Number of people on Jobseeker Support increases by 16% in a month; Rise dampened for now by Wage Subsidy supporting 60% of workforce

Number of people on Jobseeker Support increases by 16% in a month; Rise dampened for now by Wage Subsidy supporting 60% of workforce

Nearly 18,000 people became beneficiaries in the two weeks to April 10.

Ministry of Social Development (MSD) data shows the number of people on main benefits increased to 327,763.

Of these people, 167,639 were on Jobseeker Support. The number on this benefit increased by 6,424 in the week to April 10 and by 9,470 in the week to April 3.

The number of people on Jobseeker Support was 16% higher as at April 10, compared to a month prior.

As at April 10, 5.6% of the working-age population was receiving Jobseeker Support, compared to 4.9% at the beginning of the year.

Single people on Jobseeker Support receive $251 a week, couples receive $401, couples with children $428 and solo parents $375.

By way of comparison, jobless claims in the US have soared.

The 12-week Wage Subsidy is keeping people connected to their jobs for now, and is likely slowing the increase in the number of people forced to go on Jobseeker Support. The Government is yet to unveil what support will follow this 12-week period.

MSD has paid out $9.9 billion in wage subsidies to support 1.6 million people as at today - April 17. Around 60% of people in employment are being supported by the Subsidy.

The application decline rate increased to 5.4% in the week to April 10 from 3.5% the week prior.

More has been paid out in Wage Subsidies to large and medium-sized businesses, than small businesses and sole traders.

The number of Special Needs Grants for food, distributed by MSD, more than tripled from the week to March 13 to the week to April 10, to 69,905.

Meanwhile the number of Accommodation Supplements distributed grew by 5% over this time to 327,360.

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52 Comments

Wow that is a lot of bene's.

Makes you wonder how many investment properties we can really justify subsidising eh, as a country.

No problem just give them 10k to invest in the NZX seems like they will make plenty at moment even AIR heading back towards $2.00.
I have a feeling this party is going to end soon and it aint going to be pretty.
I would be interested to know how many new stock trading accounts have been opened duringh the last 2 weeks.
I saw one story overseas and the numbers of new investors flooding the market is very very high.

Just as in the US, if you give someone a cash grant or a tax deduction and there is nothing else you can do with it the best place is the sharemarket (can't put it in the Pokies because they are shut).
But it defies logic and any sense of rational assessment that the sharemarket would keep rising under these conditions, this coming year is going to be an unmitigated disaster but blind optimism seems to trump logic every time.
The crunch will come soon enough.

Our son in the US thinks a lot of folks will use their $1,200 one-off payment as a deposit on a new truck :-).

Those new F350’s are pretty nice though !:)

I kind of feel sorry for people buying in to this market but at the end of the day a good lesson for people to not be too greedy.
This market looks to be a good story for a movie/docu in 5 years.

Yip - I'm a member of a number of investor type facebook groups (never post, just monitor to see what is going on). There have been a lot of people the last month saying 'I just opened a trading account with hatch/sharies/asb/directbroking... never invested before, what should I buy'. And yes AirNz is one of those being suggested...

IO samez. And many of them n00bs and asking "i've never bought shares before, what platform do you recommend etc". Even office mates asking if its a good time to buy shares! Never seen those kind of OPs before but the FB groups have been full of them.

Are you on Kiwi Mustashians per chance?

Getting close to going short on some of these tourism stocks on NZX.
People must think every Kiwi is going to spend up big on holidays for the next 3 years.

Its all par for the course, every bear market pretty much plays out the exact same way. "Denial" that there is a fundamental problem leads to people buying, which creates the bull trap, and soon people will start thinking that everything is "returning to normal". Then the real bear market starts.
https://miro.medium.com/max/1400/1*y-TzpqCFHM6HlkbNKTfphQ.jpeg

Add to that the fact that most new investors (and many existing ones who should know better) think that Air NZ and Auckland Airport are great businesses to buy, simply because their stock price has fallen. They do not seem to understand what the result of having no cashflow for an indeterminate time will mean to their shareholding (capital raise required) or that both these businesses will end up government owned and they will lose 99% of their money. If anything, Facebook has taught me how many people out there are of very limited intelligence, so trying to explain to them what happens when the Govt converts their $900m loan to equity is like attempting to teach a pig to sing.

