of payments offset by $635 million of saved benefit payments, with small administrative costs.
