Many tipped to move to ‘far too low’ jobseeker support
WELLINGTON: A total of 7538 people came to the end of their Covid19 income relief payment (CIRP) in the week ending September 4 .
The scheme — which runs for a 12week period, and supports those who lose their job due to the pandemic — has been running since June 12.
Data provided by the Ministry of Social Development (MSD) shows while 1414 people were granted the relief payment, that was far outweighed by the number of people who came to the end of their threemonth stint.
With thousands of people unable to find work, it is assumed many will be moving across to the jobseeker support payment.
That means a dramatic drop in income.
‘‘They go from a payment of $490 a week, down to $251 if they’re a single person,’’ Institute for Governance and Policy Studies senior research fellow
Michael Fletcher said.
‘‘That’s a very large drop, and what it shows up, to my mind, is the Government hasn’t addressed the fundamental problem with the benefit rate being far too low.
‘‘At the beginning, when they brought in this shortterm thing . . . you can say, well that’s to allow people to adjust.
‘‘But they haven’t dealt with the real problem, which is that benefit rates are very low, only 25% of the average earnings for a fulltime worker, and $250 is all people are going to have.’’
He said there was an urgent need to reform the benefit, and warnings had been issued since the beginning of the pandemic.
Over the same week (ending September 4), just 138 people cancelled their CIRP because they found work.
It is the first time the number of people coming off the CIRP has exceeded those going on to it. In the previous week (ending August 28) 24,811 people were receiving the CIRP, but that number is down to 18,608.
The previous week, just 162 people cancelled because they had found work, and the week before that, the number was 193.
Nearly 3000 people signed up for the jobseeker support payment over the week as well, although roughly 1300 people left it because they found work. It means the total number on the benefit is now 198,929.
A previous report by the MSD found the number of people who went on the benefit during the Level 4 lockdown skyrocketed.
‘‘There are still jobs out there, so yes, I was a bit surprised there wasn’t [more] flying off the Covid payment back into the job, and that’s not very encouraging,’’ Dr Fletcher said.
‘‘That’s a lot smaller than the number of people whose CIRP has finished and who are now going to be moving on to jobseeker support.’’
The data from the MSD also showed 60% of all jobs being supported by the wage subsidy were on their third and final round of the scheme.
In total, 375,447 people have their jobs backed by the scheme, of which 259 are on the original wage subsidy, 149,944 were for the extension wage subsidy, and 225,244 were for the resurgence wage subsidy.
The third and final round was available for firms to apply for between August 21 and September 3, and lasted just two weeks.
In total, $13.9 billion has been paid during the scheme’s existence. But with no more opportunity for businesses to apply, there is uncertainty over what awaits businesses and employees when the subsidy finally ends.
In a statement, Social Development Minister Carmel Sepuloni said: ‘‘This is a onein100year shock and we always said we would not be able to save every job, but we are making sure we are cushioning the blow for households and families by increasing support for people not in work.’’
The CIRP scheme was intended as temporary payment financial assistance to minimise disruption for people made unemployed by Covid19, she said.
‘‘Lifting families and individuals out of poverty is important to us as a government. I recognise the significance of income adequacy for beneficiaries in order to achieve this and that’s why it has been a core part of our programme to overhaul the welfare system.’’ — RNZ