Sole traders' payments end as package tightens

OLIVIA CARVILLE

Last updated 05:00 13/04/2011

 

More than 10,500 sole traders in Christchurch will lose earthquake payments next week as the Government tightens its support package.

During a visit to Christchurch yesterday Social Development Minister Paula Bennett said there was "no formula for this stuff", and deciding on the right time to tighten funding was difficult.

"It is hard to know where the line is. You need to have the support there for the people but then you don't want the people depending on you," she said.

"You need to offer enough support to allow them to get back on their feet."

Changes to eligibility for the second round of the earthquake support subsidy from next Tuesday will exclude 10,500 sole traders who had been receiving the payments. Some may be eligible for another support scheme.

Businesses also face tightened criteria from next week. To receive the earthquake subsidy for a further six weeks they will have to show ongoing viability, that they are unable to operate because of physical barriers, and are not insured to pay wages.

The Government's job loss cover, which has been paid to 6000 Christchurch workers who lost their jobs, will change next week to a regular income support benefit plus a top-up.

Fulltime workers were funded $400 a week under the old scheme. Under its replacement individual support payment, a 25-year-old, who qualified for an unemployment benefit, would receive $251.40.

In total the Government has paid $185 million to businesses and employees in Christchurch during the first six weeks of the earthquake support package.

Bennett said the 14-week earthquake support subsidy (ESS) funding period should be long enough to allow businesses to get back on their feet.

"If by 14 weeks they have not worked out how they are going to be viable then the chances are they probably won't be," Bennett said.

She had heard reports that 70 per cent of Christchurch businesses were finding themselves viable and she said that filled her with hope.

Among groups Bennett visited yesterday was the Canterbury Development Corporation (CDC).

CDC Business services manager Michaela Blacklock anticipated the change in criteria would bring on a "massive workload".

"We will need to work through applications for those that do qualify and then have to help out those businesses that have been excluded this time," she said.

Blacklock said the ESS payments had been a "lifeline" for Christchurch businesses.

"The ESS has been amazing and has really made a big difference. What we need to do now is set up a plan beyond ESS."

Simon Worthington, CDC workforce strategy manager, said many Christchurch businesses had shown incredible initiative in the past seven weeks.

"It really shows the Canterbury spirit, businesses you would expect to fall over have got back up on their feet," he said.

Worthington said Christchurch's rebuild would offer many "phenomenal opportunities" but there was still a long way to go for the devastated business community.

- The Press