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COVID–19: The Wage Subsidy information

Photo by Leroy de Thierry on Unsplash

The Government has recently broadened its wage subsidy scheme in an attempt to keep more people employed. Many landlords have questions about this incentive, what it covers, and how it works. Here are some answers to the most commonly asked questions.

Why was it introduced?

The Government introduced the wage subsidy to try and help businesses get through this period by keeping their workers with some level of wage or salary coming in.

The solution is attempting to be "one-size fits all" scheme, so changes and adjustments are expected. But the main idea is for businesses to do the right thing, take up the offer from the Government and simply pass it on to their employees.

Who is eligible?

Businesses, contractors, sole traders, self-employed people, registered charities and incorporated societies can receive a subsidy to help pay wages if they can show a 30% decline in actual or predicted revenue for any month between January and June 2020 compared to the same month last year.

How much is paid?

The wage subsidies are paid at a flat rate and allow a full-time worker to be subsidised $585 a week, and a part-time worker (working less than 20 hours per week) $350 a week, for 12 weeks.

Budget 2020: The wage subsidy scheme has been extended by a further eight weeks. The scheme will be up and running by early June, with more details still to come.

Important points:
- Businesses are required to keep their employees in employment for the 12 weeks of the subsidy to be eligible.
- If a part-time worker earns less than $350 subsidy, their usual wages are to be paid. - Employee payment is still subject to PAYE and normal deductions.

Up until 27th March, the employers were required to keep paying staff at least 80% of their incomes to be eligible for the subsidy. This rule has now been scrapped. The employers are now asked to make best efforts to pay employees 80% of their normal wages but if they can't, at the least pass the full amount of the subsidy to their workers.

The Leave Payment scheme is no longer available

The Leave Payment was originally created to assist employers when their staff couldn't work due to self-isolation requirements, caring for the sick or self-isolated dependants. Because the whole country is now in lockdown, the scheme is no longer fit for purpose. The initiative will now be folded into the Wage Subsidy scheme.

Applications already submitted will continue to be processed and paid.

For more information on the Wage Subsidy scheme and to how to apply, please visit the Work and Income site

The information contained in this article is exclusively for promotional purposes. It does not in any way constitute legal advice and should not be relied upon as the basis for any legal action or contractual dealings. The information is not, and does not attempt to be, a comprehensive account of the relevant law in New Zealand. If you require legal advice you should seek independent legal counsel. myRent.co.nz does not accept any liability that may arise from the use of this information.


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