Quake Subsidy Scheme tightened

Prime Minister John Key surveys earthquake damage in Canterbury. Photo / Mark Mitchell

The Government is going to tighten up the rules around the Earthquake Support Subsidy scheme which has been operating in Canterbury for nearly four weeks, Prime Minister John Key said today.

It was introduced three days after the quake struck and has so far cost more than $8 million to cover 10,000 employees, Mr Key said.

The scheme gives money to employers affected by the earthquake so they can continue to pay their workers while businesses get back on their feet, and is due to end on November 1.

"The scheme was intentionally very flexible in those first weeks and we erred on the side of generosity," Mr Key said at his post-cabinet press conference.

"While we have not insisted that employers provide every single piece of documentation initially, we will be now slightly toughening up the rules."

Mr Key said the scheme was initially intended to cover companies with fewer than 20 employees, but he knew of "a couple" with as many as 70 or 80 which had been accepted.

"It was very much immediate help for people who could not work because of the earthquake but we need to get the scheme to where its original design was," he said.

"We're trying to be flexible and reasonable but we ultimately need to wean people off the scheme which ends on November 1."

Mr Key said it was possible some would be struck off the scheme but he could not say how many.

He said the Earthquake Commission had so far received just over 87,000 claims and there were signs the claim rate was slowing down.

To date it had assessed nearly 8700 claims and was working through the backlog, focusing on the most seriously damaged properties.

"This remains a very difficult time for affected business and home owners," Mr Key said.

"I acknowledge their patience and understanding."

Acting Social Development Minister Judith Collins said the November 1 end date for the scheme represented a four-week extension.

"This subsidy is to help small businesses pay their staff while they get operational again and we know some are still really struggling," she said.

- NZPA