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The Government has released an Economic Response Package

Published 18 Mar 2020

The Government has made available $12.1billion COVID-19 economic support package which includes sick leave support and more than $5billion in immediate wage subsidies and tax relief for businesses affected by the pandemic.

Immediately relevant to us as Employers the 2 major important points follow.

Wage Subsidies

To qualify you must be a business which can demonstrate at least a 30% decline in revenue for any month between January and June 2020 compared to the year before (including projected revenue). If your business has been running less than 1 year if you can demonstrate a decline from a previous month you may still be eligible. You may be an employer, contractor, sole trader or self-employed. This is designed to cover a 12 week subsidy period.

You need to be able to demonstrate steps you have taken to minimise the impact of covid-19

The COVID-19 Wage Subsidy will be paid at a flat rate of:

  • $585.80 for people working 20 hours or more per week (full time staff)
  • $350.00 for people working less than 20 hours per week (part time staff).

The subsidy is paid as a lump sum and covers 12 weeks per employee.

This subsidy is for wages only. It is designed to help you keep your staff employed while you consider changes that may be needed while the disruption continues, and to ensure the future viability of your business ongoing.

The Employer must make up staff wages to 80% of their normal pay (including the subsidy) in cases where the alternative would otherwise be redundancy, and the employer must be able to demonstrate steps taken to minimise and avoid a redundancy scenario.

The maximum subsidy that can be paid to a business is $150,000. This is the equivalent of 21 full time staff. Businesses can only get this subsidy once.

Leave payment scheme

The scheme is open to all workers in all firms, sectors, and regions, sole-traders and the self-employed where the need to self-isolate or recover from COVID-19 which prevents a person from working. This scheme is intended for people who must self-isolate.

Payments will be up to $585.50 per worker per week for full-time workers and $350 per worker per week for part-time worker.

Employers should apply to the Ministry of Social Development for the subsidy on behalf of workers (see link below), and are required to pass on the full weekly amount. Employers should pay normal wages for this period.

Anyone who leaves NZ to travel overseas after 16 March, 2020 will not be eligible for this payment for self-isolation on their return.

Workers do not have to have used any of their own leave entitlements to claim this.

You can apply multiple times per staff member if they have to self-isolate multiple times.

This whole package is based on a 'high trust' basis with business. Any over-payments or false claims will have to be repaid and chased by the authorities in the future, we strongly recommend to be as accurate as possible in an claims you make.

For more information and making claims please see the Government factsheet released yesterday here:

Company Policy

We also recommend business to have their CONVID-19 policy in place in outline the rules to staff and make their position clear. This document is available to members in the Library/Policy section of the Employers Toolbox

Non-members can purchase the COVID-19 Management Policy if they wish here: