How to pay off your WINZ Work and Income debt

WINZ Work and Income is the government benefit scheme throughout New Zealand. It provides employment services and financial assistance for those who need some extra help getting by. Work and Income offers a wide range of services and payment schemes that are available to pretty much everyone. It’s not hard to find a benefit that suits your personal situation.

Most of the time, the money you receive from Work and Income is ‘free’. However, there are some instances where you will actually need to pay back the money WINZ gives you. If this is the case for you and you find yourself in a debt to Work and Income, we have put together some tips on how to pay off your debt. We’ll also show you how to avoid any further debt.

Generally, WINZ Work and Income will work with you to come up with a comfortable repayment plan. The most important thing is to not just ignore your debt because it’s definitely not something that’s going to go away. The longer you leave it, the worse it will get.

Follow our tips on paying off your WINZ debt and relieve yourself of all your money stress.

Examples of debt with Work and Income

There are 2 common forms of debt that a person can have with Work and Income. These include:

• Recoverable assistance or benefit advances – This generally comes in the form of a loan or cash advance. Some Work and Income benefits will allow you to apply for a cash advance. This just means that Work and Income will pay you a certain amount of money. You will then pay that money back gradually through your regular WINZ payments. These are usually to cover things that you can’t afford at the time.
• You were paid too much – Sometimes it happens that Work and Income has paid you too much. This can happen if you haven’t reported your income before your pay date, failed to tell them about an increase in your income or you haven’t told them about a change in circumstances (e.g. you started working, have a new partner, or went overseas).

Work and Income may also pay you too much due to common error (if this is the case, you must notify them immediately to avoid unnecessary debt).

A common reason for the occurrence of debt with Work and Income is when recipients apply for a loan and then their benefit payments end without their loan being paid off. From here it is quite easy to forget about your debt which can result in more severe circumstances. The last thing you want is to be contacted by a debt collector chasing up your payment.

Therefore, it is a good idea to follow our tips on how to pay off your Work and Income debt. It will also help you avoid getting yourself into any further debt.

How to make payments to WINZ Work and Income

There are a number of different ways you can pay off your WINZ Work and Income debt. These include:

Repaying debt while still receiving payments

– This is generally the easiest way to repay your WINZ Work and Income debt. These repayments just get taken out of your regular Work and Income payments until your debt is paid off. If you are receiving a benefit, Accommodation Supplement or NZ Superannuation, it is quite easy to work out an amount that you can afford to be taken from your weekly payments.

Repaying debt while you are not receiving payments

– If you are not receiving payments from Work and Income any money you owe will need to be paid back manually. This is also the case is you are receiving extra help payments, such as Childcare or Disability Allowance. Generally, you can pay off your debt in a lump sum if you are able to. Otherwise, you’ll be able to make weekly repayments at an amount that is affordable.

Repaying your debt from New Zealand

– The most common form of repayment when you are inside New Zealand is online using a credit or debit card. Other forms of repayment include internet or phone banking, deductions from your own employment wages or automatic payments set up with your bank.

Repaying your debt from overseas

– If you have debt with WINZ Work and Income but you are currently overseas, it is still quite easy to make your repayments. The easiest and most popular method of repayment is through an online money transfer. Work and Income recommend making your transfer via OrbitRemit, which is a free money transfer service. Other forms of payment include online payment using Visa or debit card and cheque or bank draft. You could also elect someone to make payments on your behalf while you are away.

For more information on how to make payments to WINZ Work and Income, visit: https://www.workandincome.govt.nz/on-a-benefit/debt/index.html#null

How to get yourself out of debt with WINZ Work and Income

Setting up repayments is easy enough to do when paying off your debt. The hard part is adjusting your budget so you can afford the repayments as well as your everyday life. Paying off your debt requires a certain level of commitment that not everyone is willing to give. The most important thing is to remember that the loans that WINZ Work and Income give you is not your money. You’ve borrowed it, meaning that you must pay it back.

It is also important to not just ignore your debt. Debt is a bad headache but it’s not one that will go away. The longer you leave, the worse your situation will get. Ignoring your debt will have a negative impact on your credit rating as well, which could prevent you from seeking out another loan in the future.

If you’re not quite sure how to incorporate your WINZ Work and Income debt repayments into your budget then we will do our best to show you how.

Create a budget

The first step to solving your WINZ Work and Income debt problem is to establish a budget. If this is something you struggle with then you can use personal finance tools such as Pocket Smith. Planning out your budget will help you establish the expenses that aren’t overly necessary which will, in turn, help you cut costs.

