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Article:

Resurgence Wage Subsidy FAQs

20 August 2020

On 17 August 2020, Finance Minister Grant Robertson announced the COVID-19 Resurgence Wage Subsidy, a targeted extension to the original COVID-19 Wage Subsidy Scheme. This will see a further $1.6 billion of funding provided to help employers through these difficult times.

The extension provides an additional 14 days of payments to employers and self-employed persons who meet the eligibility criteria.

The employer must demonstrate a revenue loss of at least 40% for a continuous 14 day period between 12 August and 10 September 2020, when compared to a similar period last year, and that decline must be related to COVID-19.

New and high growth businesses will also be eligible for the scheme and can compare their revenue against any 14 day period that would give the best estimation of the revenue decline suffered in relation to COVID-19.

Applications open at 1pm 21 August 2020 and will remain open until 3 September 2020.

 

When are applications open for the resurgence wage subsidy?

 

Applications for the resurgence wage subsidy will be open at 1pm 21 August 2020 and will remain open until 3 September 2020.

You cannot apply for the resurgence wage subsidy if you are currently receiving payments from the Wage Subsidy, Leave Support Scheme, or Wage Subsidy Extension. You must wait until these have finished before you can apply for the Resurgence Wage Subsidy.

 

How much can I receive through the resurgence wage subsidy?

 

The resurgence wage subsidy will be paid at a rate of:

  • $585.80 per week for people working 20 hours or more (full-time rate)
  • $350.00 per week for people working less than 20 hours (part-time rate)

The resurgence wage subsidy will be paid as a lump sum for 14 days per employee from the date you submit your application. That is $1,171.60 per full time employee, and $750 per part time employee.

During this time, you will not be able to receive any other COVID related payments for those employees (i.e. Leave Support Scheme, Wage Subsidy, or Wage Subsidy Extension Payments).

 

What is the revenue loss criteria to qualify for the resurgence wage subsidy?

 

The employer must demonstrate a revenue loss of at least 40% for a continuous 14-day period. This period needs to occur between 12 August and 10 September 2020, when compared to the closest comparable period last year.

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

For pre-revenue research and development start-up businesses, revenue also includes a drop in projected capital income when determining if you meet a 40% decrease in revenue.

Practically, we envisage that income will be calculated on the same basis as it was in the period against which the comparison is being made.
 

Can new and high growth businesses still apply for the resurgence wage subsidy?

 

Yes - Employers who have been in operation for less than one year, or who have experienced high growth, will still be able to apply for the resurgence wage subsidy.

These employers can demonstrate their revenue loss against a comparable 14-day period (i.e. one that demonstrates the best estimation of the loss suffered as a result of COVID-19) as opposed to a year on year comparison.

 

I am receiving the Leave Support Scheme payment for one of my employees. Can I apply for the resurgence wage subsidy for them too?

 

You are not able to receive more than one COVID-19 payment from Work and Income for the same employee at the same time.

COVID-19 Payments include:

  • Wage Subsidy
  • Leave Support Scheme
  • Wage Subsidy Extension

Resurgence Wage Subsidy
 

What obligations will I have to meet to receive the resurgence wage subsidy payment?

 

When you apply for the wage subsidy extension, you will be required to declare that you agree to meet certain obligations in respect of the payment.

Similar to the first wage subsidy, these obligations will include:

  • That you pass the subsidy on to your employees
  • That you retain your employees for the duration you are receiving the subsidy for them
  • That you make best endeavours to pay your employees at least 80% of their normal pay
  • That you take active steps to mitigate the financial impact of COVID-19 on your business

 

What does it mean to take active steps to mitigate the impact of COVID-19?

 

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

This includes:

  • activating your business continuity plan
  • drawing from cash reserves (when appropriate)
  • making an insurance claim
  • proactively engaging with your bank or lender

In addition, you could also seek advice and support from:

  • BDO
  • the Chamber of Commerce
  • a relevant industry association
  • the Regional Business Partner programme

 

I have received the wage subsidy for my employee, and this is more than they would ordinarily be paid, what do I need to pay them? 

 

Where the ordinary wages of an employee are below the amount of the subsidy, then the employee should be paid 100% of their normal wage. 

The balance of the subsidy can be used to pay the wages of other affected employees.
 

How long will it take MSD to process by application?

 

MSD have indicated that they are aiming to pay the Resurgence Wage Subsidy within 5 working days of receiving an application. They will need to check the information provided in the application agrees to what is held by Inland Revenue. If the information does not match, there could be a delay in processing the application.

 

Will there be a declaration to sign when applying for the resurgence wage subsidy?

 

Yes – the declaration is yet to be released by MSD, but we envisage it will be similar to the declarations for the Wage Subsidy and Wage Subsidy Extension schemes.
 

Should previous Wage Subsidy payments be included in calculating the 40% revenue decline?

 

No – Government COVID-19 Wage Subsidy payments are specifically excluded from calculating revenue for the purposes of applying for the Resurgence Wage Subsidy.

 

 

 

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