Pandemic 2020 Employment Support Packages
Business Continuity Package Announced- 17 March 2020
In response to the economic impact of COVID-19, the Government released its $12.1b Business Continuity Package today. The Package is significant representing 4% of New Zealand’s GDP, and is and is one of the largest packages in the world on a per capita basis, described by the Minister of Finance as “the largest investment in our lifetimes”.
The measures announced will provide financial relief to businesses in the most affected industries, and at-risk employees with a financial safety net through targeted wage subsidies. The Government hopes to support employers to retain staff and workers to self-isolate as required. There are also several key tax measures which should support businesses by relieving taxes payable, allowing additional or earlier deductions, as well as Use of Money Interest (UOMI) and provisional tax relief.
Wage Subsidies
To qualify businesses must be able to show a 30% decline in revenue due to COVID-19, month-on-month for any month between January and June 2020 (compared to last year).
Employers eligible to receive the subsidy will receive a lump sum payment of the equivalent of $585/week for each eligible full-time employee, and $350/week for part-time employees. The subsidy will be capped at 12 weeks and $150,000 per businesses. Over a 12-week period the full subsidy equates to roughly 21 full-time employees per week, which in effect limits the application of the measures for larger employers.
The same measures will be available for those who are self-employed and working as contractors.
Supporting self-isolation (Leave Payment)
Please note information is still coming out surrounding this and we are awaiting details from the Ministry of Social Development's National Office
Leave payments will be available for employees required to self-isolate, or care for dependents in self-isolation or those sick with COVID-19. Eligibility for leave payments is open to all employees that are required to self-isolate and are not able to work remotely. These payments will not be available for persons required to self-isolate due to travel, after 16 March.
Employers will need to register with MSD on the employee's behalf.
Applications can be made through an online portal on the Work and Income website www.workandincome.govt.nz. MSD will aim to make first payments no later than five working days from when applications are received. Information on this can be found here.
The team at People Passion encourage you to keep communicating with your Team and ask questions if you are unsure. People Passion are available to help, we have our experienced Legal Partner, Shelley Kopu from EY Law guiding us through this time of uncertainty.
We will be continuously reviewing this situation and will inform you if any changes to the process we have suggested need to occur. Please note that the above approach may be amended subject to any further direction or guidance from the Government.