Be prepared to bend like a giraffe to manage Covid-19 and debt
When dealing with an international pandemic, it’s not so easy to present a strategy one day and expect it to be perfect or the same the next day.
Covid-19 is a challenge for everyone, whether families are coping with children, people are dealing with fears of serious illness or those living on a tight budget are now bewildered about their financial future.
Now is a time for New Zealanders to take a depth breath and prioritise what actions they can have some control of and learn how to manage that which is beyond them.
If you are feeling overwhelmed please contact the Mental Health Foundation. You can call 1737 if you are worried or anxious or just need someone to talk to. This is a 24/7 helpline.
Changes to income
If your income has dropped because you’ve lost your job, your hours are reduced or your business is unable to continue operating, the New Zealand Government has established a financial support package.
The Covid-19 Wage Subsidy will be paid at a flat rate of:
$585.80 for people working 20 hours or more per week.
$350.00 for people working less than 20 hours per week.
Employers must make best endeavours to pay employees 80% of their normal income. Where that is not possible – in particular where a business has no activity whatsoever due to the shutdown and workers are not working any hours – employers must pass on at least the whole value of the wage subsidy to each affected worker. If a person’s income is normally less than the subsidy, they can be paid that normal salary.
The subsidy is paid as a lump sum to the employer to pass on to employees and covers 12 weeks per employee.
The wage subsidy is a Government payment to help employers pay wages. It does not change any other employment law obligations, meaning employees must be paid appropriately under their employment agreements for the hours they work during the lockdown.
Employers can apply for the subsidy here. https://workandincome.govt.nz/products/a-z-benefits/covid-19-support.html#null
Self-employed people can also apply for an income subsidy.
The Covid-19 subsidy won’t cover my debt payments
Debt solutions such as debt repayment orders, are unlikely to be activated right now.
However, if you have multiple creditors seeking payments that you are struggling to meet, contact Debtfix and they will negotiate with them on your behalf.
If you are having problems paying your rent – you need to speak with your landlord as soon as possible.
Under the Covid-19 regulations, until mid-June landlords can not apply to the Tenancy Tribunal to end the tenancy unless the tenant is at least 60 days behind in rent.
The Tribunal must consider whether it would be fair in the circumstances to terminate the tenancy, taking into account whether the tenant made reasonable efforts to pay rent.
Read more about Covid-19 tenancy law here.
Covid-19 and budgeting services
To keep people safe budgeting services are no longer available face-to-face but services may be assisting clients via the phone.
To find budgeting services near you go here.
Be patient when waiting for Covid-19 financial support
All financial, budgeting and employment services are experiencing extremely high levels of calls as we all come to terms with the impact of the Covid-19 lockdown.
You can help by preparing documentation correctly before you contact the organisation.
For example, employers need to have good records of employees’ information such as PAYE details.
If you are contacting a budgeting service, they need:
Proof of your income
Bank statements
Breakdown of benefit (screen-dump)
Size and age of family to help determine your needs, groceries, electricity etc.
Power bill and any other bills (phone and internet etc.)
Any hire purchase contracts or credit contracts for loans etc.
Stay informed, stay positive
Use reputable information sources for up-to-date information and avoid uninformed social media conversations that are likely to increase your stress levels.
A good starting point is the government Unite Against Covid-19 website that has many useful links to health, community and financial resources.
Stay safe and maintain your bubble.
