On 23 March 2020, the Government announced significant further support for the economy, businesses and self-employed, in light of New Zealand preparing for Alert level 4 at midnight 25 March 2020.
In preparation for alert level 4 the Government has injected a further $4 billion into the wage subsidy scheme, and extended the eligibility guidelines. We are urging employers to apply for the subsidy if they haven’t already, it is expected that most businesses and self-employed people will now be eligible, in light of the upcoming alert level 4.
The important changes to the wage subsidy scheme, that you should be aware of:
- The previous $150,000 cap has been lifted – all employers can now access the full payments to subsidise each of their workers’ salaries for 12 weeks.
- New businesses (that are less than a year old) and high growth firms (firms that have had significant increase in revenue) are now eligible - you need to demonstrate the revenue loss assessment against a similar time period, for example a 30% loss of income, due to COVID-19, in March 2020 compared to January 2020.
- Self-employed people with variable monthly incomes are eligible – you need to demonstrate the revenue loss assessment against the previous year’s monthly average, for example a 30% loss of income due to COVID-19, comparing March 2020 to the average monthly income in the period March 2019 to March 2020.
- The scheme now covers registered charities, non-governmental organisations, incorporated societies and post-settlement governance entities.
It is important to be aware that all other eligibility criteria still applies, including the 30% revenue reduction and for businesses, on their best endeavours, to pay their subsidised employees at 80% of their income. Please see our earlier article regarding criteria and how to apply for the wage subsidy.
Please note that we are expecting the Government to release more comprehensive information and guidance on the scheme this week. We are also hopeful that further support will be announced and available soon. We will report further once this information is to hand.