Make cuts to your spending

This is always easier said than done. However, it is completely necessary in order for you to make room in your budget for your debt repayments. Just cut out the things that aren’t completely necessary. For example, you might not need that daily $5 coffee, or you could start packing your lunch for work instead of eating out every day. Little adjustments like this will make a big difference to your budget.

The $5 you save on coffee each day can go towards your loan repayments. That’s essentially $25 a week you could be putting towards paying off your WINZ Work and Income debt. This could also allow you to comfortably pay a bit more than is required each week. The quicker you pay off your debt the better. So, try to throw in a few extra dollars when you can.

Try and make some extra cash

If you’re not great at budgeting with the money you already have, try doing something that will add to your cashflow. That way, all that extra money you earn can go towards paying off your debt with Work and Income New Zealand.

You could sell your clothes or other worthy belongings that you no longer have use for. Or perhaps you could provide some kind of service such as tutoring, babysitting or lawn mowing. Do whatever you can to stretch your budget so you can pay off your debt without too much stress.

Never fall behind

Like we mentioned before, it’s important to stay on top of your debt to avoid getting yourself into a stressful situation. You don’t want for your debt to incur interest or hurt your credit rating so you need to be vigilant with your repayments. It’s a good idea to set up a direct debit through your bank.

This way, the payments will just come out of your account each week and you won’t need to worry too much about it. This will limit the chances of you forgetting to make a repayment to WINZ Work and Income. You will just need to keep up with making sure there is enough money in your account each time. That can be done by following our tips above.

If you’re not in a situation where you can set up a direct debit then set a reminder for yourself each time a payment is due. You could do this on your phone or even on your computer at work. Anywhere you know you will definitely see it.

Get a debt consolidation loan

If you’re struggling with multiple debt repayments then it might be a good idea to apply for a debt consolidation loan. This will just mean that you use the loan to pay off your other debts and then you’re just left with a single payment, instead of multiple ones. You can apply for a debt consolidation loan through us. Just head back to our home page  and you’ll be able to get started with your application.

How to prevent getting into debt with WINZ Work and Income in the future

Tell WINZ Work and Income about any changes

As mentioned before, it is quite common to fall into debt with Work and Income when you fail to tell them if your circumstances have changed. In order to avoid getting into debt in the future, make sure you always report your income by the due date. If your income increases, make sure you report the change as soon as it happens.

We know it’s nice to get paid a few extra dollars every now and then but there’s no point if you’re just going to have to pay it back later.

Make sure you also notify WINZ Work and Income if you get into a new relationship or start a new job so you can ensure you’re receiving the correct benefit. Doing these things may be a hassle initially but they will make your life easier in the long run.

For more information on what you need to report to Work and Income, click here.

Change your spending behaviour more permanently

If the reason you feel into debt with WINZ Work and Income in the first place was because you applied for a loan or cash advance, then it would be a good idea to adjust your spending habits so you won’t need to do this again.

Take the tips that we mentioned above and work them into your everyday life, even after you’ve paid off your debt. Stick to your budget plan and continue to cut costs wherever you can.

Build an emergency fund

Sticking to a budget and changing your spending behaviour should allow for you to build an emergency fund. This will be helpful for when you need to cover unexpected expenses that pop up. It’s a good idea to try and build your emergency fund to $1,000 initially and then just keep going with adding money to it when you can. This will mean that the next time you are faced with something that you’d normally take a loan out to afford, you won’t need to.

What to do if you’re not coping with your debt

The best thing to do when you’re not coping with your debt is to get in touch with WINZ Work and Income immediately to explain your situation. They might be able to help you with your stress by reducing payments or providing extra income support.

The worst thing you can do is ignore it. If Work and Income New Zealand are aware that you are having financial difficulty, they will be much more understanding. Whereas, if you don’t report your situation, you could face much more serious consequences.

Follow these tips for paying off your WINZ debt and avoiding debt in the future and you’ll be able to put your money stress to bed. WINZ Work and Income is there to help so as long as you do right by them, you could get yourself out of a jam easily. Otherwise Loans NZ will be here to help you with any other money troubles you may be having.

To finish, we just want to further establish that Loans NZ has no affiliation with Work and Income New Zealand. We are online loan finders and we are simply able to accommodate New Zealand residents who receive their income from WINZ. So, if you are currently receiving NZ Work and Income, you may still be eligible for a loan through us!