Wage subsidy schemes
The Wage Subsidy Scheme will be in place if there is an escalation to Alert Level 3 or 4 anywhere in New Zealand for 7 days or more. Wage subsidies support employers and self-employed people to keep paying employees and protect jobs affected by Alert Level changes.
COVID-19 Wage Subsidy March 2021
Applications for the Wage Subsidy March 2021 closed on 21 March 2021. It helped employers to continue to pay employees and protect jobs for businesses affected by the rise in Alert Levels on 28 February 2021.
Closed wage subsidy schemes
COVID-19 Resurgence Support Payment
The COVID-19 Resurgence Support Payment helps businesses directly affected when there’s an increase to Alert Level 2 or higher for a week or more. It helps to cover wages and fixed costs.
28 February Alert Level increase
Businesses can apply through myIR for support due to the 28 February Alert Level increase. It is available to all eligible businesses and organisations in New Zealand. The final day for applications is 12 April 2021.
14 February Alert Level increase
Businesses can no longer apply for support due to the 14 February Alert Level increase.
Who is eligible
To be eligible for the payment, your business must have experienced at least a 30% drop in revenue or capital-raising ability over a 7 day period after the increased Alert Level, and meet other criteria.
Eligible businesses can apply to receive the lesser of:
- $1,500 plus $400 per full-time equivalent (FTE) employee, up to a maximum of 50 FTEs, or
- 4 times (4x) the actual revenue drop experienced by the business.
Businesses and organisations can apply for the payment each time it is activated, as long as they meet the eligibility criteria.
Applications are open for 1 month after the return to Alert Level 1.
COVID-19 Short-term Absence Payment
The COVID-19 Short-term Absence Payment helps businesses and self-employed people to pay their employees who cannot work from home while they wait for a COVID-19 test result. This includes employees on casual contracts.
The payment helps businesses keep paying employees who:
- cannot work from home, and
- need to stay at home while waiting on a COVID-19 test result.
This must be in line with public health guidance (external link)
A one-off payment of $350 is available for each employee. You can apply for it once for each eligible employee in any 30-day period. However, you can apply for it again if a health official or doctor tells them to get another test.
Your business should encourage employees to call Healthline or talk to their doctor if they are unwell.
The COVID-19 Leave Support Scheme is still available for businesses to help pay employees who need to self-isolate for other reasons and cannot work from home.
COVID-19 Leave Support Scheme
If your employees have been advised to self-isolate and they cannot work from home, you can apply for the COVID-19 Leave Support Scheme for them. You can also apply if you are self-employed.
The scheme means employees and self-employed people receive an income if they cannot work from home while they’re self-isolating. This includes employees on casual contracts.
The Leave Support Scheme is paid at a flat rate of:
- $585.80 a week for full-time workers who were working 20 hours or more a week
- $350 a week for part-time workers who were working less than 20 hours a week.
Employers, including self-employed people, and employees need to meet certain criteria to apply for the Leave Support Scheme.
If your employees need to stay home while waiting on a COVID-19 test result and cannot work from home, the COVID-19 Short-term Absence Payment is available.
Business Finance Guarantee scheme
Your small or medium-sized business may be eligible for a Business Finance Guarantee Scheme loan.
These loans can support operating cashflow and capital assets and projects related to, responding to or for recovering from the impacts of COVID-19.
What is available in the scheme
Participating lenders can provide to eligible businesses:
- new loans
- increased limits to existing loans
- revolving credit facilities.
Participating banks and non-banks, for example building societies, can lend outside of their normal lending criteria.
If you borrow from a bank, you could borrow up to $5 million for a term of up to 5 years.
If you borrow from a non-bank, you could borrow up to $3 million for a term of up to 5 years.
The scheme is supported by the Government, which takes up to 80% of the scheme loan’s default risk.
No personal guarantee is required. Participating banks and non-banks make all lending decisions. You must still pay the loan back, with interest, as you would usually.
Business cash flow and tax measures
Inland Revenue has information on a range of measures to help businesses as they recover. These include:
- greater flexibility for taxpayers in respect of statutory tax deadlines
- changes to the tax loss continuity rules
- a tax loss carry-back scheme
- measures to support commercial tenants and landlords
- further business consultancy support.
Small Business Cashflow Loan Scheme
Organisations and small-to-medium businesses, including sole traders and the self-employed, may be eligible for a one-off loan with a term of 5 years if they have been adversely affected by COVID-19.
The Small Business Cashflow Loan Scheme provides assistance to firms employing 50 or fewer full-time equivalent employees. The maximum amount that can be borrowed is $10,000 plus $1,800 per full-time-equivalent employee and only one amount can be drawn down.
Loans will be interest-free if they’re paid back within 2 years. The interest rate will be 3% for a maximum term of 5 years. Repayments are not required for the first 2 years.
Applications are open until 31 December 2023.
Insolvency relief for businesses
The Companies Office offers relief for companies and other entities facing difficulties in complying with their statutory obligations, or obligations under their constitutions or rules, as they recover from the impacts of COVID-19.
The COVID-19 Business Debt Hibernation scheme allows businesses to place their existing debts on hold for up to 7 months to help them start trading normally again.
Information on how you can access the insolvency relief and the requirements that you’ll need to meet is available on the Companies Office website.
COVID-19 commercial lease dispute services
If commercial tenants and landlords of small-to-medium businesses have not been able to agree about rent arrangements during a lockdown period (Alert Levels 3 and 4), they can use the COVID-19 commercial lease dispute services to try to reach an agreement acceptable to both parties.
The services are arbitration and mediation services to resolve commercial lease disputes due to COVID-19.
Arbitration services will be subsidised up to $6,000 for each dispute. Mediation services will be fully funded, up to a value of $4,000 for each dispute.
These services are available until 31 March 2021.
Apprenticeship Boost initiative
Support will be available to employers of first-year and second-year apprentices in a Tertiary Education Commission-approved New Zealand Apprenticeship or Managed Apprenticeship programme.
The amount that can be claimed will vary depending on when an apprentice started their training programme and when they reach 24 months. Employers can claim:
- $1,000 a month for eligible apprentices in the first 12 months of their training programme
- $500 a month in the second 12 months of their training programme.
Funding will be available until April 2022.
Employers are required to top up the funding they receive to ensure their apprentices receive at least the minimum or training wage they are legally entitled to.