Wage subsidy
Government has put together a COVID-19 Wage Subsidy for employers in all regions.
It’s to support your business if you're impacted by COVID and face laying off staff or reducing their hours because of COVID-19.
Who can get it
If you're an employer, contractor, sole trader or self-employed, you may qualify to get the COVID-19 wage subsidy.
To qualify:
- your business must be registered and operating in New Zealand
- your employees must be legally working in New Zealand
- the business must have experienced a minimum 30% decline in actual or predicted revenue over the period of a month when compared with the same month last year, and that decline is related to COVID-19
- your business must have taken active steps to mitigate the impact of COVID-19
- you must make best efforts to retain employees and pay them a minimum of 80% of their normal income for the subsidised period.
How much you can get
The COVID-19 Wage Subsidy will be paid at a flat rate of:
- $585.80 for people working 20 hours or more per week
- $350.00 for people working less than 20 hours per week.
The subsidy is paid as a lump sum and covers 12 weeks per employee.
This subsidy is for wages only. It is to help you keep your staff employed while you consider changes that may be needed while the disruption continues, and to ensure the future viability of your business.
The maximum subsidy that can be paid to a business is $150,000. Businesses can only get this subsidy once.
Leave payment
Self-isolation is an important way to slow the spread of COVID-19. From 17 March 2020 the COVID-19 Leave Payment will be available to support people financially if they need to self-isolate, cannot work because they are sick with COVID-19 or cannot work because they are caring for dependents who are required to self-isolate or who are sick with COVID-19.
The COVID-19 Leave Payment will be available for 8 weeks from 17 March 2020. Employers will be able to apply for this more than once.
It will be paid to employers who have eligible employees and they must pass the payment onto their employees in full.
Who can get it
If you're an employer, contractor, sole trader or self-employed, you may qualify to get the COVID-19 Leave Payment.
COVID-19 Leave Payment covers full-time, part-time and casual employees, and contractors who are legally working in New Zealand and who:
- need to self isolate in line with Ministry of Health Guidelines and have registered as needing to self-isolate with Healthline, cannot work from home and their self-isolation is not because they left NZ since the travel restrictions on 16 March 2020 and have since returned or
- cannot work because the person has been diagnosed with COVID-19 or
- cannot work because they are caring for dependents who are required to self-isolate or who are sick with COVID-19
How much you can get
The COVID-19 leave payment will be paid at a flat rate of:
- $585.80 to a person working 20 hours or more per week
- $350.00 to a person working less than 20 hours per week.
Applying for the Wage Subsidy or Leave payment
What form you fill out depends if you pay people to work for you or not.
You pay people to work for you
When you apply you will need to provide:
- your IRD number
- your business name
- your business address
- your New Zealand Business NuHeading 4mber (NZBN)
- the names of your employees
- your employee IRD numbers
- contact details for your business and your employees.
You don't pay anyone else to work for you
When you apply you will need to provide your:
- IRD number
- business name
- business address.
Definitions for Wage Subsidy qualifications
What does registered and operating in New Zealand mean?
This means that a business is:
- registered with the New Zealand Companies Office, and
- physically located in New Zealand, and
- their employees legally work in New Zealand.
Sole traders
Sole traders are not required to be registered with the New Zealand Companies Office, but must have:
- a personal IRD number for paying income tax and GST, and
- government licences and permits for their business needs, and
- qualifications or registrations for their trade or profession.
What does a 30% decline in revenue mean?
This means a business has experienced a 30% decline in:
- actual revenue, or
- predicted revenue (e.g. for businesses who have seen a reduction in bookings such as accommodation providers), and
- that decline is related to COVID-19.
The business must experience this decline between January 2020 and 9 June 2020.
What are active steps to mitigate the impact of COVID-19?
A business must take active steps to mitigate the financial impact of COVID-19 on their business. This could include activating their business continuity plan and seeking advice and support from:
- their bank
- the Chamber of Commerce
- a relevant industry association
- the Regional Business Partner programme.
What does retaining affected staff mean?
Employers are required to agree that, for the duration of the subsidy, they will make best efforts to:
- retain the employees the subsidy was paid for, and
- pay those employees a minimum of 80% of their normal wage or salary.
Employer obligations
The subsidy is being administered under a high trust model and employers will not be asked for verification before the subsidy is approved. However MSD will have the ability to check applications and verify information at a later date. Where false or misleading information has been provided, employers can be subject to fraud investigation.
To receive the COVID-19 Wage Subsidy, the employer must agree:
- that they meet the following subsidy eligibility criteria:
- the business is registered and operating in New Zealand
- their business has experienced a minimum 30% decline in actual or predicted revenue over the period of a month when compared to the same month last year (or a reasonably equivalent month for a business operating less than a year) and that revenue loss is attributable to the COVID-19 outbreak
- they have taken active steps to mitigate the financial impact of COVID-19 on their business activities
- the employer will make best endeavours to retain the named employees and pay them a minimum of 80% of their normal wages or salary for the duration of the subsidy
- the employer has discussed the application with the named employees, who consent to the information in the application:
- being provided to MSD; and
- being used by MSD, and shared with other agencies, to make decisions about the application, and to review and audit any subsidy granted
- the employer consents to the information in the application being verified with other agencies
- the employer is aware that they may be audited, and if they provide false or misleading information, they may be investigated for fraud
- the employer will notify if circumstances change that affect their eligibility
- the employer will repay any amount to which they are not entitled