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Covid-19: Government help for businesses

18 March 2020

The Government has announced a COVID-19 Business Continuity Package to assist businesses struggling due to the impact of the coronavirus pandemic.

COVID-19 Leave Payment Scheme

Support will be provided (to employers, sole traders and the self-employed) for those people unable to work who are in self-isolation, sick with COVID-19, or caring for others with COVID-19.

The payments will be $585.80 per week pre-tax for full time employees (more than 20 hours) and $350 per week pre-tax for part time workers (under 20 hours). The payment does not affect any paid leave entitlements that are owed and is available even if an employee is on paid leave for part of the period. It is not available to those who can work from home during the period of self-isolation, and who can be paid normally by their employer.

Employers need to apply for the leave on behalf of any employee who is self-isolating or sick for a period of up to eight weeks. Payments can be backdated to 17 March, 2020. The payment is made fortnightly by the Ministry of Social Development (“MSD”) to employers, who will then pass it on to the affected employee. It is important to note that .It will not be paid to those who have travelled overseas since 16 March, 2020.

Wage Subsidy Scheme

Wage subsidies will be available for all employers that are significantly impacted by COVID-19 and struggling to retain employees as a result. The scheme will be open to sole traders and the self-employed as well as firms.

In order to be eligible, employers must have suffered, or are projected to suffer at least a 30% decline in revenue compared to last year for any month between January 2020 and the end of the scheme in June 2020. Applications can also be made on the basis of forecast revenue loss within the period of the scheme.

There are certain undertakings required to be given by the employer, including declaring that, on their best endeavours, they will continue to employ the affected employees at a minimum of 80% of their income for the duration of the subsidy period. This is the equivalent of keeping people working four out of five days of the week. Employers must also have taken active steps to mitigate the impact of COVID-19 (eg. engaged with their bank/financial advisor) and sign a declaration form to that effect.

The weekly rates are the same for employees as under the Covid-19 leave, but the payment will be made instead as a lump sum for a period covering twelve weeks. This means employers will receive a payment of $7,029.60 gross for a full time employee and $4,200 gross for a part time employee. The maximum amount any one employer can receive is $150,000.

Applications for the leave payments and the wage subsidies can be made online to MSD via the Work and Income website at www.workandincome.govt.nz with payment targeted no later than five working days of application.

More information on the COVID-19 leave scheme and the wage subsidy scheme, including how to apply, and other support for businesses can be found at www.govt.nz/coronavirus and www.business.govt.nz