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Current Wage Subsidy Options

Published 17 Mar 2021

It has been a year since the first wage subsidy was released. And the common theme with most things COVID-19 related, grossly underestimated. As was the financial impact on employers and employees. In March 2020 we were told to go hard and fast, we were convinced lock downs will be short term pain for long term gain and these intentions were confirmed by the temporary nature of the initial wage subsidy. But lock downs continued throughout the year and are still ongoing, continuing to place employers under immense pressures to pay now higher wages than ever before amongst other financial obligations in a vastly reduced market opportunity.

Since the original 8-week Wage Subsidy estimated at over $ 12.2 billion cost to the tax payer, we have now had 6 additional support schemes introduced,  These included the;

  • Wage Subsidy Extension  
  • Covid-19 Workplace and Workers Assistance Fund
  • Covid-19 Leave Support Scheme
  • STAP (Short term absent payment)
  • Resurgent Support Payment
  • Covid-19 Wage Subsidy March 2021

Current subsidies available are listed below;

The COVID-19 Wage Subsidy March 2021, employers affected by the current rise in Alert Levels can apply online from Thursday March 4 2021 and payments start from Monday 8 March 2021.
To qualify, a business needs 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 between 4 January and 14 February 2021 (6 weeks before the change in Alert Levels).
The subsidy payments:

  • $585.80 per week (gross, before tax) for each full-time worker (where they usually work 20 or more hours a week), or
  • $350.00 per week (gross, before tax) for each part-time worker (where they usually work fewer than 20 hours a week).

The Resurgence Support Payment is for employers with reduced revenue due to a COVID alert level increase to level 2 or higher. This payment has been introduced as part of the government’s COVID-19 support initiatives to help cover business expenses such as wages and fixed costs. Applications are currently open for this payment, each increase in alert level will have its own determinations on the application process and deadlines.
To qualify, a business must have experienced at least a 30% drop in revenue (or 30% decline in capital-raising ability) over a 7-day period at the raised alert level when compared with a typical 7-day revenue period in the 6 weeks prior. You must also meet a range of other eligibility criteria.
The support payments:

  • Will be estimated at the number of full-time equivalent (FTE) employees and your level of revenue.
  • A minimum payment of $1,500 plus $400 per FTE (up to 50 FTE).
  • A maximum payment of $21,500.
  • Or Sole traders can receive a payment of up to $1,900.
  • Businesses with low revenue will have their payment capped at four times (4x) the amount their revenue has dropped over the 7-day period.

The STAP (Short Term Absence Payment) is available for employers to pay their workers in situations where workers need to stay home and cannot work from home while they are waiting for a COVID-19 test result. Employers can apply for support to pay their employees. Parents or caregivers who need to stay away from work to support their dependents who are staying at home awaiting a test result are also eligible, as are some people who need to stay at home in accordance with public health guidance while awaiting the test result of somebody in their household.
The payment:

  • A one-off amount of $350 for each eligible worker for every instance.

The Covid-19 Leave Support Scheme is available for employers to pay their employees in situations where employees need to stay away from work due to covid-19 and cannot work from home. The COVID-19 Leave Support Scheme will cover a two-week time period, with the option for employers to re-apply for employees (including the same employees), as many times as necessary.
The subsidy payments:

  • $585.80 per week (gross, before tax) for each full-time worker (where they usually work 20 or more hours a week), or
  • $350.00 per week (gross, before tax) for each part-time worker (where they usually work fewer than 20 hours a week).

With the arrival of the vaccine, we are anxiously hoping to be nearing the end of the lock down era. However, with Labour hiking minimum wage again shortly from April 1st 2021 and most likely looking to the Employer to fund doubling sick leave entitlement for staff, the road to recovery is still unpredictable and the impacts from COVID-19 will be felt throughout the employment relationship for years to come.