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COVID-19: Options for Financial Support



In an article posted last week, I outlined an employer's obligations to pay wages during the national COVID-19 lockdown period. Unfortunately, many employers are claiming that it's not possible to pay an employee their full wages during this time, and are only passing on the subsidy. This means that many people are struggling to meet their basic needs.


I've heard your concerns, but I haven't been able to answer your questions on how to financially survive during this time; I'm no expert on WINZ options. Instead, I've reached out to Dave Crampton, and asked him to provide you with valuable information on some options to consider for financial support during these uncertain times.

The below has been republished with consent from Dave Crampton. See original article here.

Accommodation Supplement


Almost every one income family with children who has minimal assets and no other income other than the government wage subsidy, and has a mortgage and/or rent payments, will be entitled to the WINZ accommodation supplement, even if they are not a beneficiary. That payment is up to $305.00 a week, depending on where in the country you live and how much housing costs you have. Obviously you`d get more if you live in Auckland than if you live in Taumaranui. Costs that make up that asset-tested subsidy include rent, or mortgage, house insurance, Council rates and encroachment costs - and any essential maintenance costs paid in the previous 12 months, such as, for example, replacing a hot water cylinder or fixing a leaking roof.


If both partners get only the wage subsidy - a total of $1170 a week - and have less than $16,200 in cash assets, they are still classed as a low-income family and will be entitled to the accommodation supplement if they have sufficient housing costs. 


Food Grant


Every family needs to be fed. Work and Income has a food grant system where low income families can access $250 every six months (for singles) $300 for childless couples and $450 for families with kids. For those families, including sole parents, with three or more children, you can apply for up to $550 every six months. It is all based on need. It also means that if you have a choice between paying for power/rent  or paying for food, you pay the power/rent and get a food grant, as grants don't have to be paid back. If you can't do either you can apply for an advance to pay for power, and that's recoverable - as well as getting a food grant and use your money to pay housing costs.


From April 1, anyone on a benefit can earn or be paid $90 a week without affecting that benefit.


Working for Families


A drop (or raise) in income will also affect entitlement to IRD Working for Families. If you are in work for even a few hours a week you will be now entitled to the In Work Payment up to an income threshold, unless you are getting an abated benefit. For those with children, many will be entitled to some sort of Working for Families assistance on the wage subsidy. Do note, however that Working for Families is based on estimated annual income, so if annual income goes up later in the financial year starting on Wednesday, April 1, it is re-estimated and you may have to pay some or all of the assistance back. Another option is to do an IRD wash up at the end of the financial year.     


Mortgage Holiday


The Government has also said that banks can offer a mortgage holiday for six months. However, if possible, it would be better to change to an interest only mortgage or drop the amount you pay on the principal; even the banks are advising this. While a mortgage holiday is a payment break, it is not a holiday, it is merely a suspension of payment of accrued interest and a sure means of additional long-term mortgage debt as interest still accrues, even if the principal does not reduce during the “holiday”. It’s like approaching a loan shark without actually borrowing anything, only to find you have to pay thousands more in mortgage interest in later years, thus extending your mortgage period.


Community Service Card


Community Service Cards last for 12 months and can be used to get discounts - e.g. doctors and physio visits and prescriptions. Even if you subsequently get or return to a high earning job within the following 12 months you can still use it for the duration of the 12 months.


Counselling Services


Some people may need counselling to recover from COVID-19, and lower income people can claim a Work and Income disability allowance to pay for counselling costs ( after lockdown is over, obviously as you can’t see a counselor during lockdown unless its online via Zoom or similar).


Essential Maintenance


If you are on a low income and your roof is leaking or you need a new hot water cylinder or your oven breaks down, that needs to be fixed and is seen as essential maintenance. If you can’t afford to pay it up front you can get up to $1000 from WINZ for any essential maintenance, and you may not need to pay it back. If you can afford it you then add the amount you paid on to your accommodation supplement, thus increasing the weekly payments. 


Applying for a digital client number


To get assistance from Work and Income, each person will need to apply for a nine digit client number, if they don't already have one. If getting the accommodation supplement as a non-beneficiary, applicants should also apply for a community services card which will have that nine digit client number on it. If an applicant applies for the benefit, a community services card is automatically sent out once the benefit is granted. Those with higher mortgage or rent costs may also be entitled to Temporary Additional Support (TAS). Those with a disability and have associated ongoing costs can also apply for the Disability Allowance, even as a non-beneficiary.


How to get Documents to WINZ


During lockdown if you have documents you need to get to Work and Income you can’t drop them off as offices are inaccessible. You can email them to Documents_cc@msd.govt.nz if they can be emailed; if you don’t have a scanner, take a photo and email documents. However, for more efficient service, it’s better to get the e-mail address of a relevant case manager and e-mail that person direct. For new applicants, there will be a phone call from Work and Income to supply an email address to send documentation.


Conclusion


During the lockdown, things won’t always go (and haven't so far gone) smoothly, so stay in touch with employers and Work and Income to get the support you need.



Ashleigh Fechney

LLM(hons), BA

027 555 999 5 Ashleigh.the.Advocate@gmail.com www.ashleightheadvocate.co.nz

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