Late last week the Government released information on updates to the COVID-19 Wage Subsidy Scheme Extension. To be eligible, your business must show a 40% decline in revenue over any 30 day period between 10th May and 1st September, when compared to the same period last year. The 30 day period you choose must be within 40 days of applying for the extension.
You don’t need to apply right away!
The wage subsidy extension will be available from 10th June 2020 until 1st September 2020 and will cover each named employee for eight weeks. The 30 day period you apply for must be within 40 days prior to your application (meaning you cannot apply on 1st September for a 30 day period in June, for example).
Proof of revenue drop
At this stage we are not sure what information Work & Income NZ will require as proof of your revenue decline. We think businesses will need to provide easily accessible information from Xero or other accounting software should they be audited. Information is light on proving your revenue drop for fast growth businesses or those operating for less than one year. We expect the rules to be similar to the existing wage subsidy and allow businesses to compare their 30 day period against a similar 30 day period, rather than last year.
How do you apply?
Applications open on 10th June, please visit the link below for more information on the Work & Income NZ website.
The amount paid to employers does not change, the subsidy is set at a flat rate and paid to employers as a lump sum to cover eight weeks per named employee:
- $585.80 for people working 20 hours or more per week
- $350.00 for people working less than 20 hours per week
Other things to note
- If you applied for the Government’s first Wage Subsidy, your business can only apply for the extension after your 12 week wage subsidy has ended. The wage subsidy extension will be paid for eight weeks from the date you submit your application.
- If you have given employees notice of redundancy, you won’t be eligible to receive the subsidy for those employees unless you withdraw the redundancy notice.
- If your business is considered new or you’ve experienced high growth against last year you can still apply for the wage subsidy extension, this includes pre-revenue R&S start up firms that are recognised by the Callaghan Innovation method. You may need to demonstrate your 40% decline against a comparable 30 day period this year instead of a year on year comparison.
- If you report revenue by calendar month you will need to also report on the 30 days immediately prior to applying for the wage subsidy extension. The wage subsidy extension is open from 10th June to 1st September so you have a large amount of time to apply, and choose your 30 day reporting period. If you make your application on 1st July you will be able to use the 30 days in the June calendar month as your 30 day period.
- There are some repayment requirements for if you or your employees are earning less than the wage subsidy (or if you are self employed and you draw less than the subsidy amount from your business each week). Please see the Work & Income website link above for more information.
Government cash flow loan extension
The Government has announced an extension to their Small Business Cash Flow Loan Scheme. Businesses now have until 24th July to apply for a loan.
Need more information?
As always, the Villa team is here to help with any questions you may have. Please give us a call on 09 4340 771, we will also be responding to emails but if your question is urgent it is best to call us! Find our contact information here.