6 May 2020

Redundancy payment will leave cleaner ‘worse off’

5:24 pm on 6 May 2020

A cleaner made redundant because of Covid-19 says her redundancy payout means she can't get a benefit and it will leave her worse off in six months time.

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Photo: 123rf

Mary* was made redundant when lockdown began.

For eight years she'd worked hard at her job in a cleaning team at an Auckland hotel.

She knew the writing was on the wall - the tourists aren't coming back for a long time.

She doesn't blame her employer, even though the business didn't apply for the wage subsidy.

But now Mary feels like she's not being treated equally.

She applied for a job seeker's benefit but has been told she won't receive anything till her redundancy runs out - that will be in September, if she can make the money stretch that far.

For her it's a double standard the government needs to address for her and many others in the same situation.

"There seems to be no understanding that at the end of the redundancy my industry is still gone, my opportunities are gone, and I may not have found a job.

"It just doesn't feel equal that others are getting $7500 of subsidy for three months and then, potentially, their redundancy. Where people like me are having the most taken away from them and there is nothing to help in the meantime."

Mary has always been careful with her money.

She'd recently saved every extra penny to help her mum into a new house before Covid-19 struck. The house is nearly finished, but her mum is now also living with her during the lockdown.

Mary is trying to make her redundancy stretch. She's put her mortgage on hold and is only spending on the basics - food, power and insurance bills - which tally about $570 a week.

However, when it runs out she still has the bills and no room left to move.

"I can't cut off my house or car insurance. I won't be able to afford my mortgage. It leaves me vulnerable. Everything is as tight as it can be.

"I have never bought things I can't afford. Even if I had a little bit extra each week I could stretch my redundancy out further but I'm not allowed to access the subsidy personally and I can't get a benefit."

She doesn't understand why the government is leaving people like her to run down what they have.

She'd love to see the wage subsidy available to people in her situation.

"Yes, I have the luxury of a redundancy but in six months I am actually worse off. But I have to wait till September through no fault of my own.

"We're (she and mum) trying to work out where we go from here. We're both looking at getting flatmates in. I am looking for work. I will do what I need to do but I'm not going to get the opportunities I had before."

Work and Income's Kay Read, group general manager client service delivery, confirmed payments received when a person stopped work, such as holiday pay and some severance payments, would delay the time when income support payments started. It wasn't a reason to decline an application for job seeker support.

She did not respond to questions about whether the rules were under review to allow such people access to benefits more quickly nor if changes were planned.

*Name changed

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