COVID-19 GOVERNMENT SUPPORT SCHEMES

We are back here again!  It was announced last night that New Zealand would be going into a Level 4 Lockdown at 11:59pm on 17 August 2021.

With the Level 4 Lockdown in place, we thought it would be a good opportunity to send out a reminder of some of the support schemes and payments available to businesses.  More information is expected to be released in the coming days regarding the specific requirements and eligibility for these schemes.  However, we have set out below a summary of the main support schemes in place.

1. The Wage Subsidy Scheme (“WSS”)
   • the WSS allows eligible employers to apply for the WSS if they expect a loss of 40 percent of revenue as a result of going to Alert Levels 3 or 4 for a week or more.  
   • the WSS rates will be increased to reflect the increase in wage costs since the scheme was first used in March 2020. Employers will be eligible for $600 per week per full-time equivalent employee, and $359 per week per part-time employee.  
   • applications open on Friday 20 August 2021 with the first payments expected to be available after three days.

2. The Resurgence Support Payment (“RSP”)
   • the RSP is a payment to help cover wages and fixed costs for businesses who have been directly affected when there is an increase to Alert Level 2 or higher.
   • each time the COVID-19 alert level is increased from Alert Level 1, the Government may decide to activate the RSP. It will generally be activated when the period of increased alert level is seven days or longer, but this is not guaranteed.
   • on 17 August 2021, the Minister of Finance announced that the RSP would be made available to businesses and organisations affected by the 17 August 2021 Alert Level 4 Lockdown.
   • applications for the RSP will become available at 8am on 24 August 2021.
   • the RSP is available if a business incurs a loss of 30% of revenue as a result of the Alert Level increase. When the RSP is activated, eligible businesses can apply to receive the lesser of:
     • $1,500 plus $400 per full-time equivalent (FTE) employee, up to a maximum of 50 FTEs; or
     • four times the actual revenue decline experienced by the business.
   • the payment must be used to help cover business expenses (which can include employee wages and other fixed costs).

3. The Leave Support Scheme (“LSS”)
   • the LSS provides a two-week lump sum payment for workers who must self-isolate and cannot work from home.  This rate was previously $585.80 a week for full-time workers and $350 a week for part-time workers, however it has been announced by the Minister of Finance that these rates will likely increase in line with the WSS.
   • the LSS payment must:
     • be passed on to the employee; and
     • the employee must be retained for the period that the business receives the LSS for that employee.
   • currently, businesses are no longer required to show an actual or predicted revenue drop or that their ability to support an employee was negatively impacted by COVID-19, to be eligible to access the LSS.

4. The Short-Term Absence Payment (“STAP”)
   • provides a one-off payment for eligible workers who:
     • must miss work due to a COVID-19 test and cannot work from home;
     • are the parent or caregivers of a dependent who is staying home while waiting for their COVID-19 test results, in accordance with public health guidance, and the dependent needs support to do so safely; or
     • are household members or secondary contacts (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;
   • the one-off payment was previously $350, however it has been announced that this amount will increase to accord with the rise in wage costs since STAP was created.
   • the business must apply for the payment within eight weeks of the eligible worker receiving the test; and
   • businesses can only apply for the STAP once, for each eligible worker, in any 30-day period (unless a health official or doctor tells the worker to get another test).

Other forms of support, such as loan and debt schemes available to businesses, are set out in detail on https://www.business.govt.nz/covid-19/financial-support-for-businesses/. 

If you have any questions about any of the above schemes, please feel free to contact us on 0800 339 002.