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Benefit numbers jump due to Covid-19 crisis

Latest figures released today show a jump in people on benefits compared to last year.

by Anna Whyte and Brodyn Knuckey

Source: 1 NEWS

The Ministry of Social Development (MsD) has received a huge increase in applications due to Covid-19, and has seen benefits increase by 8 per cent. 

During today's Epidemic Response Committee discussions, Minister of Social Development Carmel Sepuloni spoke about the benefit increase while also discussing the unemployment rate.

Releasing data up to March 27, two days after the nationwide lockdown began, benefits had a monthly increase of 4866, with the yearly change up 23,545 compared to the same period in 2019.

Overall, 309,995 New Zealanders were receiving a main benefit as of March 27, 2020. 

Last week, MsD received 22,500 benefit applications, which some Ms Sepuloni said were duplicate applications and some people may not be eligible for those benefits applied for. 

"Last week around 10,700 benefits were granted, the majority of those were job seeker benefits," she said.

Of the unemployment projections, Ms Sepuloni said "you can expect an increase, that's for sure". 

It was expected Treasury would release unemployment forecasts next week. 

Pushed on releasing these projections or an idea of the projection by committee chair Simon Bridges, Ms Sepuloni said she did not think it was "in the public interest to put out information that is vague... to pick figures out of the air". 

"You've only got a week to wait for forecast figures from Treasury."

She said unemployment would be determined by how successful New Zealand was coming out of lockdown, but said it could be between five per cent and "low double digits". 

Last week, Treasury's Caralee McLiesh told the select committee they were still finalising projection numbers but Covid-19 would
cause a "severe and negative contraction in the economy".

New Zealand's unemployment rate sat at four per cent for the December 2019 quarter, according to Stats NZ. 

Last week, Finance Minister Grant Robertson told TVNZ1's Breakfast that figure would definitely rise.

"It'll be far more than four per cent because that's the unemployment rate that we've got now," Mr Robertson said at the time.

"When we had the global financial crisis, it hit around 6.7 per cent - it'll be more than that.

"I've seen predictions ranging between eight per cent and 30 per cent and I think all that tells you is that making predictions is really, really hard at the moment.

"I don't have numbers at the top end of that - we're still finalising what we think those numbers will be - but there will definitely be more people unemployed."

Ms Sepuloni also told the committee today 11,500 people over 70-year-old received phonecalls from MsD as of April 7.

She said most people were doing "OK" with adequate support networks, however 140 people were referred to support networks with three needing emergency support.