40,000 New Zealanders to be supported back into work through Flexi-wage expansion

 40,000 New Zealanders to be supported back into work through Flexi-wage expansion
Prime Minister Jacinda Ardern and Minister for Social Development and Employment Carmel Sepuloni have today announced a significant expansion to the Government’s Flexi-wage initiative, which will see up to 40,000 New Zealanders supported into work. The changes significantly increase the average amount a business can access to hire a worker, and scale up the number of out of work New Zealanders the scheme will reach. “Flexi-wage is an important plank of our economic recovery plan,” Jacinda Ardern said. “The expansion of it is expected to help thousands more New Zealanders into employment.” Businesses can now receive an average of $7,500 per employee, although this amount will depend on individual circumstances. Flexi-wage supports businesses getting back on their feet to take on new workers, and is targeted at kiwis struggling to re-enter the work force, including those who lost their jobs due to Covid. “We made a commitment to expanding Flexi-wage during the election and today’s announcement delivers on that promise,” said Jacinda Ardern. “We are seeing the positive outcomes of our strong economic plan with recent Statistics New Zealand data showing unemployment fell from 5.3 percent to 4.9 percent, but there is more to do.” Today’s announcement includes a ring-fenced $30 million self-employment component, and covers increased support through training and mentoring for those out of work wishing to start their own business. Through the existing scheme, 40,167 Flexi-wage subsidies were approved between 1 July 2014 and 30 June 2020. The Ministry of Social Development (MSD) leads the programme and will begin taking applications for the expanded programme on Monday.  Flexi-wage is also available to help with training or in-work support that a person may need to do that job. However, the job must continue after the Flexi-wage has finished. “Through MSD, we’re delivering a range of employment services so we can help more New Zealanders achieve their potential,” says Carmel Sepuloni. “The Flexi-wage expansion gives employers confidence to take on and train people, knowing the person will be supported until they’re equipped and ready to meet the requirements of the job. “This gives employers an incentive to take on new staff members to help sustain and grow their business. “In expanding the Flexi-wage programme, eligibility has been widened from initially helping job seekers on a benefit and at risk of long-term unemployment, to now include job seekers disadvantaged in the labour market who may not necessarily be receiving a benefit. “For employers, Flexi-wage provides certainty by providing set rates to businesses looking for staff. The duration of the subsidy will be based on the needs of the person employed and lines up with evidence of effectiveness and international literature on the effect of wage subsidies. “It is another step in the journey to creating a system which ensures people have an adequate income and standard of living,” says Carmel Sepuloni. ENDS Notes to Editor: Sleepwell NZ Ltd in Auckland has been operating since 2014, providing bulk mattress orders and bed headboards for shops, hotels and motels. Its Directors are brothers David and George Kyle, who started out in a garage in Ōtara. Together, they have more than 30 years of experience in making mattress and bed bases. Flexi-wage payments will be:•               $276 a week, totalling $6624 over the 24 weeks of the contract (GST inclusive)•               $276 a week, totalling $9936 over the 36 weeks of the contract (GST inclusive). MSD work brokers retain the ability to negotiate a Flexi-wage over and above these rates where complex or specific barriers to employment exist. Additional support is available for pre-employment or on-the-job training, or in-work support, for people who need it. Flexi-wage self-employment will include:•               $600 a week over 28 weeks, totalling $16,800 (pro-rated for those pursuing self-employment part-time)•               increased funding support through a Business, Training and Advice Grant, up to $5,000. People moving into self-employment may also be able to access up to $10,000 to help with business start-up costs through the existing Self-Employment Start-Up payment. The expansion will take effect on 15 February 2021. It was first announced as part of the Government’s 2020 manifesto commitments. Media contact for Min Sepuloni: Mark Sleeman 021 859 524  QuestionAnswerWhat is Flexi-wage? How does it work? Flexi-wage is an employment programme offered by MSD. Flexi-wage helps job seekers get the skills they need to meet the requirements of a job, and helps employers hire staff. Flexi-wage support can include training and mentoring as well as a contribution towards wages. The job must continue after the Flexi-wage has finished.What is the Flexi-wage expansion? What has changed?The expansion significantly scales up the Flexi-wage programme to reach up to 40,000 