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New Zealand Plumbers, Drainlayers & Gasfitters Association Inc

New Zealand Plumbers, Drainlayers & Gasfitters
Association Inc

Latest News / COVID-19 - Wage Subsidy Scheme

 

Wage Subsidy Scheme 

All New Zealand employers who have been adversely affected by COVID-19 are eligible to apply for the Government’s Wage Subsidy Scheme. This includes essential businesses.

The Government’s Wage Subsidy Scheme supports employers and their staff to maintain an employment connection and ensure an income for affected employees, even if the employee is unable to actually work any hours. 

The Wage Subsidy Scheme:

  • supports employers adversely affected by COVID-19, so that they can continue to pay their employees, and
  • supports workers to ensure they continue to receive an income, and stay connected to their employer, even if they are unable to work.

The Wage Subsidy Scheme is available to all businesses (including the self-employed, contractors and sole traders), registered charities, incorporated societies and post settlement governance entities, that are adversely affected by COVID-19. It is also available to employers who recently let employees go because of COVID-19, provided they re-hire those employees.

The scheme excludes state sector organisations.

Eligibility

To be eligible for the wage subsidy businesses must declare that they:

  • have had a 30% revenue drop attributable to COVID-19
  • will retain named employees for at least the duration of the grant (12 weeks)
  • will pay named employees, at a minimum:
    • for any work they do at their normal rates
    • at least 80% of income where reasonably possible (for employees working reduced hours while self-isolating)
    • the full subsidy received for each named employee, except where a person’s income is normally less than the subsidy amount, in which case they can be paid their normal salary.

Subsidy rates

Payment rates under the modified Wage Subsidy Scheme are unchanged from the original COVID-19 leave and wage subsidy schemes. They are:

  • $585.80 (gross) per week for full-time employees, where full-time is 20 hours or more per week
  • $350.00 (gross) per week for part-time employees, where part-time is less than 20 hours per week.

Employers must pass the full amount received onto the employee, except where a person’s income is normally less than the subsidy amount (i.e. $250 a week), in which case they can be paid their normal salary. Any difference should be used for the wages of other affected staff - the wage subsidy is designed to keep your employees connected to their employers.

If your employer has received the subsidy, but you haven’t received a payment, you don’t think you’ve received the right amount, or you have questions about how the subsidy is being applied to you, it is important that you talk to your employer in the first instance.

If you have talked to your employer and cannot resolve your problem, or think your employer has behaved fraudulently in relation to the subsidy, you can make a complaint with us.

Payment frequency

The subsidy will be paid as a lump sum and covers 12 weeks per employee. This is consistent with applications paid to date.

Employers can pass on the subsidy and additional wages through their usual pay cycles, or at other intervals.

Tax treatment 

The modified Wage Subsidy Scheme, and the previous COVID-19 leave and wage subsidy schemes, are considered excluded income to businesses and are also GST exempt. When passed on as wages, businesses don’t get a deduction for income tax purposes.

Payments to employees under the modified Wage Subsidy Scheme, and the previous COVID-19 wage subsidy and leave schemes, are wages. Therefore, they are subject to standard deductions like PAYE, ACC levies, KiwiSaver contributions and student loan repayments.

COVID-19 Wage Subsidy – Work and Income
Information Source: Employment NZ

 





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