Transition to Work Grant: a non-repayable alternative to a loan in New Zealand

Before you borrow, check the grant

Many people look for a loan in the weeks between accepting a job offer and receiving the first wage. In New Zealand, Work and Income runs the Transition to Work Grant for exactly this gap. The page states plainly that you do not have to pay the money back.

That single fact changes the comparison. A grant has no interest, no fees and no repayment schedule, so it makes sense to ask for it before approaching any lender.

What the grant can pay for

The grant covers reasonable costs of finding or starting work. Work and Income lists items such as interview clothing and transport, tools or work clothing, relocating, living expenses before your first pay, interpreter fees, tattoo removal, and childcare for interviews or for the first days of a job.

The total is up to $1,500 in any 52-week period. Ongoing childcare help of up to 50 hours a week may also be available, depending on circumstances. Treat these figures as the ones shown when the page was checked and confirm the current ones with Work and Income.

• Boots, uniform or a tool kit asked for by an employer
• A bus pass or fuel for the first weeks
• Rent or food until the first payday

Who is eligible

Adults aged 18 or over qualify if they are looking for paid work of at least 30 hours a week, or 20 hours for sole parents, are citizens or residents, and are seeking or starting a job in New Zealand. They also need to be on a main benefit, registered as a job seeker, or in another situation the page lists, such as a short gap between jobs.

Your income and cash assets, and your partner's, are taken into account, and you cannot have had the grant in the last 52 weeks. Young people aged 16 or 17 may apply in specific circumstances, for example if they rely on other government assistance or have a dependent child.

How to apply

Call Work and Income on 0800 559 009. An adviser will discuss your situation and tell you which information to provide, and you may be asked to complete an application form. Do this before spending the money, as help is usually decided on costs not yet paid.

Keep any job offer letter, quotes for tools or clothing, and details of the start date. The clearer the link between the cost and the job, the easier it is to assess.

When a loan still makes sense

The grant has a ceiling. A vehicle needed for a job far from public transport, or a larger set of tools, can cost more than $1,500. In that case a low-cost loan may fill the difference.

Good Shepherd New Zealand offers Good Loans without interest or fees for low-income households, with up to $7,000 available for buying a car and funds paid directly to the seller. Its published rules exclude purchases that Work and Income can help with, so start with the grant, then ask Good Shepherd about what remains.

Illustration: a move for a new job

Picture someone offered a warehouse job in another town, starting in ten days. They request the grant for the relocation and work boots, and keep a small reserve for the first fortnight of rent. If a car is genuinely needed, they ask about an interest-free loan with the grant already committed.

A fast, expensive loan taken out on day one would cost far more than the boots it paid for. The scenario is invented for illustration and shows no guaranteed outcome.

Things to watch

Be careful with employers or agents who ask you to pay for a training course, a uniform or a visa processing fee before starting. Genuine employers do not charge you to begin paid work, and anyone asking for money transfers should be treated with caution.

If the numbers do not add up, MoneyTalks offers free, confidential help by phone on 0800 345 123, text on 4029 or chat. A financial mentor can check your budget for the first month of work and whether other entitlements apply.