Finance Minister Grant Robertson today outlined a $12.1 billion package to support New Zealanders and their jobs from the global impact of COVID-19. The $12.1 billion package includes:
•Initial $500 million boost for health
•$5.1 billion in wage subsidies for affected businesses in all sectors and regions, available from today •$126 million in COVID-19 leave and self-isolation support
•$2.8 billion income support package for our most vulnerable, including a permanent $25 per week benefit increase and a doubling of the Winter Energy Payment for 2020
•$100 million redeployment package
•$2.8 billion in business tax changes to free up cashflow, including a provisional tax threshold lift, the reinstatement of building depreciation and writing off interest on the late payment of tax
•$600 million initial aviation support package
What it means for migrant businesses?
COVID-19 leave and self-isolation support factsheet
Overview: Workers and businesses have responsibilities to prevent the spread of COVID19. The purpose of the COVID-19 leave and self-isolation scheme is to support workers financially to self-isolate, or while ill with COVID-19, where this is required so that all businesses and workers can do the right thing.
The COVID-19 leave payment scheme will provide support (through employers/to sole traders and the self-employed) for those people unable to work who are in self-isolation, are sick with COVID-19, or caring for others with COVID-19.
The payments will be $585.80 per week for full time and $350 per week for part time workers. The payment does not affect any paid leave entitlements that are owed and is available even if an employee is on paid leave for part of the period. It is not available to those who can work from home during the period of self-isolation, and who can be paid normally by their employer.
Further details: Affected full time workers (those who work more than 20 hours per week) will receive $585.80 per week, and part time workers (20 hours or less) $350 per week – the same amount as under the wage subsidy scheme.
The payment is made by MSD to employers, who will then be required to pass it on to the affected employee. MSD will pay on a fortnightly basis once it receives an application.
Other key parameters of the scheme are:
• Eligibility is open to all employees legally working in New Zealand (through their employers), the self-employed, and contractors.
• Eligibility will only be for workers who are not able to work from home.
• The entitlement is for:
o Those who self-isolate in accordance with public health guidance and who register with Healthline;
o Those who are ill with COVID-19;
o Those who cannot work because they are caring for a dependent in either of these circumstances.
• Those who leave New Zealand to travel overseas from 16 March, 2020 will not be eligible for this payment for self-isolation on their return. Workers taking sick leave before 17 March, 2020 can only access the scheme for time spent on sick leave from 17 March, 2020. It will not be accessible for those who have travelled overseas since 16 March, 2020.
More information on the sick leave scheme, including how to apply, and other support for businesses can be found at www.govt.nz/coronavirus, and www.business.govt.nz.
Income support factsheet
Overview: There are three main changes to welfare settings.
• Firstly, main benefits will rise by $25 per week. These changes will come into effect on 1 April 2020 and are permanent.
• Secondly, to support beneficiaries and superannuitants, the rate of Winter Energy Payment will double in 2020. This change is temporary.
• Thirdly, from 1 July 2020, working families with children who are not receiving a main benefit and have some level of employment income each week will no longer have to satisfy the hours test to receive the In Work Tax Credit.
Timing for additional entitlements: Recipients will not have to do anything to receive these additional entitlements. The additional support will be calculated automatically.
• Main benefits will increase on 1 April 2020 in line with wage growth (indexation) AND then by an additional $25 per week.
• Winter Energy Payment will start on 1 May 2020 and be paid at double the current rate for 2020 only. The rates for 2020 will be $40.91 per week (single people) and $63.64 per week (couples or people with dependents).
• From 1 July 2020, working families will no longer need to be “normally” working at least 20 hours a week (sole parents) or 30 hours a week (couples with children) to be eligible for the IWTC.
Wage subsidy scheme factsheet
Overview: Wage subsidies will be available for all employers that are significantly impacted by COVID-19 and are struggling to retain employees as a result. The scheme will be open to sole traders and the self-employed as well as firms.
Amount of support: $585.80 per week for a full time employee (20 hrs or more) or $350.00 per week for a part time employee (less than 20 hrs). The payment will be made as a lump sum for a period covering 12 weeks. This means employers will receive a payment of $7,029.60 for a full time employee and $4,200 for a part time employee. The maximum amount any one employer can receive is $150,000.
Scale of disruption: Employers must have suffered, or are projected to suffer at least a 30% decline in revenue compared to last year for any month between January 2020 and the end of the scheme in June 2020. Applications can also be made on the basis of forecast revenue loss within the period of the scheme.
Undertakings from the Employer: Some of the key undertakings are:
• Employers will need to declare that, on their best endeavours, they will continue to employ the affected employees at a minimum of 80% of their income for the duration of the subsidy period. This is the equivalent of keeping people working 4 out of 5 days of the week.
• Employers must also have taken active steps to mitigate the impact of COVID-19 (eg. engaged with their bank/financial advisor) and sign a declaration form to that effect.
Employers can apply to MSD for the subsidy: Employers can apply from today. 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.
Duration of the scheme: Applications can be made from today (17 March) for the next 12 weeks
More information on the wage subsidy scheme, including how to apply, and other support for businesses can be found at www.govt.nz/coronavirus, and www.business.govt.nz.
