COVID-19 Wage Subsidy Information & Common Questions

30 March 2020

 

COVID-19 Wage Subsidy Information & Common Questions

 

Last updated 28 March 2020:   https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html#null

https://workandincome.govt.nz/products/a-z-benefits/employer-questions-and-answers.html?fbclid=IwAR3U8g3qC01XX7QW_PGAMdzAcP8BdPBO7j3Cm0_fyo6hrYITpBrMwfFP3F0#null

 

1. Leave payment - stopped from 3 pm on 27 March 2020.

 

2. How much can I get?

  • $585.80 for employees (employer applies) or self-employed working 20 hours or more per week.
  • $350 for employees (employer applies) or self-employed working less than 20 hours per week.
  • Paid lump sum and covers 12 weeks.  Payments have been very quick and should be less than 5 working days.
  • This is NOT subject to GST.

 

 

3. What if you applied once already for Wage Subsidy, but missed an employee?

Yes, you can make an additional application.

Under already applied for Wage Subsidy or Leave payment on this link:

https://workandincome.govt.nz/products/a-z-benefits/employer-questions-and-answers.html?fbclid=IwAR3U8g3qC01XX7QW_PGAMdzAcP8BdPBO7j3Cm0_fyo6hrYITpBrMwfFP3F0#null

 

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4. If employee is part-time (less than 20 hours) and earns less than $350 Gross normally per week, what do you pay them?

    Or if 20 hours or more and earns under $585.80 Gross normally?

Their normal Gross wage, which could be under $350 for part timers, or under $585.20 for more than 20 hours.

Under your obligations: https://www.workandincome.govt.nz/online-services/covid-19/declaration-wage-subsidy.html

 

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Also this under Paying your staff https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html#null

pic3covid

 

 

 

 

5.  Shareholders?

In general, shareholders would receive PAYE wages or a shareholder salary.  This makes them employees.

Best to check with your accountant first if not sure, and most likely use employer application for wage subsidy.

 

 

6.  Do you have to pay the employee 80% of their normal wages?

No.  You have to use your best endeavours to pay at least 80% of the employees normal wages

MUST – pay the full amount of the subsidy (this is gross wages, so will be less PAYE and other deductions)

Under your obligations https://www.workandincome.govt.nz/online-services/covid-19/declaration-wage-subsidy.html

 

pic4covid

 

 

 

 

 

Also this, under Paying your staff https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html#null

 

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7.  Employee payment is still subject to PAYE and normal deductions.  So, if getting just the Wage Subsidy of $585.20:

pic3c

 

 

 

 

 

 

 

 

 

 

8.  Do you have to retain your employee for the period you receive the subsidy for?

YES.

Under your obligations https://www.workandincome.govt.nz/online-services/covid-19/declaration-wage-subsidy.html

Also this, under Employer obligations https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html#null

pic6c

 

 

 

 

 

9.  When and how long is the period?

12 weeks from 17 March 2020.

 

10.  Can you make employees use their leave entitlements or sick pay for the period you receive the subsidy?

No.

Under your obligations https://www.workandincome.govt.nz/online-services/covid-19/declaration-wage-subsidy.html

 

11. To get the subsidy, you need to:  (all under https://www.workandincome.govt.nz/online-services/covid-19/declaration-wage-subsidy.html)

  1. 30% or more decline in actual or predicted revenue attributable to COVID-19 (Do you have a budget to prove that your predicted revenue is less)?
  2. Must take active steps:
    • Ask insurance
    • Talk to banks, increase OD, for example
    • Talk to accountants.
  3. Discuss your application with your employees and gain their consent to information sharing.

 

12.  Could you have to repay the wage subsidy?

Yes, if you don't meet the items above, or you get insurance.

Under your obligations https://www.workandincome.govt.nz/online-services/covid-19/declaration-wage-subsidy.html

 

13.  If you applied before 27 March 2020, do the new wage subsidy obligations apply to you?

No, it would be the obligations when you applied.

Under employer obligations https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html#null

 

14.  Rehiring Employees

 Under rehiring employees https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html#null

 

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