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Covid-19

Description and volume of the aid packages made available to employees, small businesses, large corporations

The Government has announced a $12.1b dollar relief package to support New Zealanders, businesses and employers from the impact of Covid-19. They are outlined below:

Covid-19 wage subsidy: the purpose of this is to mitigate the impact of a four-week shutdown of non-essential services. The wage subsidy is $585.80 a week for full time workers (those who worked 20 or more hours a week before Covid-19), and $350 per week for part-time workers (fewer than 20 hours). It is paid out in a lump sum covering the 12 weeks, meaning a $7,029.60 payment per full time worker.

Any New Zealand registered employer who has experienced a minimum 30% loss in revenue because of Covid-19 over any month from January compared to the same month last year can apply. New businesses that are less than a year old and high growth firms need to show revenue loss against a similar time period such as a 30% drop in March compared to January of this year. Self-employed people can also apply if they can show a 30% loss of income in March 2020 compared to the average monthly income they would have received in the last year. Registered charities, non-governmental organisations, incorporated societies and post-settlement governance entities are also included and can apply for wage subsidy.

To be eligible for the wage subsidy, the employer must make the best endeavour to pay staff a minimum of 80% of their previous wage. If this is not possible then they must pass through the entire government subsidy. Employers must also keep the worker employed for the full 12 weeks of the subsidy. State sector employers including government departments and agencies, and crown entities are not eligible to apply.

Covid-19 leave payment: this was available to employees (whether they work full time, part time or casual) and contractors who needed to self-isolate or could not work because they were sick with Covid-19 or could not work because they were caring for dependents who are required to self-isolate or are sick with Covid-19. The Government announced that the Covid-19 leave payment would be available for 8 weeks from 17 March 2020, and would be paid to employers who had eligible employees and they must pass the payment onto their employees in full. From 27 March 2020 however, this leave payment scheme is no longer available as the Government announced that it is no longer fit for purpose (which was to financially support few people who were in self-isolation), and to prevent double dipping with the wage subsidy scheme.

The $12.1b economic package also includes: 

a)     Initial $500m boost for health sector;

b)    $2.8b income support package for our most vulnerable including a permanent $25 per week benefit increase;

c)     $100m redeployment package;

d)    $2.8b in business tax changes to free up cash flow, including a provisional tax threshold lift, the reinstatement of building depreciation and writing off interest on the late payment of tax

e)    $600m initial aviation support package.