The Denial over on the property investors forums is equally strong. But it might pay to remember that during the Great Depression house prices fell 80%. The big NZ population ponzi is over, there will be negative immigration for some time and this combined with 26% unemployment, is going to see the housing market crash. The dole isnt enough to pay those $500k mortgages so forced sales will start as soon as the real estate market is allowed to function again.

Just look at that upwards trend starting end 2017 til just now before the big leap up...

Yip, turns out Labour is an honest government, they recognise that when people don't have a job and have no other way to get money, they don't cease to exist like National imagines they do, and refusing to pay them money doesn't actually make their lives any better.

National's methods are how you get entrenched poverty between generations.

See below.

Yes totally agree. Even the UK is having to extend its Government support to keep people employed rather then allowing them to be discarded in the short term. That way they'll be able to get back on their feet as soon as the virus lockdown is lifted. I heard recently that the UK has increased its lock down for another three weeks. BBC Coronavirus: Salary subsidy scheme extended into June (In the UK). "The government pay scheme for workers who have downed tools but remain employed has been extended". https://www.bbc.com/news/business-52323918

Just look at that upwards trend starting end 2016...

Your point?

Woah. Excellent ammunition for the next National Party facebook post on rising unemployment under Labour's watch.

Not really. I think it is a little bit early. So far Robertson and his team has done pretty good work on trying to ease the pain. A lot of the pain they caused by closing everything, but a lot of the pain was also inevitable. It all depends on Level 3 and how long that takes. Much of that is in the hands of Dr. Bloomfield.

Good to see the welfare system keeping the residential 'free' market at its frothy highs.

We certainly seem to have managed it much better than the US. Here's a link announcing the temporary additional $600/week which is added to unemployment benefits. The standard benefit pays weekly 1% of previous yearly income - so $20K income pays $200/week; $30K pays $300/week; and so on. Now due to COVID another $600/week is added to that. Meaning, for all salaries below $70K per annum, an individual is better off - and in some cases much, much better off - if unemployed.

It's very, very weird.

https://www.krtv.com/rebound/coronavirus-money-help/temporary-weekly-600...

$'s will be handed out on perforated rolls soon.
May as well be toilet paper the way they keep printing it.

For those companies that are able to resume and re-employ staff that they received the 12 week job retention subsidy. If we go to level 3, what happens to the balance of the 12 week subsidy that was paid up front for staff that will then be working and receiving income? Do the companies have to pay it back?

I wondered the same, but I doubt there would be a claw back. To hard to administer and in most cases, one wouldn't expect the businesses to go back to normal ops and/or trading straight away.

Quite a hand out. Some will do very well in that case as they will be able to pretty much able to launch into full production within a week or so.

It's all right there. If you will lose 30% or more over the next 3 months you are eligible.
Well if you had a month off that is 30%.

I don't get this one: "Special Needs Grants for food" tripled in 4 weeks. I'm assuming this is not purely to those on benefits right? Because their needs should have been met by their benefits. Is this accessible for people on wages/wage subsidies as well?

Perhaps there's nothing left after they pay the rent and bills?

On that topic, DFA was saying mortgage/household stress in AUS is rising rapidly.

Ozzy in for a world of pain and the locals don't know what money pain is. Throw those together and it gets really messy.

Yes it is. When I first left tertiary study I found myself in a bit of a gap with no income, was only a few weeks as I had a job lined up but enough to create a problem with my meagre savings. The week before my first pay, after paying rent and other bills I had nothing left for food. I walked into Winz and provided them with bank statements/contract etc and told them my story. Asked if I could have a $40 food grant to tie me over, they gave me $100.

This was in first week. They could be doing 3 x that many per week now. government picking up the bill council doing the legwork?

https://ourauckland.aucklandcouncil.govt.nz/articles/news/2020/04/phone-...

Sad situation but worse is yet to come despite wage subsidy (though helping for now) and will know once lock-down is over as many thing are in freeze mode at the moment, be it jobs, business or house price, which overall will have domino effect leading to disaster.

