COVID-19: August 2021 Lockdown – Financial Support Available for Businesses
There are several forms of financial support available for businesses during the 2021 Covid-19 lockdown, below is a summary outlining the eligibility requirements and obligations of each.
Wage Subsidy August 2021 #1 and #2
The August 2021 wage subsidy will help businesses affected by Alert Levels 3 and 4 changes continue to pay employees. As of 3 September, a second round of the August 2021 Wage Subsidy has started and will end on 16 September at 11:59pm. The first August 2021 Wage Subsidy opened on 20 August 2021, and has since closed. You can not apply for second August 2021 wage subsidy (or #2) until two weeks after you applied for August #1 Wage Subsidy.
Eligible employers can receive:
• $600 per week per full-time employee (more than 20 hours per week), and
• $359 per week per part-time employee (fewer than 20 hours per week).
Employers will be eligible for this scheme if they experience (or expect to experience) a decline of 40% in revenue compared to a typical 14-day period of revenue in the six weeks prior to 17 August 2021. The subsidy is available to all eligible businesses in New Zealand affected by the move to Alert Level 4 and continuation of Alert Levels 3 and 4, this includes businesses who may now be at Level 2. If you are self employed you can also apply.
The wage subsidy is paid direct to an employer as a lump sum, as part of the application process a business must commit to retain and pass on the subsidy to their employees. The application process requires employers to make a declaration which includes declaring that the business will meet the revenue decline eligibility criteria and that it has taken active steps to mitigate the impact of the Alert Level changes, for example by engaging with its banks and drawing on cash reserves. The August 2021 Wage Subsidy declaration requires a business to agree that:
• Existing obligations under employment law including the Employment Relations Act 2000, the Minimum Wage Act 1983, the Holidays Act 2003, or the Health and Safety at Work Act 2015 are not overridden when receiving the subsidy;
• It will not make any changes to its obligations under employment agreements including to pay and hours of work without the agreement of employees;
• It will not unlawfully compel employees to take leave;
• It will retain the named employees for the period of the subside;
• It will use the subsidy to support paying wages and salary to named employees, this means paying at least the full amount of the subsidy (unless their wages are less than the subsidy amount in which case you should pay the employee their full wages) and use best endeavours to pay 80% of ordinary wages or salary.
Applications opened online for the August #2 Wage Subsidy at 9am on Friday 3 September 2021 closing on 16 September, with the first payment likely to be available after 3 days.
If an employer is already receiving the Leave Support Scheme or Short Term Absence Payment for an employee then they will not be able to claim the wage subsidy for the employee as well.
An employer needs to speak to their employees about the application and get their consent before sharing information with MSD in the application for the Wage Subsidy. Information that will be needed includes an employees name, date of birth, IRD number and hours of work (if they are working more than 20 hours
To apply, head to COVID-19 Wage Subsidy August 2021.
Resurgence Support Payment (RSP)
Employers, self-employed persons and sole traders will be eligible for this scheme if:
• The business incurs a decline of 30% of revenue (or capital rising ability) over a 7 day period as a result of an alert level change (i.e. above Alert Level 1);
• The business has been operating for at least six month (from 9 September 2021: businesses that have been operating for at least one month prior to 17 August 2021 (the increase to Alert Level 4); and
• Can be considered viable and ongoing.
Employers will be eligible for the lesser of:
• $1,500, plus $400 per full-time equivalent employee (FTE), up to a maximum of 50 FTEs, or
• 4 times (4x) the businesses actual revenue decline.
Passive income such as interest, dividends or rent is excluded from the measure of revenue.
It is possible this scheme could be activated multiple times if there are multiple increases from Alert Level 1, and eligible employers can apply each time it is activated.
If you are receiving any other Government COVID support or subsidies does not effect your eligibility for the RSP.
Applications opened on Tuesday 24 August 2021 at 8 am. For more in depth guidance on if you are eligible, see Eligibility for the Resurgence Support Payment (RSP). To apply, head to COVID-19 Resurgence Support Payment (RSP).
Leave Support Scheme (LSS)
Employers and self-employed persons will be eligible for a lump sum payment for employees who must self-isolate and cannot work from home for a period of up to 2 weeks.
Employers will be eligible for:
• $600 per week for full-time workers (more than 20 hours per week); or
• $359 per week for part-time workers (less than 20 hours per week).
This payment only covers two weeks, and if the employee returns to work in less than two weeks, the remaining amount should be used to pay other employees or be repaid. For more information on how to apply see How to apply for COVID-19 Leave Support Scheme.
Short-term Absence Payment (STAP)
This payment is available as all alert levels. The scheme consists of a one-off payment of $350, once every 30 days, for each employee who:
• Cannot attend work because they are awaiting on a COVID-19 test result; and
• The employee cannot work from home.
Self-employed persons can also apply for this payment.
To apply for this scheme, head to How to apply for the COVID-19 Short-Term Absence Payment.