Who can get the COVID-19 Wage Subsidy

Find out who can apply and what criteria you need to meet to apply for the COVID-19 Wage Subsidy.

Information

You can no longer apply for the Wage Subsidy.

You can still apply for the Leave Support Scheme if you have staff who can’t work because of COVID-19.

Who can apply

You can apply if you're:

  • an employer
    • if you have casual employees, you can apply for them if they're employed by you at the time you apply and they would have expected to work during the time you will receive the subsidy
    • if you have an employee on ACC earnings related compensation, you can't apply for them. But you can apply for them if they've returned to work and no longer get ACC.
  • a sole-trader
    • you can also apply if you're a sole trader who's also an employee and your employer has already applied for a Wage Subsidy for you
  • a contractor
  • a shareholder in a business (ie, you work for the business and are paid a wage, salary or draw an income for the work you do)
  • a partner in a business (ie, each partner is paid a wage, salary or draws an income for the work they do).

In all cases you need to meet the criteria for the Wage Subsidy.

Criteria you need to meet

  • You must be an eligible employer

    The majority of New Zealand employers who have been adversely affected by COVID-19 are eligible to apply. This includes:

    • registered charities
    • Non-government organisations (NGOs)
    • the self-employed and sole traders
    • contractors
    • incorporated societies, and
    • post-settlement governance entities
    • local government organisations
    • kindergartens and Early Childhood Centres.

    State sector organisations

    State sector organisations are generally not eligible to receive the COVID-19 wage subsidy. This includes:

    • government agencies, such as:
      • Ministry of Health
      • District Health Boards
      • Inland Revenue
      • Ministry of Social Development
    • Crown entities, such as:
      • Kāinga Ora
      • Accident Compensation Corporation (ACC)
    • schools
    • tertiary education institutions, such as:
      • universities
      • polytechnics
      • institutes of technology
      • Wananga

    State sector organisations do not include:

    • local Government, such as:
      • Regional councils
      • City councils
      • District councils
    • kindergartens
    • Early Childhood Centres
    • Non-Government Organisations (NGOs).

    A state sector organisation, with its monitoring agency, can ask for an exception to become eligible to apply for the Wage Subsidy. State sector organisations should contact their monitoring agency if they wish to discuss this.

    Businesses contracted to provide services to state sector employers

    These businesses (eg cleaning, security, etc) are not state sector employers. They can apply for the subsidy if they meet the other qualifications.

  • Your business must be in New Zealand

    Your business must be registered and operating in New Zealand.

    This means your business must be:

    • registered with the New Zealand Companies Office
    • physically located in New Zealand, and
    • your employees legally work in New Zealand.

    Sole traders

    Sole traders are not required to be registered with the New Zealand Companies Office, but must have:

    • a personal IRD number for paying income tax and GST
    • government licences and permits for their business needs, and
    • qualifications or registrations for their trade or profession.

    Sole traders must still meet the requirements to be physically located and legally working in New Zealand.

  • Your employees must be legally working in New Zealand

    Legally working in New Zealand means a person is both working in New Zealand and is legally entitled to work in New Zealand.

    A person is legally entitled to work in New Zealand if they:

    • are a New Zealand or Australian citizen (including a person born in the Cook Islands, Niue or Tokelau), or
    • have a New Zealand residence class visa (eg, permanent residence visa or returning resident visa), or
    • have a New Zealand work visa or a condition on their New Zealand temporary visa that allows them to work in New Zealand (eg, work visa or student visa that allows them to work).

    For more information, visit the Employment New Zealand website.

  • You must have a 30% decline in revenue

    Your business must have experienced a minimum 30% decline in actual or predicted revenue over the period of a month, or 30 days, when compared with the same month, or 30 days, last year, and that decline is related to COVID-19.

    This means your business has experienced a 30% decline in:

    • actual revenue, or
    • predicted revenue (e.g. for businesses who have seen a reduction in bookings such as accommodation providers), and
    • that decline is related to COVID-19.

    Your business must experience this decline between January 2020 and 9 June 2020.

    Definition of revenue

    Revenue means the total amount of money a business has earned from its normal business activities, before expenses are deducted.

    If you are a pre-revenue research and development start-up business, you can include a drop in projected capital income when determining a 30% decrease in revenue.

    Determining a decline in revenue

    To determine a decline in revenue, the business must compare one month's revenue (or 30 days) against the same month (or 30 days) the previous year (e.g. February 2020 compared with February 2019).

    The revenue in the affected period must be at least 30% less than it was in the period it was compared against.

    Businesses operating for less than a year or have high growth

    New businesses which have been operating less than a year, or high growth businesses (e.g. that have had a significant increase in revenue), can apply for the Wage Subsidy.

    To determine whether these businesses meet the 30% decline in revenue assessment, they must compare their revenue against a previous month, or 30 days, that gives the best estimation of the revenue decline related to COVID-19.

    For example, 30% loss of revenue attributable to COVID-19 comparing January 2020 to March 2020.

  • You must mitigate the financial impact

    Your business must have taken active steps to mitigate the financial impact of COVID-19.

    This could include:

    • drawing from your cash reserves (as appropriate)
    • activating your business continuity plan
    • making an insurance claim
    • proactively engaging with your bank
    • seeking advice and support from:
      • the Chamber of Commerce
      • a relevant industry association
      • the Regional Business Partner programme.
  • You must retain the employees you're applying for

    You must retain the employees named in your application for the period of the subsidy.

    Employers are required to agree that, for the duration of the subsidy, they will make best efforts to retain the employees the subsidy was paid for.

    If you are receiving the COVID-19 Wage Subsidy, you must:

    • try your hardest to pay staff at least 80% of their usual wages;
      • if that isn't possible, pay at least the rate of the subsidy that applies to that employee
    • if the employee's usual wages are lower than the rate of the subsidy, continue paying that amount for the duration of the subsidy.
  • Rehiring employees

    You can apply for the COVID-19 Wage Subsidy if you re-employ your employees before you apply and if your employees were:

    • employed by you as of 17 March 2020; and
    • you had to let them go because of COVID-19; and
    • you did not apply for the COVID-19 Wage Subsidy for the employees.

    It is expected that employers and employees would operate in 'good faith' and employers would look to re-hire on at least the same terms and conditions.