Applications open for new two-week wage subsidy

Friday, 21 August 2020

Finance Minister Grant Robertson said the wage subsidy had proved to be effective.

Applications will open on Friday afternoon for an extension to the wage subsidy scheme for businesses struggling through the latest lockdown.

Eligible businesses can apply for a two-week wage subsidy of up to a total $1171.60 per worker.

Finance Minister Grant Robertson and Social Development Minister Carmel Sepuloni said applications would open at 1pm.

They said the new wage subsidy and the current wage subsidy extension, which is open for new applications until September 1, would support an estimated 930,000 jobs.

* Extra two weeks of wage subsidies expected to protect 470,000 jobs at cost of $510m

* Claims for second tranche of wage subsidies tailing off with only $1.6b requested

“The wage subsidy has protected more than 1.7 million jobs and we know it works. That’s why we moved quickly to introduce the new wage subsidy to support businesses for the two weeks Auckland is at alert level 3,” Robertson said.

To be eligible, a business must have experienced, or be projected to experience, a 40 per cent revenue drop across a 14-day period between August 12 and September 10, when compared to a similar period last year.

“The wage subsidy is available nationwide, given the nature of the current restrictions. This recognises the size of Auckland’s economy and the connections between Auckland businesses and others around the country. It also recognises the impact the current restrictions are having on hospitality and tourism businesses around the country.”

Sepuloni said the Ministry of Social Development had advised it would make payments within five days for most applications.

The new wage subsidy, and the expected increase in applications for the wage subsidy extension, will be funded by an underspend on the extension.

While this new subsidy offer only pays out for two weeks, the existing extension covers eight.

To qualify, a business must experience a revenue drop of 40 per cent over 30 days.

The wage subsidy and extension have so far paid $13.2 billion to businesses to protect more than 1.7 million jobs.

Changes to the Covid leave support scheme also come into effect from Friday.

“We’ve simplified the leave support scheme by removing the revenue and ‘negatively impacted’ tests as part of our work to reduce barriers to people getting tested for Covid-19, including fears that a positive result would put their employment at risk or that they wouldn’t receive income while they couldn’t work because they had used up their sick leave,” Sepuloni said.