In early 2020 New Zealand faced its largest public health challenge in over a century - Annual Report 2019/20

COVID-19 has significantly impacted the labour market, with an expected economic downturn causing higher levels of unemployment and financial hardship for many families. This has affected many individuals, whānau and communities who have needed to come to us for help for the first time.

Our client base has changed, and a more diverse range of people are needing our assistance:

current and known clients (including students and superannuitants) – about 353,000 beneficiaries, 809,000 superannuitants and 309,000 students
those who have come into contact with us through the Wage Subsidy programme and other COVID-19 support (more than 1.7 million jobs supported)
those who have recently become unemployed but have never previously sought our help (in addition to those who have had to apply for a benefit for the first time, more than 10,500 people received COVID-19 Income Relief payments).

We played a pivotal role in the Government’s response to the COVID-19 pandemic, providing an essential and integrated service, including advising the Government, in response to unprecedented levels of demand for income, housing and employment assistance.

As an essential service we mobilised our 8,000 staff to deliver the support New Zealanders needed, at pace, while continuing to provide our usual business. We:

set up processes and programmes to help the Government to implement its response package
began working with thousands of people who had never needed to access the social assistance system before
redeployed staff to areas of priority work, such as processing applications for financial assistance through the Wage Subsidy and other assistance – as Alert Levels changed, we balanced this work against other business-as-usual work such as providing other ongoing assistance, while staff from other government agencies were also redeployed to help us
adapted business processes and systems to make it easier for people to get the support they needed quickly, by phone or online
had a large number of frontline staff undertaking processing, call centre and case management from home at the peak of the nationwide lockdown, and we established a 60-seat call centre in our National Office to provide back-up services for the regions and to process wage subsidies
brought forward some planned technology enhancements to make the welfare system more responsive to the extra demand, such as improvements in our digital services and allowing staff more flexibility to work remotely.

While expanding our service provision to help vulnerable New Zealanders during and following Alert Levels 4 and 3, we continued to provide our regular services over the phone and online. These core services include financial assistance (such as benefit payments, New Zealand Superannuation and student assistance), housing support, employment and youth services, training and education, and community partnerships. We maintained our focus on keeping our clients’ wellbeing at the heart of all we do – ensuring people have a positive experience when they get in touch with us, helping people access emergency and transitional housing as they need it, and providing full and correct entitlements to income support.

Our immediate response to COVID-19 aimed to lessen the economic shock on people’s lives

In February 2020 the Government asked us to provide advice on and to deliver a scheme to provide wage subsidies to employers and self-employed people, to maintain incomes and to keep as many people as possible in work, taking a high-trust approach. The Wage Subsidy scheme was announced on 16 March 2020 and we made the first payments to employers the next day [1].

COVID-19 response to June 2020:

Almost $12.2 billion Wage Subsidy payments
for 1.7 million jobs over 234,600 self-employed people.

We made payments promptly so we could get support to employers as quickly as possible. This helped to minimise the economic impact during the periods when Alert Levels 4 and 3 severely curtailed economic activity.

We worked with Inland Revenue to establish a system of pre-grant checks to ensure payments were only going to genuine employers and self-employed people, but we also set up a programme of random and targeted post-grant audits to ensure that businesses were claiming the Wage Subsidy correctly.

By 30 June 2020 we had:

completed 7,481 random and targeted internal audits [2] – 7,115 of these had been resolved, with 512 cases allocated for investigation
received 2,750 allegations of improper use of Wage Subsidy funding, and had resolved 1,439 of these
received refunds of about $229 million from more than 7,700 employers – of this, nearly $223 million was repaid voluntarily by over 7,400 employers.

To understand the impact of COVID-19 and what ongoing support would be required, we surveyed all businesses that received the Wage Subsidy up until 15 May 2020. We will use the information collected from this engagement to inform decisions about future policy development and decisions.

Of the 90,000 businesses that responded to the survey (equating to a 25 percent response rate [3]), 79 percent said they benefited "a lot" from the Wage Subsidy and 89 percent said it meant they would be able to keep operating for the foreseeable future [4].

In the first 20 working days when the Wage Subsidy was available (18 March to 16 April 2020), we made 403,849 payments totalling over $9.9 billion - an average of 20,192 payments and $495 million per day.

We were also asked to design a Leave Support scheme to allow essential businesses to pay employees who were unable to work because of Ministry of Health guidelines, were in self-isolation, or were unable to work from home. The Government commissioned this scheme on 1 April 2020 for launch on 6 April. We successfully achieved this objective by making the first payments to employers on time. The scheme was expanded on 1 May to cover all employers and sole traders, not just designated essential services.

