Jacinda Ardern urged to increase COVID-19 leave support scheme so workers can afford to self-isolate

The Prime Minister is being urged to increase the leave support scheme so workers can afford to self-isolate - a move Business NZ says would be much cheaper than more lockdowns. 

The Government's COVID-19 leave support scheme was introduced a year ago to help employers with the cost of staff who have been instructed to self-isolate at home for two weeks. 

The scheme currently pays out $1171.60 for full-time workers and $700 for part-time workers, as a one lump sum to cover the two-weeks. 

But it's well below what a full-time worker would make on the minimum wage - $1512 over a two-week period - and Business NZ CEO Kirk Hope says that needs to change if the Government wants to prevent another lockdown. 

"Our view is you want to enable people to be able to do the right thing, and if they're financially penalised for doing the right thing, it's a tough situation for them to be in," Hope told Newshub. 

"There is no doubt that there is a case for the income support payment to be expanded so that people don't lose income. It's cheaper to do that than it is for the rest of the country to move through alert levels, because the cost of that is frankly becoming immense."

Hope said the pay-out should match the worker's income, or at least be paid out in income bands, so that workers feel comfortable knowing their employer will have the money to pay them for their time off, since workers are currently only entitled to five days of sick leave. 

Business NZ CEO Kirk Hope.
Business NZ CEO Kirk Hope. Photo credit: Newshub

The Government has introduced a law change that will give New Zealanders 10 days of sick leave, but it's not expected to come into force until mid-2021.  

Hope acknowledged that administration of it "might be tricky", but "the alternative is we have to keep moving through alert levels because people say 'I needed to go to work because I wasn't going to get paid'."

"We're not talking about huge numbers of people in this situation and we think the fiscal cost would be marginal compared to the fiscal cost of shifting through alert levels," Hope said. 

"Thus far we've contained it to reasonably moderate clusters of people - so even if it was a much larger outbreak, that's still significantly lower than the cost of lockdowns."

Green Party COVID-19 response spokesperson Julie Anne Genter is also calling on the Government to assess how the leave support scheme can be improved.

"There is anecdotal evidence that people are not staying home from work when they should, either because they can't afford to, or because their employer is asking them to come in," Genter said.

"We need people to be able to afford staying home from work when they need to self-isolate. If this means the scheme needs to be more generous, we would absolutely support that."

Green MP Julie Anne Genter.
Green MP Julie Anne Genter. Photo credit: Newshub

A community case of COVID-19 in November faced backlash for going to work in Auckland after receiving a test. More recently, a COVID-positive KFC worker was told off by the Prime Minister for not self-isolating - advice the worker disputes

Ardern said the leave support scheme was only ever meant to be a subsidy. 

"We accepted that these were circumstances where we didn't want there to be any reason for someone not to stay home. So, quite unusual of course for the Government to step in and start paying what would usually be a function of an employer - essentially paying sick pay," she said. 

"But we've subsidised that. It was never meant to be full entitlement, just like the wage subsidy. If we have that sustained feedback from employers that there are issues with that scheme and the way it's working, then of course we keep an open mind. But we haven't on a sustained basis had that raised with us."

The leave support scheme sits alongside the Government's other financial support packages, including the resurgence support payment. Businesses that experience a 30 percent drop in revenue over seven days get $1500 and $400 per worker up to a total of 50 full-time employees. 

There's also the short-term absence payment, which provides financial support for businesses with workers who need to stay at home while awaiting a COVID-19 test result. It's a one-off payment of $350 to employers. 

The wage subsidy scheme is also be available nationally when there's a regional or national move to alert levels 3 or 4, for a period of seven days. The wage subsidy scheme has so far paid out more than $14 billion.