The recent lockdowns in Auckland prompted the government to offer support to affected businesses nationwide.
“The payment is available to businesses nationally if they can meet the eligibility criteria, not just those in Auckland,” said Finance Minister Grant Robertson. “That decision recognises that many businesses rely on Auckland for revenue, so it is only fair that the payment is available nationally.”
Meeting the eligibility criteria is key. The Ministry of Social Development (MSD) has been carrying out random audits of the 759,000 businesses that received last year’s wage subsidy. At the end of February, MSD had completed 10,902 audits of the wage subsidy and resolved 4750 allegations of misuse. So be warned. If you claim COVID-19 support payments, you must be able to prove you are entitled to them.
Back up Your Claim
“The wage subsidy has been a lifeline for a lot of companies, so take advantage of it if you can,” advises Robbie Bryant, a Senior Associate with Aspiring Law. “Does Auckland's lockdown impact our region? Well we've had a number of events cancelled including Motatapu, which generally brings 1500 to 2500 athletes and their families into town, so there is a lot less business and foot traffic as a result of the lockdowns.”
“The funding is available to businesses in Central Otago but you should make sure you meet all the criteria. You have to provide a statutory declaration to prove a substantial loss of income. And if you are claiming for employees, you have to commit to retaining those employees. As with any statutory declaration just remember to back it up with evidence. If you're unsure whether your business is eligible or not, it might pay to seek accounting and legal advice to help you make the right decision.”
New Wage Subsidy
The Wage Subsidy March 2021 is a payment to support self-employed people and employers to continue to pay employees and protect jobs for businesses affected by the rise in alert levels. Payments started this week, from Monday 8 March and applications close 21 March at 11.59pm.
Businesses can apply for wages cover over a two-week period at the following rates:
- $585.80 a week for each full-time employee retained for 20 hours a week or more;
- $350 a week for each part-time employee retained (less than 20 hours a week).
If you employ casual workers or hours fluctuate, then calculate the average hours over the last 12 months; or, if shorter, calculate the average over the period of employment. Employers are required to provide statutory declarations.
Additional Support Payments
In addition to the wage subsidy, there are two additional COVID-19 support payments available to businesses so they can keep paying staff who are directly affected:
Short-Term Absence Payment (STAP)
The COVID-19 Short-Term Absence Payment is available for businesses, including self-employed people, to help pay their workers who cannot work from home while they wait at home for a COVID-19 test result. This is a one-off payment of $350.
Businesses can apply for the Short-Term Absence Payment if they’ve been advised that their worker, or a self-employed person, is:
- staying home while waiting for their COVID-19 test result, in accordance with public health guidance, or are;
- the parent or caregiver of a dependant who is staying home while waiting for their COVID-19 test results, in accordance with public health guidance, and the dependant needs support to do so safely, or are;
- a household member or secondary contact (as described in public health guidance) of someone who is a close contact of a person with COVID-19, and the worker has been advised to stay at home while waiting for the close contact’s test results.
Businesses can apply for STAP once per eligible worker in any 30-day period (unless the employee is instructed to get another test by their doctor). STAP is also available for self-employed but, again, all businesses must provide a statutory declaration.
Leave Support Scheme
The second support payment is available to those who have COVID-19 or have been told to self-isolate.
Because some people may feel under pressure to return to work, whether that be financial pressure, cultural or direct pressure from their employer. The Leave Support Scheme is designed to make it easier for employers and employees to do the right thing.
More specifically, the Leave Support Scheme is available for businesses, including self-employed people, to help pay their workers who can’t work from home if they meet certain health criteria, e.g. they have COVID-19 or are a defined by Ministry of Health as a “close contact” who has been told to self-isolate for a period determined by a health official. It is paid as a 2-week lump sum per eligible employee at a flat rate of:
- $585.80 a week for full-time workers who were working 20 hours or more a week;
- $350 a week for part-time workers who were working less than 20 hours a week.
If you have any questions, please contact us.