NZ Wage Subsidy
IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.
The New Zealand government has announced a wage subsidy for employers who continue to employ staff during to the COVID-19 lockdown and while reopening the economy.
Here’s what’s new since the video was recorded:
(8 June) In the budget the government announced an extension to the Wage Subsidy. From June 10, business that have suffered a 40% reduction in turnover any 30 day period between 10 May and the date of application as compared to 2019, will be entitled to the wage subsidy for a further eight-week period. High growth and new firms will also be eligible. Here’s what you need to know:
- New period will be 8 weeks from 10 June 2020 until 1 September 2020.
- Eligible employers will need to reapply through Work and Income once their current 12-week subsidy has come to an end.
- The weekly rates will be the same as under the current Wage Subsidy ($585.80/week for employees working 20 or more hours). It will be paid to the employer as a lump sum ($4686.40 for employees working 20 or more hours).
- To be eligible the employer must have experienced a revenue loss of at least 40% for a 30 day period (and consecutive 30 days between 10 May and the date of application), compared to the same period last year. There are different calculations for organisations where this is not possible, such as new businesses or pre-revenue firms
- Applications open 10 June
Here’s the outline from the video:
* = updated since video
- Incentive to KEEP staff employed
- $585.80 per week ≥ 20 hours
- $350.00 per week < 20
- Lump sump payment of 12 weeks = $7029.60/$4200 – up to 21 FT employees (* round 2 for a further 8 weeks from June 10 to Sept 1 = $4686.40/$2800.00)
- You must be able to prove a 30% decline in revenue year-over-year for any ONE month between Jan to June 2020 (* round 2 requires a 50% decline)
- Employees must be earning for at least 80% of their pre-crisis income
- Must have taken steps to mitigate the impact (talk to bank/financial adviser)
- Apply through MSD: www.workandincome.govt.nz
- Paid within 5 days of application