Coronavirus: What countries have done to support the unemployed during the COVID-19 crisis

In just a matter of months, the COVID-19 illness has swept around the world, killing hundreds of thousands and creating economic ruin for millions.

Attempting to limit the spread of the SARS-CoV-2 virus, nations protected themselves by their closing borders, essentially cutting off tourism and international education. As the virus popped up in more and more locations, countries required citizens to stay at home, shut their businesses and keep interaction with others to a minimum.

The resulting effect on the global economy has been huge. The International Monetary Fund (IMF) said COVID-19 and "The Great Lockdown" would cause the "worst economic downturn since the Great Depression". Millions worldwide have been made redundant, while many more face growing uncertainty around the future of their jobs.

To respond, governments have invested billions in trying to support the newly unemployed.

Here's a look at some of the new ways four nations are trying to help the onslaught of jobless.

Australia

By the end of April, Australia's unemployment rate had risen to 6.2 percent, up 1 percent over the month, with more than 823,000 unemployed across the nation.

Australia's main unemployment support is the JobSeeker scheme, which pays between about AUD$565 (NZD$604) and $800 a fortnight depending on an individuals' situation.

To support unemployed citizens during the pandemic, this has been topped up by the taxable Coronavirus Supplement, which is $550 every two weeks. Australians began receiving it automatically from April 23 if they were already on one of a number of other benefits, such as the JobSeeker payment.

However, due to the strict eligibility requirements, many temporary visa holders can't access the JobSeeker scheme, including New Zealanders.

"I've worked all my life. I've never claimed a benefit in New Zealand or Australia and I've worked really hard and it just grates when you're told we're all in this together. We're not in this together," Kiwi Chris McIntosh told Australian media.

With the JobSeeker and Coronavirus Supplement, Australians out of work could be receiving about AUS$1100 (NZD$1177) every two weeks. A poll presented by ABC found that 58 percent of people were satisfied with that amount. Thirty-seven percent of respondents said those out of work should continue to receive the topped up amount even as the economy recovers, something Labor leader Anthony Albanese agrees with. 

"During this period the government has said it needs to increase JobSeeker because $40 a day wasn't enough to live on," Albanese said.

"If it's not enough to live on now, it wasn't enough to live on before. Does it go back to being enough to live on down the track? It's up to the government to explain that contradiction."

Prime Minister Scott Morrison has ruled out keeping the higher amount, however, saying it may be a "disincentive" to look for work.

On top of the weekly payments, the Australian government also gave AUD$750 to about 6.8 million Australians between March 31 and April 17. To be eligible for this "Economic Support Payment", citizens had to receive a benefit or other supplement before April 13. A second AUD$750 injection will be paid out in July, but that won't be accessible to those already getting the Coronavirus Supplement. 

Ireland

In Ireland, the seasonally-adjusted unemployment rate sat at 5.4 percent at the end of April.

The nation has devised a new social welfare scheme to support those who have lost their jobs due to the pandemic. Taking those on the scheme into account, local media report the unemployment rate would be at 28.2 percent

The COVID-19 Pandemic Unemployment Payment is €350 (NZ$623) a week for the unemployed. Anyone who was employed in Ireland before March 13 and has subsequently seen their job cut, been laid off temporarily, or asked to stay home from work can access it. The self-employed can also get it if their work has dried up.

Those with a spouse, partner or child are told to apply for a jobseeker's payment as it enables them to claim additional allowances.

The special coronavirus payment had been scheduled to end on June 8, but on Thursday,  Taoiseach Leo Varadkar confirmed it would continue past this date. 

"The economy is only slowly opening up now and it is going to have to be extended, nobody needs to worry," he said.

How long that scheme may last, however, is up in the air as the country is in the middle of government formation talks more than 100 days on since an inconclusive February election.

"This government or the new government will have to make a decision soon as to how long that will be extended to."

New Zealand

The latest quarterly update from StatsNZ showed an unemployment rate in Aotearoa of 4.2 percent. But that only included those without a job up until the end of March - before the majority of job losses occurred. Treasury forecasts unemployment to reach 9.8 percent by September. 

More information about the economic consequences in New Zealand is provided by the Ministry of Social Development, which reports that by May 15, 188,432 people were on a Jobseeker Support benefit, up from 145,006 on March 20. 

One of the first measures the Government took to respond to COVID-19 was to increase main benefit rates from April 1 by $25 a week. After tax, a single Kiwi without children over the age of 25 receives $250.74 each week before other supplements come into play. The Winter Energy payment has also doubled for 2020.

Since then, the Government's focus has been on keeping Kiwis in jobs with its wage subsidy scheme as well as to retrain those out of work.

But there was a big announcement on Monday when the Government revealed the COVID-19 Income Relief Payment. Under this initiative, most Kiwis forced out of a job between March 1 and October 30 due to COVID-19 are eligible for a tax-free supplement for 12 weeks. For full-time workers, this is $490 each week, while those working between 15 and 29 hours a week get $250. The self-employed are also eligible.

There are several reasons Kiwis may ineligible, however, such as if their partner earns more than $2000 before tax each week, if they are already receiving a main benefit or pension, or if they have received a redundancy payment of $30,000 or more. 

The scheme has been criticised, however, for "creating two-tiers of unemployed". 

"The Government is creating a two-tier welfare system where the newly-unemployed receive higher incomes than those on main benefits who live below the poverty line," said Auckland Action Against Poverty (AAAP).

United States

In the United States, the unemployment rate increased by 10.3 percentage points to 14.7 percent in April - the largest monthly increase in US history. That took the number of unemployed people to 23.1 million, up 15.9 million. By the end of May, it's expected to be much higher. Forbes, for example, says 39 million people have now filed for unemployment since mid-March.

While each individual state has their own welfare system, referred to in the United States as "Unemployment Insurance" (UI), and different maximum durations for people to have the benefit, the US federal government has implemented several initiatives to support the newly unemployed.

Central to the government's programme is the Coronavirus Aid, Relief and Economic Security Act or CARES. It has three key pillars:

  • Self-employed workers and gig workers to receive unemployment benefits
  • All unemployed workers to receive an extra USD$600 (NZ$967) a week for up to six months
  • Unemployed workers to get an extra 13 weeks of benefits beyond the number a state currently provides.

The $600 weekly cash injection adds to the average $378 a week those on the benefit in the US received prior to the pandemic. In some states, maximum benefits are much lower, in others it's higher.

In some sectors, the supplement and benefit comes to the same or more than what many Americans made before becoming redundant. CNBC gives the example of accommodation and food services, an industry which typically pays an hourly rate of $13.45 an hour. After receiving the benefit and $600, a full-time worker let go from this sector would receive 182 percent of what was their wage, CNBC says. While that is good news for those in lower-paid jobs, those in professions, scientific or technical services are making less money than usual.

The policy is only meant to last until July 31, but Democrats argue the economic repercussions of COVID-19 won't be over by then and are pushing for an extension until January 31, 2021. Republicans, however, say there needs to be an incentive for people to get back out and find new work. The $600 is only accessible, though, if people are looking for work and aren't rehired by a business if it recovers.

While the CARES Act has been welcomed, there have been reports of unemployment agencies buckling under the pressure of the millions of new jobless. A New York Times Column suggested the government could give people work by employing them in these understaffed offices during the pandemic and beyond.