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.
We want to help you keep your business afloat and keep your team together. If anything changes that may affect your eligibility or entitlement to the subsidy, you must notify the Ministry of Social Development (MSD) within 5 working days. Let us know if we can help.
If you are entitled to the subsidy:
- your business has experienced a 30% decline in actual or predicted revenue because of COVID-19 and 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 COVID-19, 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
When you applied for the subsidy you made a declaration about your business and how you would 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 have also consented 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 the 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.
Contact us if you’d like more detail about the implications for your business.