Taxcinda the worst PM ever! Sweden and Japan have a "death toll" of roughly a quarter of their annual flu deaths with no lockdown...

maybe instead of listening to hosking nonsense you should read the world news, Sweden has failed compare to their neighbours and many many of their top people are saying they need to close the place down as there deaths are outstripping their nieghbours and they are in danger of becoming the next itlay
"in an piece published today in Dagens Nyheter, the group of researchers from a range of top Swedish universities and research institutes make harsh criticism of the Swedish Public Health Agency and their present coronavirus strategy. They say that elected politicians must now intervene with "swift and radical measures."
Japan
The prime minister's coronavirus response has been criticized for being too slow and too lax.
Several local leaders had asked him to include their prefectures in the emergency, while others declared their own states of emergency, in rare moves underscoring their frustration with Abe

Abe just declared a whole country SoE;

https://www.bbc.com/news/world-asia-52313807

Sunchap.
You are talking about something that is not complete.
Infections aren't even even at a 10th of their population yet.
How many die in the 2nd and 3rd waves?
Thia is far from over.

Taxcinda, what a hoot! Except natz put tax up more.
GST much?

How much wages percentage before the bug event went into private, commercial rentals & to service the Banks loan? - During this bug event, the same percentage ratio are straight away contractually being paid to those 'essential services' - That's how the neoliberal socialising the loss, burden cost to be shared by all citizens, off course.. this time apart from pay cut, JA & Lab team, will have to change the tune of 'CullenCGT' - this time is for 'Covids contribution tax payment'.. by how much? 0.x %

japan now doing helicopter money
Abe also announced cash handouts of 100,000 yen ($1,560 NZD) for each of Japan’s 120 million citizens.

Queenstown news.

More than 5000 people have contacted the Queenstown Lakes District Council’s emergency operations centre requesting welfare assistance.

The scale of the challenge was unprecedented.

"It’s almost too big to comprehend, but at the council we are rolling our sleeves up and doing everything we can to support our community," he said.

https://www.odt.co.nz/regions/queenstown/many-migrant-workers-seek-assis...

It's a nice verbal promo, BUT what is never going to be mentioned is this: We keep our rates pie chunk/council, private/commercial landlords keep the regular rental payment, banks will keep the same loan payment - as all are 'under contractual obligation'. - 'Support community' here means - rolling the sleeves up to 'distribute the future overall tax payers' wages subsidy handout, direct to private/commercial landlords (via renters) and ensure banks got their borrowed loan repayment (via RE buyers/investors). - Cool eh?

Temporary workers need to be sent home ASAP. With 26% unemployment rate looming, its simply unconscionable that we keep employing migrants at the expense of New Zealanders.

Mean time many of them have been locked down for 4 weeks with no source of income, and no eligibility for assistance.

If they were on work visas and were employed prior to lock down, then they should be getting the $585 weekly wage subsidy from their employer. Of course if their employer was paying them cash/under the table because they were on tourist visas (i.e., not allowed to legally work), then there will be no wage subsidy, and yes, they should be deported for working illegally here and sent home.

Not only has China dodged blame for the pandemic, it is taking credit for dealing with it

What percentage of the workforce is employed by the government? If included in the workforce stats, it's likely the 60% supported by the subsidy is actually much higher when only private employees are accounted for.

Now is the time for government to work out how to absorb the newly unemployed from private sectors that can't recover quickly. The long term effects of unemployment and hysteresis effects are much bigger costs than the potential inefficiency of state employment projects. The dole is not the answer. It produces nothing of value for society and not enough income to prevent a deflationary spiral. A job guarantee at a living wage for the low skilled plus an expansion of public sector employment for those with valuable skills currently underutilized by the private sector.

The likes of Hillside workshops can ramp up very fast and is a big benefit for the country. Should never have been shut.

If a business' revenue is down 30% plus but it has $1million "cash reserves" in the bank is it entitled to apply for the wage subsidy, or must if first burn the $1million? In other words, is the subsidy "free money" for every business whose revenue is down or only those who have no "cash reserves" to carry them through the next few months?

Hi Jenee, Any chance we can see this data by region?