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Covid-19 Wage Subsidy #2

We are almost at the end of another week in lockdown. We hope that you are coping with these strange and challenging times. The view from our home offices certainly are a bit different to usual!

Today applications for the Wage Subsidy #2 payment opened. However, there are a few
things to know before you apply.

The first of which is that if you've already applied for the previous COVID-19 Wage Subsidy August 2021, you need to wait until two weeks after you applied before you can apply for the new WAGE Subsidy #2, even if you haven't received a payment yet.

If you apply earlier than this your application for the new subsidy will be declined.  

Main Requirements for Eligibility

You are entitled to the second subsidy arising from the alert level increase announced on 17 August 2021 if:

  • Because of the continuation of Alert Levels 3 or 4, your business has experienced a 40% decline in actual or predicted revenue between 31 August 2021 and 13 September 2021 when compared to a typical 14-day consecutive period of revenue in the six weeks immediately prior to the move to Alert Level 4 on 17 August 2021.
  • You have taken active steps to mitigate the impact. This includes talking to your bank, drawing on cash reserves, making an insurance claim. You need to be able to provide evidence of the impact on your business and the steps you have taken
  • As an employer, you:
    • Do your best to pay your employees 80% of their pre COVID-19 income for the period of the subsidy. If this is not possible then you pass the entire wage subsidy on to employees. This applies to all employees, and they all must at least receive the full value of the subsidy. Where the ordinary wages or salary of an employee was lawfully below the amount of the subsidy before the impact of COVID19, you can pay the employee that amount.
    • Must retain employees for the period of the subsidy
    • Should not compel employees to take their leave to receive the subsidy. Leave requirements for employees remain unchanged 

Your Declaration and Obligations

By now, many whose businesses have been affected by COVID-19 have applied for support through the wage subsidy. If you are one of them, keep in mind that the subsidy comes with specific conditions. 

When you apply for the subsidy you make a declaration about your business and how you will use the subsidy, including that:

  • You operate a business and any employees named in your application are legally employed (in New Zealand)
  • You discussed the wage subsidy application with employees and obtained their consent (preferably in writing):
    • to provide information to MSD
    • to information sharing between MSD and other agencies (including non-government agencies)
    • to advise MSD of any employees ending their employment during the subsidy period

You also consent to the MSD publishing information about your business and the level and duration of any subsidy provided to you on a publicly available register.

The subsidy commits you to retaining and paying your employees. You can only vary employment agreements with employees with their agreement. You agree to repay the subsidy or part of subsidy if you:

  • fail to meet any obligations
  • provided false or misleading information
  • receive insurance such as business interruption insurance for any costs covered by the subsidy

You may be subject to civil proceedings to recover any amount received that you are not entitled to and/or to prosecution for offences under the Crimes Act 1961.

How to Apply

If you are self employed, you can apply at https://services.workandincome.govt.nz/ess/trader_applications/new?subsidy_type=COVID19D 

If you are an employer, you can apply at https://services.workandincome.govt.nz/ess/employer_applications/new?subsidy_type=COVID19D

We're here to help. If you need support to apply, or would like to clarify your situation please get in touch.


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