A weekly income relief payment for the newly jobless will provide a lifeline, says a Tauranga man who lost his job last week.

But Tauranga's mayor says more economic stimulus is needed as the relief packages offer survival, but will run out.

The Government yesterday announced a $570 million scheme for temporary income support payments to New Zealanders out of work because of the pandemic.

Fulltime workers will be eligible for $490 a week and part-time workers will get $250, which is also available for students. Both payments are paid tax-free and only available to residents and citizens.

Finance Minister Grant Robertson said the payment should help the newly jobless adjust and find new employment or retrain.

The amount was worked out based on roughly how much the wage subsidy scheme was after-tax.

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 $570m which incorporates $1.2 billion of payments offset by $635m of saved benefit payments, with small administrative costs.

Migrant workers will not qualify for the payment and continue to only be able to access support through Civil Defence.

It will be funded from the Covid Response and Recovery Fund.

Tauranga man Christian Grey lost his job of two years as a delivery driver last week after working through level 4 to level 2 as an essential service.

The company he worked for had to make cutbacks as a result of Covid-19.

"Now I'm left looking for work at a time where there isn't much out there."

He said the subsidy would help pay for the bills while looking for another job.

• Covid19.govt.nz: The Government's official Covid-19 advisory website

"I'll get back on my feet eventually but this stimulus is a necessity until that happens.

"I have an interview for a part-time position at a rubbish collection place."

He has also, for the first time in his 39 years registered on the job seeker website.

"It will be hard having to start all over again from scratch and having to work my way up the proverbial ladder again."

Tauranga mayor Tenby Powell said relief initiatives were like Red Cross relief packages - essential, but work to stimulate the economy needed to begin sooner rather than later.

"It's purely for survival ... they're going to end soon. They're not sustainable."

He said he commended the Government on all the relief initiatives and said what was being provided was crucial, but said relief would not stimulate the economy.

He said immediate economic stimulation was needed, particularly for small businesses.

On Sunday, Minister for Building and Construction Jenny Salesa announced the scrapping of building consent requirements for "low-risk building work", which includes sleepouts, sheds, greenhouses, carports, awnings and water storage bladders, which will save Kiwis up to $18m a year.

Powell said it was initiatives like these, and shovel-ready jobs, which needed to be continued.

"We've got to get going faster on these shovel ready jobs," he said.

"We've got to see a continuation of the reduction of red tape."

Tauranga Budget Advisory manager Shirley McCombe said financial stress impacted mental and physical wellbeing, damaged relationships and contributed to family violence.

"Anything that can help alleviate this can only help our recovery."

McCombe said people made commitments based on their income, and the sudden loss of some or all of that income will leave people with mortgages, rent, loans, and credit card debt that they can no longer afford.

Her only concern about the fund was that it was short term assistance and she hoped people would use this time not only to job search or study but also seek professional advice on controlling their finances.

"We don't want to see people lose their homes or drown in debt."

She said it was tempting to ignore the problem and hope to secure employment before the support ran out.

"Even for those who can find employment, they have often loaded up credit cards or eaten into savings to bridge the gap."

Social Development Minister Carmel Sepuloni said the temporary income support payment would give people newly out of work "breathing space" when in normal times they might have been able to get a new job more easily.

She warned unemployment would get worse before it got better.

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, redeployment and training.