COVID-19 Wage Subsidy August 2021: The Complete Application Guide

Amidst the Alert Level 4 lockdown extension in the country, Work and Income is offering wage subsidies for businesses affected by COVID-19. This is to help them pay their employees who may be unable to work because they’re stuck at home, in self-isolation, or are affected by the virus.

Before filing for wage subsidies from Work and Income, here are some important things you need to consider.

What is COVID-19 Wage Subsidy August 2021?

The COVID-19 Wage Subsidy August 2021 is a payment support system for employers struggling to make ends meet due to the lockdown. This helps them pay their employees affected by the Alert Level 4 that started on August 17, 2021. Qualified employers can apply for the wage subsidy for their employees, or for themselves if they are self-employed.

This is a two-week wage subsidy of $600 per week for full-time employees, and $359 for part-timers. Employers can only apply for each employee once. If the country still remains in Alert Level 3 or 4 beyond three weeks, employers may reapply for a two-week subsidy.

Who can qualify for the wage subsidy?

Work and Income has different qualifications to be eligible for an application. They need to ensure that you mitigate the impacts made by the lockdown restrictions from the recent outbreak. This means talking about your best options with your financial bank, filing an insurance claim, and withdrawing from your cash reserves as necessary.

On top of this, your business must experience at least a 40% revenue decline compared to your fortnightly average. For seasonal businesses, you must explain how the lockdown made it harder for your business to meet the required 40% revenue decline.

Your business

Businesses must operate within New Zealand. Upon application, you must write the names of your employees. Depending on the type of business, your revenue decline will be assessed through the revenue test period, default comparator period, and seasonal comparator period. 

Businesses can be categorised into:

• A registered business, sole trader or self-employed person
• A registered charity, incorporated under the Incorporated Societies Act 1908 and registered under the Charities Act 2005, or registered under the Charities Act 2005
• A non-government organisation, post-settlement governance entity or, under specified circumstances, a commonly-owned group

As of Friday, August 20th, 47,000 businesses and sole traders already applied for the wage subsidy. More than 28,000 had been approved.

Your employees

Each employee must be named in the application and must be legally employed in an NZ business. They must also not be given notice of redundancy at the application date. This covers both sole traders and self-employed people.

For businesses to receive COVID-19 Wage Subsidy August 2021, they must not receive payments under the Short-term Absence Payment, Leave Support Scheme, and Essential Workers Support Scheme. To the best of their abilities, employers need to pay their employees at least 80% of their usual wages.

While receiving payments, employers cannot make changes in your employment terms and agreement. This gives you the confidence that you won’t be laid off or fired unless otherwise discussed and agreed upon by you and your employer.

How can you apply for a Wage Subsidy?

Applications are open for two weeks. Depending on your employment type, you have different forms. In the form, you’ll be asked to declare the specific criteria of why you’re applying and agree to the payment obligations.

Make sure to provide the following details according to your employment type. Most of all, double-check the details that you provide whether they match those from Inland Revenue. Otherwise, your application may be rejected.

If you have employees working for you

• Business IRD number, including your partnership or company IRD number
• IR customer name linked to your business IRD number
• New Zealand Business Number (NZBN)
• Business address
• Personal details like contact name, email address, and mobile number
• Bank account number
• Employee details, both full-time and part-time employees
• Name
• Date of birth
• IRD number
• Employment type

If you’re a sole trader or self-employed

• Business IRD number (your personal IRD number)
• Employment type
• IR customer name (your name, not your trade name)
• Business address
• Personal details like contact name, email address, and mobile number
• Bank account number

If you have a large company

Large employers or companies that have more than 80 employees have a more complicated process of filing wage subsidies for their employees. They may simply follow the instructions on the page specifically for large employers.

What should you do after the application?

After the application, Work and Income will validate your business information. They need to cross-check with Inland Revenue before payment is processed. Nonetheless, they guarantee quick payment of the subsidy.

If your application is approved, you’ll receive a text message or an email indicating that payment has been made. Take note of the specific reference that the bank will use — MSD COVID19 D. If ever the payment is not successful due to incorrect details, Work and Income will call you.

For rejected applications

If your application is not approved, Work and Income will also let you know via email. The rejection may be due to one of these reasons:

• The application was completed by an employee, not the employer
• You filled out and applied using the wrong application form
• The details you indicated don’t match those held by Inland Revenue (IR)
• You are already getting a COVID-19 Wage Subsidy, COVID-19 Leave Support Scheme or the Short-Term Absence Payment

For any reasons that you don’t agree with their decision, you can contact them via email or call them on 0800 408 040 for more information.

What other subsidies can you get from the government?

Besides the COVID-19 Wage Subsidy August 2021, Work and Income also offers a wide range of schemes and payments to support businesses affected by Alert Level 4 lockdown. If you’re eligible, you can apply for the Leave Support Scheme or Short-Term Absence Payment. Do note that you can only apply for one subsidy per period.

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