Redundant recruitment co-ordinator Leah Pao is overjoyed at a new $490-a-week "income relief payment" that will more than double her income on the dole.

"I think it's amazing, especially for me," said Pao, 29, whose job with Qantas ended suddenly on April 3 after only nine months in the job.

"I was going from a salary, which I was really privileged to get, and what I'm on now is like a third of what I was getting, so the $490 will definitely help," she said.

But Tina Barnett, 56, whose job as a table games supervisor for Sky City will end on June 19 after almost 17 years, will miss out on the new payment because she is getting a redundancy payout of more than $30,000.

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The Government estimates that about 230,000 people who lose their jobs due to Covid-19 between March 1 and October 30 this year will get either the $490 a week fulltime payment or a $250 a week part-time payment for 12 weeks at a cost of $1.2 billion.

Finance Minister Grant Robertson said the new income relief payment was not welfare - it was a temporary payment similar to what happened after the Canterbury earthquakes.

It was available for up to 12 weeks and was designed to help people get back into work.

"It's...a form of the social insurance you see in other countries," he told Newstalk ZB's Mike Hosking.

There was policy work under way on whether there should be social or employment insurance in New Zealand, as was available in Scandinavian countries and Canada.

The $490 a week gave people time for adjustment and to plan their next steps following a "sharp income drop".


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Auckland Action Against Poverty advocate Brooke Fiafia welcomed the payment, which is "individualised" - you can get it if you lose your job even if your partner is still working, as long as they don't earn over $2000 a week.

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"This is a breakthrough because it's individualised. This is exactly what we've been campaigning for," she said.

Brooke Fiafia:
Brooke Fiafia: "This is a breakthrough because it's individualised. This is exactly what we've been campaigning for." Photo / Supplied

But the payment also creates what Fiafia described as "two-tiers of unemployed - those deserving of liveable incomes and those who do not".

All 305,000 people who were on benefits on February 29 will stay on normal benefit rates, which are $250.74 a week for a single adult aged 25 or over such as Leah Pao or $375.17 for a single parent with children such as Tina Barnett.

The new $490 payment for 12 weeks is only for NZ citizens or permanent residents who were working at least 15 hours a week, lose their jobs due to Covid-19 between March 1 and October 30, don't get more than $30,000 in redundancy pay and don't have a partner earning over $2000 a week.

"The Government is creating a two-tier welfare system where the newly unemployed receive higher incomes than those on main benefits who live below the poverty line," Fiafia said.

"It is a slap in the face for the hundreds of thousands of people on a benefit who rely on food grants to survive because their benefits do not cover basic expenses.

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"We are calling on the Government to individualise all benefits and permanently increase them to put them at least in line with the income relief payments."

Leah Pao expects to qualify for the $490 a week Covid income relief payment from June 8 after losing her job as a Qantas recruitment coordinator. Photo / Supplied
Leah Pao expects to qualify for the $490 a week Covid income relief payment from June 8 after losing her job as a Qantas recruitment coordinator. Photo / Supplied

Pao had only recently moved into recruitment work with Qantas after six years managing a retail store, but found she was good at it and wants to find a new job in the same field.

"I was doing so well, and then Covid happened, and because I was in the aviation industry we were the first to be affected," she said.

"It's the first time I've been on unemployment and it's hard. I'm paying $200 a week rent, and the benefit that I get pretty much just covers my rent, so I'm dipping into my savings."

Leah Pao has to spend most of her jobseeker support payment on rent; the new Covid payment will mean she won't need to eat so much into her savings. Photo / Dean Purcell
Leah Pao has to spend most of her jobseeker support payment on rent; the new Covid payment will mean she won't need to eat so much into her savings. Photo / Dean Purcell

However she hopes to find a new job before the 12-week Covid relief payment ends.


Tina Barnett, a Unite Union delegate at Sky City, felt tossed around by the news of the relief payment.

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"When I heard about it, there was a sense of relief," she said.

Tina Barnett will miss out on the Covid relief payment because Unite Union negotiated a redundancy package for her after almost 17 years with Sky City. Photo / Supplied
Tina Barnett will miss out on the Covid relief payment because Unite Union negotiated a redundancy package for her after almost 17 years with Sky City. Photo / Supplied

"But then there was disappointment when I found out it was capped at $30,000 in redundancy payments. That just shattered me, because now I don't qualify."

Barnett still supports a 16-year-old daughter and before Covid she had two sons aged 17 and 18 at Tangaroa College in Ōtara. They have now left school.

"When finances were getting tough, they chose to go and work to help Mum out. They managed to become labourers on construction sites," she said.

Tina Barnett:
Tina Barnett: "When I heard about it, there was a sense of relief. But then there was disappointment when I found out it was capped at $30,000 in redundancy payments." Photo / Supplied

She is now thinking of leaving Auckland to find cheaper housing, and may look for work in a social field such as employment support.

Wellington music student William Lopez Sanchez, 23, expects he may qualify for the $250-a-week part-time Covid relief payment because the Lambton Quay Burger King where he worked for about 20 hours a week has closed down.

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He also borrows about $250 a week for living expenses through the student loan system, and pays $210 in rent, so the relief payment will be a welcome bonus.

"It won't exactly replace what I had before, but I can make do on it without struggling," he said.

William Lopez Sanchez:
William Lopez Sanchez: "It won't exactly replace what I had before, but I can make do on it without struggling." Photo / Supplied

Chief executive of Community Law Centres Sue Moroney said it was disappointing the Government hadn't used the opportunity to address migrant workers who'd lost their jobs but couldn't access any support.

"Every week that goes by, migrant workers just have their basic living costs covered but no income support. It's a developing humanitarian migrant crisis that no one wants to see on our shores.

"It's inexplicable why the Government hasn't done anything on this."

Moroney is calling for the Government to use Section 64 of the Social Security Act to grant emergency benefits to people otherwise not entitled to them while an epidemic notice is in place.

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Covid relief payment Q&A

Q. What is the new payment?

A. It's a temporary payment of $490 a week for someone who loses a fulltime job of 30 hours a week or more due to Covid-19, or $250 for someone who was in a part-time job working 15 to 29 hours a week.

It will be available for 12 weeks to anyone who loses a job between March 1 and October 30, with the first payments available from June 8.

Q. Who can get it?

A. NZ citizens or permanent residents who don't get more than $30,000 in redundancy pay, didn't have income protection insurance and don't have a partner earning at least $2000 a week.

Q. What are the obligations?

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A. Recipients must:

• Be available for, and actively seeking, suitable work;

• Take appropriate steps towards gaining new employment;

• Engage with suitable work programmes and courses and identify and take opportunities for employment, redeployment and training.

Q. What will it cost?

A. $1.2 billion gross, or $570 million net after deducting what people would have received on normal benefits.

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Q. How do you apply?

A. Apply online on the Work and Income website from June 8.