Hon Paula Bennett
Minister for Social Development, Employment & Youth Affairs

28 March 2011
Media Statement

Government extends employment support package for Christchurch

A second round of assistance will support viable Christchurch businesses and help individuals who have lost jobs as a result of the earthquake.

“This second phase is designed to help employers transition into longer term solutions,” says Social Development Minister Paula Bennett.

The current Earthquake Support Subsidy (ESS) to help employers keep paying wages, will be extended for two weeks to 18 April, followed by a further six-week round with tighter criteria.

The next round will be available to employers who:
• can’t operate because of physical barriers caused by the earthquake
• can demonstrate ongoing viability to a business recovery co-ordinator
• have already been receiving ESS round one
•
The next round will not be available to:
• employers experiencing a loss of trade, or sole traders
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“We have to focus assistance on those businesses which have a realistically viable future as we move into the recovery stage,” says Ms Bennett.

“Employers must adjust to the new operating environment,” says Ms Bennett.

A total $153 million has been spent on the Earthquake Support Package to date, but is expected to reach a total of $170 million for the first six weeks.

The package extension announced today is expected to cost another $90.6m.

Employers who can show they need only short-term support, before being able to pay wages themselves, will continue to get ESS at gradually reducing rates over the six week period.

The rate of $500 gross per week for full-time employees for the first fortnight will reduce to $375 for the second fortnight and $250 for the third fortnight.

Businesses that do not meet the new criteria, but which have exceptional circumstances may be considered on a case by case basis by an extensions panel, made up of Canterbury employer representatives.

“We worked closely with the Canterbury Employers Chamber of Commerce, Canterbury Development Corporation and Business New Zealand, to develop the package of targeted assistance,” says Ms Bennett.

Employers who wish to access ESS for the two week extension and the next phase will need to re-apply for both.

The extended support complements the Government’s economic recovery package announced last week.

This aims to help Christchurch businesses rebuild with business recovery coordinators, training, and international visits for exporters to key clients.

Employers must apply for the two week extension from 30 March until 4 April and can apply for the second round from 5 April.

Application forms will be available at www.workandincome.govt.nz

ENDS

Q&A: Next steps of Employment Support Package

EARTHQUAKE SUPPORT SUBSIDY

What support will continue for employers?

The Earthquake Support Subsidy (ESS) is to be extended for two weeks to April 18. There will also be a second round based on tightened criteria to run for a maximum of six weeks from April 19. The second round of funding is to enable employers who have been receiving ESS and have viable businesses to keep paying employees while they get their operation up and running or transition back to business as usual support.

What is the last date to apply for the original ESS?

Applications for the ESS will close on Monday 4 April as businesses operating without it by then are unlikely to need it . Any firm that has not applied by this date will not be eligible for any support under the ESS .

Do employers have to reapply for the two week extension to ESS ?

Businesses will need to complete an on-line form to notify Work and Income that they need the two week roll-over of the ESS at the current rates. Businesses will also be able to do this by phoning the Earthquake Government Helpline on 0800 779 997.

Businesses will be able to do this from 9am Wednesday 30 March.

For the second round of support based on tighter criteria, businesses will need to apply and answer a number of questions so business coordinators can assess the need for further support. Businesses will be able to apply online or by phoning the Earthquake Government Helpline on 0800 779 997 from 9am Thursday 7 April.

What is the purpose of the second round of the ESS?

It aims to provide viable businesses with support for a further 2-6 weeks, until they are able to pay wages themselves or transition onto business as usual support. The second round has a tightened criteria, with payments gradually reducing over a six week period.

What is the criteria for getting the second round of ESS?

The criteria is for businesses that:

• Demonstrate ongoing viability.
• Are not insured to pay wages
• Are unable to operate because of physical barriers caused by the earthquake.
• Have already been receiving ESS

The extended subsidy is not to cover businesses suffering from loss of trade only or for sole traders with no employees.

What will the ESS payments be in the second round?

The initial two weeks of the second round of ESS (April 19 to May 3) will continue to be paid at a rate of $500 gross per week for a full-time employees, and $300 gross per week for part-time employees.

