Salvation Army fears sudden drop into poverty for 'new group' of Kiwis once Covid-19 wage subsidy ends

August 4, 2020

Colonel Ian Hutson says a lot of people are going to struggle.

The Salvation Army fears there will be a sudden drop into poverty for many New Zealanders once the Covid-19 wage subsidy extension ends in less than a month.

More than one million New Zealanders received extra money from the Government in the initial wage subsidy, with a further 437,000 on the extended wage subsidy as of mid-July.

It remains unclear just how many of those jobs will be lost once the subsidy is removed on September 1, and the Jobseeker benefit is the next option for those in need of financial assistance. 

The Covid-19 income relief has seen people recieve $490 per week, while the Jobseeker is much less, at around $250 per week. Colonel Ian Hutson of the Salvation Army says the disparity between the payments is "wrong" and questions how many people can actually get that payment. 

“A lot of people are going to really struggle ... It’s really good that they’ve put that in place for the 12 weeks, but what happens after that?”

“It’s going to be a big drop once they come off that,” Mr Hutson told TVNZ1’s Breakfast.

He says before the pandemic there was already an “unacceptable level of poverty” in New Zealand, and he expects a peak in people using the Salvation Army’s services once the subsidy ends. 

“There’s going to be a whole new group who’ve not experienced it before - some of this could be for five years, it's not like five minutes.

"Right now I can’t see any other way ... the benefit needs to be increased otherwise these people are going to fall into much the same trap that many of the people were dealing with before Covid." 

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