Coronavirus – Wage Subsidy Extension

Coronavirus – Wage Subsidy Extension

Coronavirus – Wage Subsidy Extension

First things first. Applications for the original wage subsidy expire today, Tuesday 9 June. If you haven’t already applied and qualify, do so now. If you want more information on the existing scheme, please click on the link here.

Details of the Extension

Applications open for the wage subsidy extension on June 10, 2020 at 9am. As with the original scheme, it is being administered by Work and Income New Zealand.

Please bear in mind that qualification for the wage subsidy extension has changed.

In order to qualify, you’ll need to prove that you have had a 40% decrease in revenue over a 30 day period compared to a comparable period last year. When it was originally announced, the extended scheme was going to require a 50% drop in revenue but the government reduced this amount last week.

This revenue drop also has to be within a 40 day period of the time you apply, but cannot be earlier than 10 May, 2020.

If you are uncertain, we suggest you use the Profit and Loss report in Xero. Check with us if you are uncertain as you’ll also need to include revenue that you have earned but may not have billed yet.

There are some other key points to remember with the scheme:

  • If you’re applying for an employee you’ve already applied for the Wage Subsidy for, you can’t apply for them until their 12 week Wage Subsidy has finished.
  • It will cover 8 weeks per employee from the date you submit your application.
  • It will be paid to you as a lump sum at the same weekly rate as the Wage Subsidy.
  • If you’ve given an employee notice of redundancy before you apply, you can’t apply for those employees unless the redundancy notice is withdrawn.
  • You’ll need to agree to certain obligations, such as to:
    • pass the subsidy on to your employees
    • retain your employees for the duration of the subsidy
    • do your best to pay your employees at least 80% of their normal pay
    • take active steps to mitigate the impact of COVID-19 on your business.

Note that you cannot receive more than one subsidy for the same employee at the same time. What this means is that you’ll need to apply for the extension only 12 weeks have elapsed from your last application.

Repayments

If your employee’s usual wages or salary are less than the subsidy, you must pay them their usual wages. You can apply any difference to other affected staff, but if there are no other affected employees, you must pay the remaining amount back.

If you are self employed and you draw less than the subsidy amount on a regular basis, you’ll need to pay any remaining amount back.

How do I apply?

The application is online, just like the previous subsidy. It will show up on this page once applications are open.

Make sure to read through the terms and conditions to ensure that your business qualifies.

 

 

Angus is the CEO and founder of Generate Accounting.