Up to 30 June we had received over 26,000 applications for Leave Support payments and paid out more than $85 million. These payments enabled people who were unable to work during lockdown to continue to be paid without using up their leave entitlements for the year.

The COVID-19 Income Relief Payment helped people manage sudden job losses

As part of the COVID-19 recovery package, the Government introduced a payment designed to minimise the disruption of sudden job loss and to give people time to look for other employment opportunities. The COVID-19 Income Relief Payment (CIRP) was available from 8 June 2020 and provided up to 12 weeks of payments ($490 a week for those losing a full-time job and $250 a week for part-time, not taxable).

The CIRP was set at levels higher than Jobseeker Support as most of those needing this payment had lost their jobs at very short notice and would have been unprepared for this change in circumstances.

The payment applied to those who lost their job because of the COVID-19 impact between 1 March and 30 October 2020 [5] These payments meant people were able to avoid going straight on to a benefit.

COVID-19 Income Relief payments paid by 30 June 2020:

10,947 payments
$14.7 million paid out

We implemented other welfare system changes and provided additional student support during COVID-19

These included:

helping support tertiary students by increasing the limit on student borrowing and making repayments more flexible
providing advice on and implementing changes to the welfare system related to the welfare overhaul work programme, including:
- an increase of $25 a week to main benefits from 1 April 2020
- doubling the Winter Energy Payment for the 2020 season (May to September)
- the temporary removal of stand-down periods at benefit grant (this provision will remain in place until July 2021).

COVID-19 caused a surge in Jobseeker Support numbers

Just over 190,000 people were receiving Jobseeker Support at 30 June 2020 – an increase of 39.8 percent from the previous year and 25.5 percent in the last three months of the year (1 April to 30 June 2020, which included most of the period when the country was at Alert Levels 4, 3 and 2). The April to June period accounted for more than 71 percent of the full-year increase.

The following charts show the numbers of benefits as at 31 March and 30 June 2020 in the three main categories, broken down by recipients’ ethnicity.

Jobseeker Support

30 June 2019

Total: 136,233
European: 48,498
Māori: 52,697
Pacific: 10,952
Other: 19,144
Unspecified: 4,942

31 March 2020

Total: 151,745
European: 52,991
Māori: 59,417
Pacific: 12,312
Other: 20,811
Unspecified: 6,214

30 June 2020

Total: 190,456 (+39.8% on June 2019; +25.5% on March 2020)
European: 67,180
Māori: 70,896
Pacific: 15,893
Other: 26,986
Unspecified: 9,501

Sole Parent Support

30 June 2019

Total: 59,263
European: 17,011
Māori: 28,204
Pacific: 6,411
Other: 6,062
Unspecified: 1,575

31 March 2020

Total: 60,983
European: 17,211
Māori: 28,944
Pacific: 6,778
Other: 6,307
Unspecified: 1,743

30 June 2020

Total: 64,029 (+8.0% on June 2019; +5.0% on March 2020)
European: 18,131
Māori: 30,044
Pacific: 7,146
Other: 6,749
Unspecified: 1,959

Supported Living Payment

30 June 2019

Total: 92,856
European: 45,680
Māori: 23,894
Pacific: 6,056
Other: 13,528
Unspecified: 3,698

31 March 2020

Total: 93,861
European: 45,793
Māori: 24,407
Pacific: 6,025
Other: 13,409
Unspecified: 4,227

30 June 2020

Total: 94,144 (+1.4% on June 2019; +0.3% on March 2020)
European: 45,782
Māori: 24,477
Pacific: 6,081
Other: 13,417
Unspecified: 4,387

Footnotes

The scheme was originally announced as a 12-week programme, ending on 10 June 2020; however, in the Budget on 14 May the Government announced an extension of the scheme for a further 12 weeks, with a new end date of 1 September 2020. On 17 August the Government announced a further programme to provide assistance in relation to the resurgence of COVID-19 in the community. Return to text
These include both pre- and post-payment audits. The audits were carried out by MSD with the support of investigations teams in Inland Revenue and the Ministry of Business, Innovation and Employment, rather than by an independent auditing agency. Return to text
Ipsos, the independent market research company commissioned to manage the survey, has informed us that by New Zealand research industry standards this is a high response rate for an online business survey. Return to text
A topline report on the survey findings is available on the MSD website. Return to text
People who lost their jobs after 1 March 2020 went on to Jobseeker Support before the CIRP became available, but were later eligible to transfer to CIRP. Return to text