COVID-19 Wage Subsidy Extension
A Wage Subsidy Extension payment is available to continue to support employers (including self-employed people), who are still significantly impacted by the COVID-19 pandemic. Applications are open from 10 June 2020 to 1 September 2020.
Key points to consider are:
You can apply to cover the wages of your employees over an 8 week period. You can't apply for the same employee twice.
The subsidy will be paid at a flat rate of:
$585.80 for people working 20 hours or more per week (full-time rate)
$350.00 for people working less than 20 hours per week (part-time rate).
The subsidy is paid as a lump sum and covers 8 weeks per employee from the date you submit your application.
You can apply for the Wage Subsidy Extension for your employee, even if you haven't applied for the Wage Subsidy for them before.
If you have applied for the Wage Subsidy or Leave Support Scheme for your employee, you need to wait until those payments are finished before you can apply for the Wage Subsidy Extension.
You can't receive more than one COVID-19 payment for the same employee at the same time.
Criteria you need to meet in order to apply
Employers who are still significantly impacted by COVID-19 are eligible to apply.
This includes:
registered charities
Non-government organisations (NGOs)
the self-employed and sole traders
if you're also an employee of a business, your employer can also apply for a Wage Subsidy Extension for you
contractors
incorporated societies, and
post-settlement governance entities
local government organisations
kindergartens and Early Childhood Centres.
If you're an eligible employer, you can apply:
for casual employees if they're employed by you at the time you apply, and they would have expected to work during the time you will receive the Wage Subsidy Extension
if you're a shareholder in a business (ie, you work for the business and are paid a wage, salary or draw an income for the work you do)
if you're a partner in a business (ie, each partner is paid a wage, salary or draws an income for the work they do).
You cannot apply for an employee who is on ACC earnings related compensation. But you can apply for them if they've returned to work and are no longer receiving ACC.
Your business must be in New Zealand and your employees must be legally working in New Zealand.
You must have a 40% decline in revenue
Your business must have experienced a minimum 40% decline in revenue for a continuous 30 day period. This period needs to be in the 40 days before you apply (but no earlier than 10 May 2020) and must be compared to the closest period last year. The decline must also be related to COVID-19.
For example, you apply on 29 June 2020. Your 40% decline in revenue must be for a continuous 30 day period between 19 May and 28 June 2020.
If you apply on 10 June, your 40% decline in revenue must be for a continuous 30 day period between 10 May and 9 June (as the 40 days can't start earlier than 10 May).
The 40 day window is to give employers enough time to calculate their revenue loss and engage with their employees before applying for the subsidy. The 40 days cannot start earlier than 10 May 2020. This is to ensure businesses who are still struggling in Alert Levels 1 and 2 can get the support they need.
NOTE: Definition of revenue
Revenue means the total amount of money a business has earned from its normal business activities, before expenses are deducted.
How to determine a decline in revenue
To determine a decline in revenue, you must compare a continuous 30 day period in the 40 days before you apply (but no earlier than 10 May 2020) against the closest period last year.
For example:
if you apply on 11 June 2020, you might compare 12 May-10 June 2020 with 12 May-10 June 2019.
However it may be that another 30 day period will better reflect the decline in revenue.
So you could compare 12 May-10 June 2020 to 4 August-2 September 2019.
For example:
if you apply on 30 June 2020, you might compare 31 May-29 June 2020 with 31 May-29 June 2019.
However it may be that another 30 day period will better reflect the decline in revenue.
So you could compare 31 May-29 June 2020 to 31 April-29 May 2019.
The revenue in the affected period must be at least 40% less than it was in the period it was compared against.
Use a simple calculator like the one here if you’re having trouble figuring out the percentage decline.
Businesses operating for less than a year/with high growth
New businesses which have been operating less than a year, or high growth businesses (e.g. that have had a significant increase in revenue), can apply for the Wage Subsidy Extension.
To determine whether these businesses meet the 40% decline in revenue assessment, they must compare their revenue against a previous month, or 30 days, that gives the best estimation of the revenue decline related to COVID-19.
For example, 40% loss of revenue attributable to COVID-19 comparing the 30 days before you apply to the closest period in 2019.
Obligations
Criteria around mitigating the financial impact and retaining employees applies as it did with the first wage subsidy.
You must mitigate the financial impact:
Your business must have taken active steps to mitigate the financial impact of COVID-19.
This could include:
drawing from your cash reserves (as appropriate)
activating your business continuity plan
making an insurance claim
proactively engaging with your bank
seeking advice and support from:
the Chamber of Commerce
a relevant industry association
the Regional Business Partner programme.
You must retain the employees you’re applying for:
You must retain the employees named in your application for the period of the Wage Subsidy Extension.
Employers are required to agree that, for the duration of the Wage Subsidy Extension, they will retain the employees the subsidy was paid for.
If you are receiving the COVID-19 Wage Subsidy Extension, you must:
try your hardest to pay staff at least 80% of their usual wages;
if that isn't possible, pay at least the rate of the Wage Subsidy Extension that applies to that employee
if the employee's usual wages are lower than the rate of the Wage Subsidy Extension, continue paying that amount for the duration of the subsidy.
How to apply
To apply for the Wage Subsidy Extension, click here.