The NZ Government has announced a Wage Subsidy scheme as one of the measures to assist businesses impacted by COVID-19. The scheme was created with effect from 17 March 2020 but then modified with effect 27 March 2020. Overview details can be found at Employment New Zealand website.
The Wage Subsidy scheme helps businesses that need to shut down under Alert Level 4, pay workers for an extended period of time. The scheme supports employers and their staff to maintain an employment connection and ensure an income for affected employees, even if the employee is unable to actually work any hours. It is also available to employers who recently let employees go because of COVID-19, provided they re-hire those employees.
Employers that meet the eligibility criteria can apply to Work and Income to receive a subsidy on behalf of named employees. (Refer to https://workandincome.govt.nz/products/a-z-benefits/covid-19-support.html#null for eligibility. Refer to the declaration details which must accompany the application.) The subsidy is paid as a lump sum (12 weeks) but is a weekly 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.
Employers must make their 'best efforts' to pay their staff at least 80% of their usual wages. If the usual wages are less than the subsidy amount, the usual wages should be paid and the surplus subsidy is used by the employer to help fund other wages. If the employer is unable to meet the 80% then they must pass on the full subsidy as a minimum.
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