On-going payments for the following month, from May 3, will be assessed by business recovery coordinators. For the middle fortnight of the six week period, the payments will be $375 gross per week for full-time employees, and $225 gross per week for part-time employees.

The final two weeks of the second round of ESS, from May 17, will be at $250 gross per week for full-time employees and $150 gross per week for part-time employees.

How will eligibility be assessed?

Businesses will be able to apply on-line for the first two weeks, by completing a new form which includes details that demonstrate ongoing viability. Those applications that meet the criteria will be assessed by a panel including representatives from Work and Income and Recover Canterbury (a joint venture between the Canterbury Employers Chamber of Commerce and Canterbury Development Corporation).

Is further assessment needed after the first two weeks?

Businesses will be asked when applying for the second round of ESS whether they will be likely to require support after the initial two weeks. Businesses that think they will need this extra support will need to be assessed by a business recovery coordinator who may recommend that further ESS payments for up to four additional weeks can be granted.

How do businesses apply?

ESS support can be accessed by going on-line to www.workandincome.govt.nz, the Government Helpline 0800779997, or visiting a Work and Income service centre, at these Christchurch sites:

• Hornby
• Riccarton
• Linwood Community Link
• Shirley
• New Brighton
•

When can businesses apply from?

Businesses will be able to apply for the extra two weeks of payments under the current ESS from 9am Wednesday 30 March. .

Businesses will be able to apply for the second round of ESS from 9am Thursday 7 April

What support is available to business owners and workers who do not meet the criteria?

Other forms of financial support include:
• Insurance, where applicable
• Bank loans (in particular the recent package for small businesses announced by ASB)
• Hardship and other financial assistance from Work and Income
• The Individual Support Payment.
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INDIVIDUAL SUPPORT PAYMENT

The Earthquake Job Loss Cover payment for displaced employees is to be extended by two weeks to April 18, and then replaced from April 19 with an Individual Support Payment

Do I need to reapply for the two week extension to JLC?

No, if you are already receiving JLC then you do not need to reapply for the extra two weeks. These payments will be made automatically.

What should I do if I am receiving JLC and I find work?

You must notify us if your circumstances change. If you start work then you are no longer eligible to receive JLC.

What is the Individual Support Payment?

This is a top-up payment in addition to regular income support benefits, for people who have lost their job because of the earthquake. The payment is only for those who remain in the Canterbury region.

What is the purpose of the payment?

The payment recognises that people who have lost their main source of income following the earthquake, need additional support – as they move on to a benefit, and to help while they seek alternative employment.

How much is the payment?

This payment is in addition to a regular income support benefit, and is:

• $50 (net/gross) per week for a single person
• $80 (net/gross) per week for a couple without children or a sole parent
• An additional $10 per week for each child, up to a combined maximum of $110 per week.

How long will the payment continue to be made?

Eligible people can receive the payment for up to six weeks while they remain on the benefit. It can be applied for over a six week period from April 19. The final application date for the payment will therefore be May 30, with payments continuing for up to six weeks from the date the application was granted.

Who is eligible for the payment?

The payment is for people in Canterbury who have lost their job as a direct result of the February 22 earthquake. To be eligible people must meet one of the following categories;

• have already received Job Loss Cover payments; or
•
• have worked for an employer who received ESS payments ; or
•
• have worked for an employer who was based in the Christchurch City Council area
People must also meet the usual eligibility requirements for benefit.

How do I apply for the Individual Support Payment?

The normal benefit application process is the application process for the Individual Support Payment. If you meet the criteria for the payment described above and are eligible for benefit then your Individual Support Payments will be added to your usual benefit payments for six weeks.

When can I apply from?

People will be able to apply for this payment anytime but they can’t be paid until after 18 April.

Can I get this and the Job Loss Cover or ESS payments at the same time?

No, people will not be eligible for the Individual Support Payment and JLC or ESS payments at the same time. Once a person stops receiving JLC or ESS then they may be eligible for the Individual Support Payment if they are eligible for benefit.

ENDS

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