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Coronavirus: How to prepare for the possibility of unemployment

Is your job at risk due to the coronavirus? Start planning now.

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Nicola Middlemiss
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The coronavirus (COVID-19) isn’t just putting public health at risk – it’s threatening thousands of jobs across the country and having a huge impact on New Zealand’s economy.

If you’re worried the coronavirus could put you out of work, don’t wait to take action. This guide shows you ways to prepare, so you’ll be in a stronger position if you do lose your job.

What's in this guide?

  1. Build an emergency fund
  2. Talk to your employer about the government's COVID-19 support package
  3. Look into insurance options
  4. Consider alternative income
  5. Know your rights

Build an emergency fund

Your job might not be at risk right now, but there’s no knowing how long the coronavirus outbreak may last, or how badly it will impact the economy.

If you don’t already have one, start an emergency fund now. If you do have emergency savings, consider pouring a greater proportion of your income into the fund, so you are adequately prepared if you do lose your job.

There are lots of budgeting apps available, which could help you squirrel away some extra cash, so you don’t find yourself high and dry in an emergency.

Talk to your employer about the government’s COVID-19 support package

On 17 March 2020, the government announced a $12.1 billion COVID-19 support package for businesses and beneficiaries. A significant proportion of the support package went towards wage subsidies, and emergency support for individuals who cannot work because of a downturn in business or through needing to self-isolate:

On 23 March 2020, the government outlined updates to this support package including the removal of the wage subsidies cap and changes to who is eligible. Further funding has been added to this scheme, including $3.2 billion in Budget 2020.

Your employer may not have applied for the wage subsidy already but could be eligible. If you want to find out if your employer has received the wage subsidy, you can check on the COVID-19 Wage Subsidy Employer Search.

Look into insurance options

There are lots of insurance options out there, which can help in the event you lose your job or are too sick to work for a while.

  • Redundancy: If you think you might lose your job further down the line, it might be worth contacting insurance companies that offer redundancy cover to see if they can help.
  • Mortgage: Most people wouldn’t be able to pay the mortgage if they lost their job. Mortgage protection insurance covers repayments if something serious happens.
  • Bills: Bill protection insurance covers the cost of your bills if you’re too sick to work, or become involuntarily unemployed.

    ⚠️ Remember: There are specific requirements with insurance policies. You may have to hold a policy for a certain length of time before you can claim, or be out of work for a significant period. Contact insurance companies directly for more detailed information.

    Consider alternative income

    If coronavirus is putting your main income at risk, it might be time to look for a lucrative side-hustle. The more money you earn right now, the more secure you’ll be if you do lose your job in a few month’s time.

    Know your rights

    • Redundancy: If you’re a permanent employee and you’re made redundant, you may be entitled to redundancy pay. The amount you receive is dependent on your employment agreement.
    • Sick leave: Full-time and part-time employees are, by law, allocated 5 days paid sick leave per year if they need to care for themselves or a sick family member.

    Picture: GettyImages

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