In response to COVID-19 the Government is acting to support the economy with a $12.1 billion support package.
How businesses can access COVID-19 support
UPDATE: As of 3pm Friday 27 March 2020, the previous separate sick leave payment scheme has been folded into this Wage Subsidy Scheme. The original sick leave scheme was designed when few people were in self-isolation. The Government is working on arrangements for those in essential work who require sick leave due to COVID-19.
Wage subsidies are available for businesses in all sectors and regions that can show a 30% decline in revenue for any month between January and June 2020 compared to the year before (including projected revenue).
Self-employed people with variable monthly incomes are eligible if they can demonstrate revenue loss against the previous year’s monthly average (eg. 30% loss of income attributable to COVID-19 comparing March 2020 to the average monthly income in the period March 2019 to March 2020).
If eligible, employers would be paid $585.80 per week for full-time staff, and $350 for part time. They will be paid in a lump sum.
The support will be available for twelve weeks.
Businesses who are collecting the wage subsidy are now required to pass on 100% of the value of the subsidy to the worker they are collecting it for, for the entire 12 week period. Business may not collect the subsidy and then lay off the worker they have collected it for, or only pass on a portion of the subsidy. Even if a business is closed - if they are collecting the subsidy they must pass it on.
Business are encouraged to continue to try to top up wages to 80% if they are able but this is not mandatory.
The form is very simple, and the expectation is that payments will be expedited quickly. You must provide the following information:
- Your IRD number.
- Your business name.
- Your business address.
- The names of your employees.
- Your employee IRD numbers.
- Contact details for your business and your employees.
More information: Work and Income
Wage Subsidy Cap Removed
The Government has removed the cap on wage subsidies that can be paid to employers affected by COVID-19. The cap of $150,000 per business is gone.
This applies to all New Zealand employers, contractors, sole traders, self-employed people, registered charities and incorporated societies. You are now able to apply for a wage subsidy for all your staff.
If you have already applied for and been granted the wage subsidy for your employees and MSD has capped the amount paid, you don’t need to do anything because we will top up the difference.
If you have applied for the wage subsidy for your staff, and claimed only enough to meet the cap, once you have used this subsidy, you can reapply.
For examples of calculating wages for employees in different circumstances, please see the case studies at the end of this page
If you’re not sure what assistance may be available, don’t know who to contact for help, call the free government helpline on: 0800 779 997 (8am–1am, 7 days a week) or on 0800 22 66 57 (9am-5pm, Monday-Friday).
Non-essential business + Minimum waged worker
James is a barista at a Wellington café. James earn the minimum wage. The café is closed for the lockdown and has had a 30% loss in revenue. James’ employer cannot afford to pay any wage to James, but wants to keep him on. James does not want to use his annual leave entitlements.
James’ employer can access the wage subsidy and pay $585.80 per week to James, without James being required to do any work. James retains his annual leave entitlements to use at a different time.
Able to do some work from home + Full-time worker
Sam is a civil engineer. He usually works 40 hours per week at $30 per hour, with a usual gross income of $1200 per week. The business is non-essential and closed for the lockdown and has had a 30% loss of revenue. Sam can do some work from home over this period. He works 30 hours per week for the duration of the Alert Level 4 lockdown period.
Sam’s employer can access the wage subsidy and pays Sam his usual salary at the agreed reduced hours, which is $900. Sam’s employer can use the $585.80 per week to subsidise Sam’s wages, this means Sam’s employer will top up the wage subsidy with $314.20 to compensate the hours Sam worked.
Non-essential business + Can do some work from home
Phil is an HR advisor in a medium-sized business and works full time. The business is non-essential and closed for the lockdown and has experienced a 30% loss of revenue. Phil can do some work from home. He does 8 hours per week. His hourly rate is $25 per hour.
Phil’s employer can access the wage subsidy. Their revenues have dropped so much that they are worried as they will be unable to retain their staff. Under employment law, Phil must receive $200 per week for the hours worked. His employer can use the remaining money from the subsidy for other affected employees.
Non-essential business + Unable to work
Craig is a waiter at a successful restaurant chain that also needs to close during the lockdown. Craig was getting paid $1,000 per week. Craig’s employer has committed to paying full wages to their staff as they know that such workers will be in demand as the lockdown ends. The restaurant has suffered a 30% loss in revenue due to COVID-19.
Craig’s employer can access the wage subsidy scheme to pay Craig $585.80 per week, and the employer can then top that up with $414.20 per week to ensure Craig receives his full income.
Essential business + Able to work
Steve is an essential services worker, ensuring certainty of electricity supply. Steve is really busy, working his normal hours and getting paid at his normal rate, and his business has not been affected by COVID and does not require support to pay or retain its staff.
Steve’s employer does not need to apply to the wage subsidy scheme.
The Taranaki Chamber team are now working remotely. You can continue to contact the Chamber for business enquiries, advice and support. Alternatively, you can contact a specific team member via email or mobile..