The $25 weekly benefit increase for New Zealand's beneficiaries is "making a difference" during the COVID-19 crisis, Social Development Minister Carmel Sepuloni says - despite the contrast between the Government's $12 billion wage subsidy scheme and the support being offered to our most disadvantaged families.
In March, the Government announced its COVID-19 Economic Support Package, which consists of $8-12 billion in employee wage subsidies and $12-15 billion in finance and tax support. The employment wage subsidy provides $585.80 weekly for full-time workers and $350 for part-time workers for a 12-week period.
As part of the relief package, beneficiaries are receiving a permanent, $25 weekly increase to their benefit. This comes at a total cost of $2.8 billion, which also includes the doubling of the Winter Energy Payment - $1400 for couples and people with dependent children and $900 for singles.
Many community groups working with beneficiaries say the support is not enough to cover the additional expenses incurred during lockdown, such as increased food costs and bills associated with having children or additional family members at home.
Despite the calls for the beneficiary relief to become more equitable in comparison with the wage subsidy being offered to businesses, Sepuloni says the changes, implemented on April 1, are making a difference for the disadvantaged.
"I think that the April 1 changes made a difference in terms of indexation coming in... but also the $25 increase that we introduced - and things like dropping the Section 192 sanction that penalised women who weren't able to name the other parent of the child. Those things made a difference," Sepuloni said in an interview with The Hui.
"Beneficiaries, like the rest of New Zealand, are feeling very uncertain about what may happen. Food and security [uncertainty] is certainty being felt."
She reiterated that the wage subsidy scheme was implemented to keep New Zealanders "attached to their employers" and to provide a level of income certainty. While many have highlighted the disparity between $585 in employees' pockets and the $25 given to beneficiaries, Sepuloni says workers were not prepared to have their income, financial commitments and lifestyle jeopardised by a health crisis.
"I think the other lens that has to be put on this is that this happened so quickly and people had a level of income that they had no idea would be jeopardised... their rent, every other cost they were incurring, was based on that level of income that very suddenly was impacted with no real notice," she told The Hui.
"It was important that we tried to give them a level of income that would enable them to cover their everyday costs."
Is there any chance of support being readjusted 3.5 weeks in?
Sepuloni says income adequacy is still a consideration and is being evaluated in regards to Budget 2020. She also noted that the amount people can access through food grants has been increased.
"Just lifting that cap up to make it easier, [in recognition] that people may have children at home and there will be additional costs incurred... That was an immediate action to recognise the additional financial pressure families are under... I think with hardship grants, 90 percent of them were being granted within two days."
Ricardo Menéndez March from Auckland Action Against Poverty says even before the COVID-19 crisis, a lot of people were not getting sufficient food grants.
"A lot of people would not get sufficient food grants because their case managers used their discretion not to help people. Now that conversations only happen on the phone, there are so many more barriers for people to be able to access that assistance," he told The Hui.
In the last week, approximately 7000 additional people have become beneficiaries, with roughly an additional 10,700 taking up the benefit in the week prior.
"We are also working on redeployment efforts with our rapid response teams across the country, talking with industry partners about opportunities for people to step into employment - and work going on across ministries... to consider what might need to happen moving forward with redeployment, upskilling and training," Sepuloni said.
How will the MSD transition the newly unemployed to Jobseeker's benefits?
Anyone who is eligible will be able to apply. One of the requirements for the Jobseeker's Benefit is to be seeking some kind of employment - a clause which could be difficult to meet post-COVID-19. Sepuloni says the Ministry of Social Development (MSD) won't be "irrational" if employment opportunities simply aren't there.
"People can still seek jobs - if they can't find them because they are not there, then that's fair and reasonable. Many people coming out of work because they've lost jobs due to COVID are still going to want to find employment. We've got a responsibility to provide income support but also the support for them to step into employment elsewhere, or to take up upskilling and training that might support them to step into work elsewhere.
"We won't be unfair... if the jobs aren't there despite them looking, then that is what the welfare system is there for."
