4.03.2021

COVID-19 – Government support explained

With a myriad of government benefits available to help employees and businesses cope with the COVID-19 lockdowns, it is easy to become overwhelmed with the differing eligibility requirements and various government options available.

To make it simple, we have broken down the latest government offerings and the eligibility criteria of each.

Wage Subsidy March 2021 

What is it? 

The wage subsidy has been re-introduced to support employers and self-employed people affected by the latest rise in alert levels.  It is paid directly to the employer/self employed person.  As part of the application process, the employer needs to commit to retaining the employee in employment.  

The wage subsidy remains at the same level as for previous lockdowns; $585.80 a week for each fulltime employee (more than 20 hours per week), and $350 a week for each part time employee (fewer than 20 hours a week).  The wage subsidy is paid to the employer for a two week period, and the employer must pass it on to the affected employees.  

Who is eligible?

Businesses that have experienced (or expect to experience) a 40% decline in revenue over a consecutive 14-day period between 28 February and 21 March, compared to a typical 14-day period in the 6 weeks between 4 January and 14 February 2021.

The application process will require the employer to make various declarations regarding eligibility, including having spoken to the affected employees.

Exclusions 

If the business is already receiving a Short Term Absence payment or a Leave Support payment in respect of an employee, it cannot also receive the wage subsidy.  However, businesses can apply for both Resurgence Support Payments and the wage subsidy.

Important dates

  • Applications open (online) from 1pm on Thursday 4 March 2021
  • Payments start from Monday 8 March 2021

You can find further information about the March Wage Subsidy here.

Resurgence Support Payments (RSP):

What is it? 

RSP is a payment available for businesses affected when the alert level is raised above level 1 for a week or more. This also applies to sole traders.

Eligible businesses can apply to receive the lesser of:

  • $1,500 plus $400 per fulltime employee, up to a maximum of 50 employees; or
  • Four times the actual drop in revenue. 

Who is Eligible? 

Businesses that:

  • Experience at least a 30% drop in revenue or capital raising ability over a 7 day period, due to the increased alert level; and
  • Have been in business for at least 6 months; and
  • Are considered a viable and ongoing business.

Exclusions:

Income that is received passively (dividends, rent, interest) are excluded from the measurement of revenue. State sector organisations are also excluded, but have other options available upon application to the Ministry of Finance.   

Receiving other forms of COVID-19 support does not affect the applicant’s eligibility for receiving RSP.   

Important Dates: 

  • Applications for the February lockdown are currently open and close on 22 March.
  • Applications for the March lockdown open on 8 March and close 1 month after a nationwide return to level 1.

You can find further information about RSP payments here.

Short Term Absence Payment (STAP): 

What is it? 

STAP is a one off payment of $350 for employers to help pay employees who are unable to work while awaiting the results of a COVID-19 test.

Who is eligible? 

STAP is available to employers on behalf of employees as well as self employed persons. To be eligible the worker must:

  • Be required to miss work to stay at home while awaiting a COVID-19 test result; and
  • Be unable to work from home.

Parents/caregivers who miss work to support dependants awaiting results are also eligible.

You can find further information about STAP payments here.

Leave Support Scheme (LSS):

What is it?

LSS is a payment of $585.80 (full time employees) or $350 (part time employees) that is available for those who need to self-isolate and can’t work from home.  LSS previously covered employees with COVID like symptoms that were directed to self isolate, but this is now covered by STAP as described above.

LSS is paid as a lump sum and covers two weeks of employment.  You cannot apply for less than 2 weeks.  If an employee returns to work prior to this, the remaining funds must either be reallocated to other eligible employees or returned.

Who is eligible? 

Employees that: 

  • Have been told to self-isolate by a doctor or health official; and
  • Cannot work from home.

This includes people who:

  • Are sick with COVID-19;
  • Have been directed to self isolate by a medical officer;
  • Are a close contact with someone who has COVID-19 and have been told to self isolate through the contact tracing process;
  • Are the parent/caregiver of a person who has been directed to self isolate for the reasons above;
  • Are considered a person of high risk if the virus is contracted and have been told to self isolate by a health professional while there is active community transmission. This extends to include members of the same household if directed.

You can find further information about LSS payments here.

If you have any questions about COVID-19 employment relief initiatives contact the Employment Team or your usual contact at Hesketh Henry.

 

Disclaimer:  The information contained in this article is current at the date of publishing and is of a general nature.  It should be used as a guide only and not as a substitute for obtaining legal advice.  Specific legal advice should be sought where required.

 

 

 

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