Government expands flexi-wage subsidy for employers: How to get $276 a week per worker

Employers in New Zealand can apply to receive $276 a week per worker as the Government expands the flexi-wage subsidy to non-beneficiaries as part of a $300 million boost.

The flexi-wage scheme is a subsidy given to employers by the Government for taking on the risk of employing new workers who need support to gain the required skills for the job.

The length of time the flexi-wage scheme can be paid depends on the level of support a worker needs to get the training required to do the job. It may be paid for $276 a week for 24 or 36 weeks, depending on the circumstances.

The $300 million includes a ring-fenced $30 million self-employment component, meaning $600 a week is available over 28 weeks for those who are self-employed. Grants of up to $5000 will also be available for business training and advice.

There is also a discretionary rate available to employers, depending on the amount of support a worker with complex needs will require to get a job and stay employed.

The expansion comes into force from next Monday. The Ministry of Social Development will assess each application and determine how long an employer should receive the subsidy. The job must continue after the payments have finished.

Labour promised to expand the flexi-wage scheme during the election last year and Prime Minister Jacinda Ardern said it would be implemented prior to Christmas. But she confirmed earlier this month that it was still in the works.

"We made a commitment to expanding Flexi-wage during the election and today's announcement delivers on that promise," she said on Thursday.

Prime Minister Jacinda Ardern.
Prime Minister Jacinda Ardern. Photo credit: Newshub / Zane Small

The scheme was introduced in 2012 by former National Party Social Development Minister Paula Bennett. The Labour Government has continued the scheme due to its success, with 40,167 subsidies approved between July 2014 and June 2020.

Ardern said flexi-wage is an important part of the Government's economic recovery plan, with the expansion expected to help 40,000 more New Zealanders into employment.

"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."

The Government has previously made trades training and apprenticeships free until December 2022, to try and boost employment and stimulate construction to solve the housing shortage.

The latest data from Stats NZ showed employment rose by 17,000 in the December quarter, up 0.6 percent on the previous September quarter. Women made up 10,000 of the increase in the last three months of the year.

Social Development and Employment Minister Carmel Sepuloni said the stronger labour market saw more people come off the benefit in the December quarter, with nearly 27,000 entering paid work. But there are still more than 200,000 Kiwis out of work.

But Māori joblessness is rising significantly in parts of the country. When Labour took office in 2017 the number of Māori on a jobseeker benefit in Northland was 4884, by the end of December 2020 it climbed to 7616 - a 56 percent increase.

National's social development spokesperson Louise Upston wants the Government to adopt JobStart, a policy that would help businesses by giving them a grant of $10,000 for each new worker they employ.

"Obviously the fact that the unemployment rate is lower than anticipated is good news, but what it doesn't do is excuse from taking further action to help Kiwis into jobs," Upston said last week.

"We've got 214,000 New Zealanders who are out of work and the Government should be taking urgent action to support them to get a job."

New Zealand's 4.9 percent unemployment rate compares with 6.8 percent in Australia and the United States, and 8.7 percent in Canada. The OECD average is 6.9 percent.