To make it simple, we have broken down each of the benefits and their eligibility criteria. We will update this article as further information is released. This article was last updated on 6 October 2021 and provides additional information about the Wage Subsidy (4) and Resurgence Support Payment.
Wage Subsidy August 2021 (4)
As Auckland will be at Alert Level 3 until at least 12 October 2021 (and likely for a period beyond that), a fourth round of the 2021 Wage Subsidy has been made available to eligible employers throughout New Zealand. A further two-week payment is available from 1 October 2021. This fourth round is described as the Wage Subsidy August 2021 (4) – despite becoming available in October.
What is it?
The wage subsidy supports affected employers (businesses) and self-employed persons. It is paid directly to them. As part of the application process, a business must complete a Declaration, which includes (among other things):
- committing to retaining their employees;
- use the subsidy to support paying the named employees their ordinary wages or salary as specified in the employee’s employment agreement;
- not make any changes to the employee’s employment agreement, including rates of pay or hours of work without agreement;
- pay the full amount of the subsidy to each named employee; and
- use best endeavours to pay at least 80 percent of each named employee’s ordinary wages or salary.
Note: as above, you must have written agreement with the employee if their hours of work or pay rate is going to change.
Make sure that you check the wording of the August 2021 (4) Declaration. Businesses cannot recycle or repeat their previous applications and must ensure that they meet the current criteria and can comply with all of the relevant Declaration.
Eligible businesses / self-employed persons can receive:
- $600 per week for each full-time employee / self-employed person (more than 20 hours per week); and,
- $359 per week for each part-time employee / self-employed person (fewer than 20 hours per week).
Who is eligible?
Businesses or self-employed persons that are affected by the continuation of Alert Levels 3 or 4, and have experienced (or expect to experience) a 40% decline in revenue from 28 September to 11 October, compared to a typical 14-day period of revenue in the six weeks prior to the move to Alert Level 4 (i.e. prior to 17 August 2021). Businesses or self-employed people that have a highly seasonal revenue will be eligible if they have at least a 40% decline in revenue from 28 September 2021 to 11 October 2021, when compared to the same 14 consecutive days in 2020 or 2019.
The application process requires businesses / self-employed persons to make various declarations regarding their eligibility.
This includes declaring that the business will meet the ‘revenue decline’ eligibility criteria, and that it has taken active steps to mitigate the impact of the lockdowns since 17 August 2021, such as engaging with banks and drawing on cash reserves.
In relation to employees, the 2021 declaration requires each business to agree that:
- receiving the subsidy does not override existing obligations under employment law including the Employment Relations Act, the Minimum Wage Act, the Holidays Act or the Health and Safety at Work Act;
- it will not make any changes to its obligations under employment agreements (including to pay, hours or leave) without the agreement of employees;
- it will not unlawfully compel employees to take leave;
- it will retain the named employees for the period of the subsidy;
- it will use the subsidy to support paying the ordinary wages or salary of the named employees, pay at least the full amount of the subsidy to workers (unless their ordinary wages are lawfully below the subsidy amount) and use best endeavours to pay at least 80% of each named employee’s ordinary wages or salary.
Businesses also need to speak to their employees and get their consent to share information with the Ministry of Social Development, specifically, their name, date of birth, IRD number and employment type (whether they are working less than 20 hours or more than 20 hours).
Note: Businesses cannot apply for the August (4) subsidy until two weeks after they applied for the August (3) subsidy.
If an employer is already receiving a Short Term Absence or a Leave Support Scheme payment, the employer is not eligible to receive the Wage Subsidy in respect of that employee.
Applications for the August 2021 (1), (2) and (3) subsidy have now closed. Applications for the August 2021 (4) subsidy opened at 9:00 am on Friday 1 October 2021 and will close at 11.59pm on Thursday 14 October 2021.
You can find out more information about the Wage Subsidy here.
Resurgence Support Payment (RSP)
What is it?
The Government has announced a third round of the RSP is available to eligible employers affected by the Alert Level change (above level 1).
Those eligible can receive the lesser of:
- $1,500 plus $400 per full-time employee, up to a maximum of 50 employees; or
- four times the actual revenue drop experienced by the applicant.
Who is eligible?
Businesses, self-employed persons or sole traders that:
- have experienced at least a 30% drop in revenue or capital raising ability over a continuous seven day period, due to the Alert Level change;
- have been operating for at least 1 month before the Alert Level increase on 17 August 2021. The original criteria was 6 months; and
- can be considered viable and ongoing.
In addition to this, the start date for the continuous seven day period where the business, self-employed person, or sole trader experiences the drop in revenue, must be in the following affected period:
- for RSP (1), on or after 17 August until immediately before all of New Zealand returns to level 1;
- for RSP (2), on or after 8 September until immediately before all of New Zealand returns to level 1; and
- for RSP (3), the period has not yet been announced.
Passive income, such as interest, dividends or rent, is excluded from the measure of revenue. State sector organisations are excluded from receiving the RSP but can apply to the Minister of Finance for an exemption.
Receiving RSP (1) or (2) does not prevent you from receiving RSP (3). Separate applications need to be made for RSP (1), (2) and (3).
Receiving any other Government COVID support does not affect eligibility for the RSP.
Applications for the RSP (1) in relation to the Alert Level increase announced on 17 August 2021 opened at 8.00am on 24 August 2021.
Applications for RSP (2) opened on 17 September at 8am.
Applications for RSP (3) open on 8 October at 8am.
Applications for RSP (1),(2) and (3) will remain open until one month after all of New Zealand returns to Alert Level 1.
Find out more about the RSP here.
Short Term Absence Payment (STAP)
What is it?
The STAP is available at all Alert Levels. It is a one off payment of $359 for businesses or self-employed persons to pay each eligible worker who cannot work because they are awaiting the result of a COVID-19 test.
Who is eligible?
STAP is available to businesses on behalf of their employees, and self-employed persons. To be eligible, the employee or self-employed person must be following public health guidance to:
- stay at home while waiting for the result of their own, or their dependents’, COVID-19 test result; or
- stay at home while waiting for a household or close contact’s test result; and
- be unable to work from home.
You can find more information about the STAP here
Leave Support Scheme (LSS)
What is it?
The LSS is available for businesses and self-employed persons who need to self-isolate and can’t work from home. The LSS is paid as a lump sum and covers two weeks of employment per eligible employee. You cannot apply for less than two weeks. The LSS is paid at a flat rate of:
- $600 per week for each full time employee / self-employed person (more than 20 hours per week); and,
- $359 per week for each part time employee / self-employed person (fewer than 20 hours per week).
If you receive the LSS for an employee who returns to work in less than two weeks, you will need to repay the remaining amount or reallocate it to another eligible employee.
Who is eligible?
In summary, employees or self-employed persons that:
- have been told to self-isolate by a doctor or health official; and
- cannot work from home.
This includes those who:
- are sick with COVID-19;
- have been directed to self-isolate;
- are the parent or caregiver of someone who has been directed to self-isolate;
- are considered a person of high risk if they contract COVID-19 and a medical practitioner has told them to self-isolate.
You should carefully check the eligibility criteria, as this has changed several times. The full eligibility criteria, and more information about the LSS, can be found here.