more New Zealanders.In expanding the Flexi-wage programme, eligibility has been widened from helping job seekers on a benefit and at risk of long-term unemployment to now include job seekers disadvantaged in the labour market who may not necessarily be receiving a benefit.There will also now be set rates to provide certainty to businesses looking for staff.The length of time that the Flexi-wage can be paid depends on the level of support a person needs to get the skills and training they’ll need to do that job.Flexi-wage may be paid for:·         24 weeks at $276 per week, totalling $6,624 (GST inclusive), or·         36 weeks at $276 per week, totalling $9,936 (GST inclusive).Both these rates are $240 per week before GST. There’s also a discretionary rate depending on the amount of support that a person with complex needs will need to get a job and stay employed. Our staff will work this through with employers and job seekers.Why has Flexi-wage been expanded? The Government is making an additional $300 million available through the Flexi-wage programme, recognising the need to support people who need a little extra help to get a job. This includes $30 million ringfenced to support people out of work who want to start their own business.  Due to the economic impact of COVID-19, an increasing number of job seekers and employers are looking for support. While there has been a recent drop in unemployment numbers, there are still many people looking for work and needing support to get the required skills.Is this available to businesses struggling to pay current staff?In some situations, a Flexi-wage could be paid to support an employer to re-deploy a person who is at risk of redundancy, but the person would need to be doing a different role that requires different skills within their business.However, this is only when the job requires a person to retrain for the new role, and the job needs to be ongoing beyond the length of the Flexi-wage support.Is this going to help Māori, Pacific people, women and youth, all identified as more heavily impacted by COVID-19?Yes. We also consider a range of other factors that may increase a person’s challenges in gaining sustainable work. This includes prioritising support towards young people, Māori, people with health conditions or disabilities, and clients with dependent children. In doing this, MSD is guided by its Employment and Social Outcomes Investment Strategy available on the MSD website. What does “disadvantaged in the labour market” mean?”In expanding Flexi-wage, eligibility has been widened from helping job seekers on a benefit and at risk of long-term unemployment to now include job seekers disadvantaged in the labour market who may not necessarily be receiving a benefit.Disadvantaged in the labour market is defined as:People who have or are expected to have difficulty in getting sustainable work and then staying employed. It includes people who are:–      experiencing significant barriers to employment–      experiencing low job security or are underemployed-      have or are expected to experience extended displacement due to an economic disruption to their occupation, industry or region.How much funding is there now at an individual level? Is that more or less than before the expansion?Flexi-wage may be paid for:24 weeks at $276 per week or $6,624 in total, or36 weeks at $276 per week or $9,936.Staff also have discretion to provide more support, depending on the specific or complex needs a person has to get a job and stay employed. Our staff will work this through.Overall, the average payment is estimated to be $7,500 across 40,000 placements, which is higher than the previous average. Some will get more and some less, depending on the individual’s needs.How do you know Flexi-wage has been effective?The Flexi-wage has been rated as effective through MSD’s annual report on the cost-effectiveness of its employment assistance and programmes.Available on MSD’s website: https://www.msd.govt.nz/about-msd-and-our-work/publications-resources/research/employment-assistance/index.htmlWho decides the individual support? What discretion is there?MSD staff have the ability to negotiate a Flexi-wage over and above these rates where complex or specific barriers to employment exist. Additional support is also available for pre-employment or on-the-job training, or in-work support, for those people who need it.Why have you added a single weekly pay rate and set time frames? What if someone needs more support?We have added set rate to make it easier and provide more certainty to businesses.People who require more assistance can talk to MSD about how the Flexi-wage can be tailored to meet their needs.How many people will this change affect?Up to 40,000.

Kieran Meredith Press Secretary

Office of Hon Carmel Sepuloni

DDI: +64 4 817 8294 | Mobile: +64 21 817 570 | Email: Kieran.Meredith@parliament.govt.nz

Minister for Social Development & Employment, Minister for Disability Issues, Minister for ACC, and Minister for Arts, Culture and Heritage

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