Working together to protect businesses and workers
As New Zealand unites to lock-down in the fight against COVID-19, the Finance Minister is urging all businesses and workers to stay connected over the next four weeks.
“We understand the extreme pressure many businesses are under right now. I know most business owners think of their workers as family and want to do the right thing during this unprecedented time,” Grant Robertson says.
“That’s why we’re saying ‘we have your backs’ through the measures we have in place, including the wage subsidy and working capital support alongside the banks.”
The measures include:
Facilitating a 6-month deferred mortgage payment scheme to support mortgage holders whose incomes are affected by COVID-19, so that Kiwis don’t lose their homes during this period
An estimated $9.3 billion in wage subsidies for affected businesses in all sectors and regions,
Support for renters through a freeze on rent increases and end to no-cause evictions on top of existing support like the Accommodation Supplement and MSD grants to help with rent and hardship payments
Protecting the ability of our public health services to respond to this global pandemic and access the resources they need through an initial $500 million investment.
Doubling the 2020 Winter Energy Payment for Superannuitants and main-benefit recipients from 1 May to 1 October to make sure our most vulnerable are able to heat their homes particularly during a time when over-70s are to remain at home.
A $25 per week increase to main benefits to protect our most vulnerable and those who lose their jobs, on top of the $10 a week wage indexation increase from 1 April.
The $6.25 billion Business Finance Guarantee Scheme to provide loans of up to $500,000 for businesses with annual revenues between $250,000 and $80 million, for up to three years – 80% guaranteed by the Government.
Business tax changes to free up cashflow, including a provisional tax threshold lift, the reinstatement of building depreciation and writing off interest on the late payment of tax
“Our immediate priority is making sure New Zealand is prepared for the four week lock-down period from midnight tonight, so that we can get through it and out the other side with Kiwis staying safe and well,” Grant Robertson said.
“As the country enters Alert Level 4, all workers who don’t work for essential services will have to stay home for four weeks. Maintaining contact with workers will put businesses in a better position to recover once we are through this period. We will continue to monitor the support programmes and act as is necessary to support the incomes and livelihoods of New Zealanders.
“This will make the recovery faster because businesses won’t have to start again from scratch, which would be the case if they sever their work force,” Grant Robertson said.
To apply for COVID-19 assistance: https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html#null
(from the office of Grant Roberton, Finance Minister of New Zealand.)
Wage Subsidy
The Government has put together a COVID-19 Wage Subsidy for employers in all regions. Who can get it If you’re an employer, contractor, sole trader or self-employed, you may qualify to get the COVID-19 wage subsidy.
To qualify:
your business must be registered and operating in New Zealand
your employees must be legally working in New Zealand
the business must have experienced a minimum 30% decline in actual or predicted revenue over the period of a month when compared with the same month last year, and that decline is related to COVID-19
your business must have taken active steps to mitigate the impact of COVID-19
you must make best efforts to retain employees and pay them a minimum of 80% of their normal income for the subsidised period.
For definitions of these qualifications, see the information under the ‘Definitions for Wage Subsidy qualifications’ heading on the page below.
How much you can get
The COVID-19 Wage Subsidy will be paid at a flat rate of:
$585.80 for people working 20 hours or more per week
$350.00 for people working less than 20 hours per week. The subsidy is paid as a lump sum and covers 12 weeks per employee.
This subsidy is for wages only. It is to help you keep your staff employed while you consider changes that may be needed while the disruption continues, and to ensure the future viability of your business.
Businesses can only get this subsidy once.
Leave Payment
Self-isolation is an important way to slow the spread of COVID-19. From 17 March 2020 the COVID-19 Leave Payment will be available to support people financially if they:
need to self-isolate (as determined by the Ministry of Health guidelines),
cannot work because they are sick with COVID-19, or
cannot work because they are caring for dependents who are required to self-isolate or are sick with COVID-19.
The COVID-19 Leave Payment will be available for 8 weeks from 17 March 2020. Employers will be able to apply for this more than once. It will be paid to employers who have eligible employees and they must pass the payment onto their employees in full.
Who can get it
If you’re an employer, contractor, sole trader or self-employed, you may qualify to get the COVID-19 Leave Payment. COVID-19 Leave Payment covers full-time, part-time and casual employees, and contractors who are legally working in New Zealand and who:
need to self isolate in line with Ministry of Health Guidelines and have registered as needing to self-isolate with Healthline,
cannot work from home and their self-isolation is not because they left NZ since the travel restrictions on 16 March 2020 and have since returned or cannot work because the person has been diagnosed with COVID-19 or
cannot work because they are caring for dependents who are required to self-isolate or who are sick with COVID-19
How much you can get
The COVID-19 leave payment will be paid at a flat rate of:
$585.80 to a person working 20 hours or more per week
$350.00 to a person working less than 20 hours per week.
Inland Revenue advice to businesses
If your business is unable to pay its taxes on time due to the impact of COVID-19, we understand, you don’t need to contact us right now.
Get in touch with us when you can, and we’ll write-off any penalties and interest. It would help if you continue to file however, as the information isused to make correct payments to people, and to help the Government continue respond to what is happening in the economy.