Businesses have a number of subsidies available to them to help meet their wage costs during the current lockdown. The following article provides a summary of the subsidies that are currently available and the criteria for accessing them.
August 2021 Wage Subsidy
The August 2021 Wage Subsidy is now open for applications. It provides payment of $600 (gross) per week for full time employees and $359 (gross) per week for part time employees. The subsidy is currently for a period of two weeks, but we anticipate the subsidy may be extended if the lockdown is extended beyond two weeks.
The criteria for eligibility are far more detailed that previous iterations of the subsidy. More information can be found here.
In order to access the subsidy, employers must fill out the declaration which requires (among other things) that:
You must have experienced at least a 40% decline over the period between 17 August 2021 and 30 August 2021 inclusive (this is the revenue test period), compared to a typical 14-day consecutive period of revenue in the six weeks immediately before the move to Alert Level 4 on 17 August 2021.
You must have taken active steps to mitigate the impact of the move to Alert Level 4. This includes (but is not limited to) engaging with your bank, drawing on your cash reserves as appropriate, or making an insurance claim.
You must use your best endeavours to pay at least 80 per cent of each named employee's ordinary wages or salary.
You must pay at least the full amount of the subsidy to each named employee unless the subsidy is more than their ordinary pay.
You must not make any changes to your obligations under any employment agreement, including to rates of pay, hours of work and leave entitlements, without the written agreement of the relevant employee.
You must not unlawfully compel or require any of the employees you're applying for to use their leave entitlements for the period you receive the subsidy in respect of those employees other than as you are lawfully permitted to do.
You must keep the relevant employees employed for the duration of the subsidy. In other words, you cannot give notice of redundancy, or make an employee redundant while you are receiving the subsidy for that employee.
As with previous subsidies, the declaration is found on the Work and Income website. You must obtain your employees' consent to have their personal information shared with Work and Income for the purpose of the subsidy, this includes their name, date of birth, IRD number and employment type (i.e. part time or full time).
Resurgence Support Payment
The Resurgence Support Payment is available where a business or organisation has experienced at least a 30% drop in revenue or a 30% decline in capital-raising ability over a 7-day period, due to the increased COVID-19 alert level. When the RSP is activated, eligible businesses and organisations can apply to receive the lesser of:
$1,500 plus $400 per full-time equivalent (FTE) employee, up to a maximum of 50 FTEs
four times (4x) the actual revenue decline experienced by the applicant.
The maximum payment is $21,500. Sole traders can receive a payment of up to $1,900.
Applications are made via Inland Revenue Department’s website, which should begin accepting from 24 August 2021.
Note that eligible employers may be entitled to both the August Wage Subsidy and the Resurgence Support Payment.
Short-term Absence Payment
Employers can apply through Work and Income NZ for a one-off payment of $350 for each eligible worker. You can only apply for it once, for each eligible worker, in any 30-day period (unless a health official or doctor tells the worker to get another test).
An employee is eligible if they cannot work from home and are following public health guidance to stay home whilst awaiting a COVID-19 test.
You cannot apply for the Short-term Absence payment and the wage subsidy payment for the same employee over the same period.
Leave Support Scheme
Employers can also apply through Work and Income NZ for a 2-week lump sum for an employee who has contracted Covid-19 or has been directed to self-isolate.
You cannot apply for the Leave Support Scheme, Short-term Absence Payment and the wage subsidy payment for the same employee over the same period.
If you have any questions about whether you can access any of the subsidies outlined above, please get in touch with our employment law team.