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Report Shows Way To Support Workers Suffering After Coronavirus Job Losses

The Government needs to look no further than the Welfare Expert Advisory Group’s report when considering how to effectively use the social welfare system to assist workers laid off due to the impact of the coronavirus (Covid 19), said FIRST Union President Robert Reid.

Mr Reid was a member of the WEAG, and FIRST Union represents forest and wood processing workers. It has been reported that forestry workers could be significantly affected by job losses due to the economic effects of the coronavirus’s spread in China and elsewhere.

"There has been considerable disappointment in the lack of Government action to the WEAG report on issues of benefit levels," said Mr Reid.

"This lack of action is also now affecting workers being laid off in the forestry, tourism, education, export and other industries."

"The call from the Minister of Forestry to eliminate the stand-down period before workers can get unemployment benefit is a good start but will not solve the main problem."

"The WEAG report called for the removal of all stand-down period for benefits, but also addressed the bigger problem that workers, although paying their tax every week, are not entitled to the unemployed (Job Seeker) benefit if their partner / spouse is also in paid employment."

"These days, it’s rare not to have both partners in a family relationship working - many have to just to make ends meet - but at the moment, if one partner is laid off, they are denied a benefit if their partner is earning."

The WEAG report said:

"Support for displaced workers is particularly weak. Compared with OECD practice New Zealand has an inadequate system for dealing with job loss, redundancy and labour market shocks (OECD, 2017). Redundancy pay is not required by law, the stand-down provisions between work and benefit entitlement see many workers and families plunged into poverty. In addition, eligibility for income support is based on family income, and workers may be ineligible for income support following job loss and redundancy if they have employed partners. This means a household can find itself losing more than half its income due to one partner losing their job but having no income support available though the benefit system. For many low wage families, two incomes are required to get by and cover rent and other living costs. To alleviate this problem, the Welfare Expert Advisory Group recommends that workers made redundant or who lose their jobs should be entitled to welfare support for 6 months without regard to their partner’s income (up to some cap, so that, for example, the first $48,000 of a partner’s income is disregarded). This would help families affected by redundancy where they have no (or too little) redundancy entitlement." (p 136)

Recommendation #37 in the WEAG report was to "Strengthen the Ministry of Social Development’s redundancy support policies to better support displaced workers." One key element of the detailed recommendation was to "establish a short-term (e.g. 6 months) benefit for partnered people who lose their jobs or incomes (e.g. due to redundancy)".

Mr Reid has written to key Ministers outlining the WEAG recommendations and urges an immediate change to Ministry of Social Development rules to enable all redundant and laid-off workers to be given short-term relief of the full benefit entitlement. The letter is attached.


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