New wage subsidy open to protect jobs, support businesses

5 MinutesBy NZ Trucking magazineAugust 21, 2020

Eligible businesses can apply for a two-week wage subsidy of up to $1171.60 per worker from today to help cover wages as part of the government‘s plan to protect jobs and support the economy.

Applications for the new wage subsidy will be open on the MSD website from 1pm today, Finance Minister Grant Robertson and Social Development Minister Carmel Sepuloni say. The new wage subsidy and the current Wage Subsidy Extension – which is open for new applications until 1 September – will support an estimated 930,000 jobs.

“The government has stood beside businesses and workers as we respond to the impacts of the global Covid-19 pandemic. The wage subsidy has protected more than 1.7 million jobs and we know it works. That‘s why we moved quickly to introduce the new wage subsidy to support businesses for the two weeks Auckland is at Alert Level 3,” Robertson said.

To be eligible, a business must have experienced, or is projected to experience, a 40% revenue drop across a 14-day period between 12 August and 10 September when compared to a similar period last year.

“The wage subsidy is available nationwide, given the nature of the current restrictions. This recognises the size of Auckland‘s economy and the connections between Auckland businesses and others around the country. It also recognises the impact the current restrictions are having on hospitality and tourism businesses around the country.”

Sepuloni said MSD has advised it will make payments within five days for most applications.

“Throughout our response to Covid-19, MSD has worked hard to make sure businesses and workers receive support in timely way to support confidence and cashflow. We know from a survey of businesses that received the wage subsidy that 94% said it had a positive impact on cashflow, while 62% said it helped them also manage non-wage costs like rent.”

The new wage subsidy, and the expected increase in applications for the Wage Subsidy Extension, which is open for applications until 1 September, will be funded by an underspend on the Wage Subsidy Extension. This means the government does not need to access the $14 billion remaining in the Covid Response and Recovery Fund for the payments.

Other eligibility criteria are the same as for the Wage Subsidy Extension. All existing employment law continues to apply. Further information can be found here:

The wage subsidy and Wage Subsidy Extension have so far paid $13.2 billion to businesses to protect more than 1.7 million jobs.

Sepuloni said the government‘s changes to the Covid Leave Support Scheme also come into effect from 21 August.

“We‘ve simplified the Leave Support Scheme by removing the revenue and ‘negatively impacted‘ tests as part of our work to reduce barriers to people getting tested for Covid-19, including fears that a positive result would put their employment at risk or that they wouldn‘t receive income while they couldn‘t work because they had used up their sick leave.”

To be eligible for the Leave Support Scheme the employer must meet eligibility criteria and have employees who can’t work because they have either tested positive for Covid-19, have had contact with someone who has Covid-19, or are at higher risk (or someone in their household is at higher risk) if they get Covid-19 and have been recommended to remain at home. For further details and to apply visit:

Examples of support – new wage subsidy

Under the two-week payment:

  • a business with 10 workers will receive a payment of more than $11,000

  • a business with 25 workers will receive a payment of more than $29,000

  • a business with 40 workers will receive a payment of more than $46,000.