COVID-19 - Government business support in Level 3

Small Business Cashflow Scheme

The Government has announced a Small Business Cashflow Scheme which will ensure loans of $10,000 and payments of $1,800 per full-time employee that will be interest-free if paid back within a year.

Businesses with 50 or fewer employees, that have been impacted by Covid-19, will be able to apply to the IRD for loans before the 12th May.

The loans can be used for operating costs, including rent, insurance, utilities, rates and suppliers. 

For more information - www.ird.govt.nz/covid-19/business-and-organisations/covid-19-small-business-cashflow-scheme

Wage subsidies and Leave subsidies

Since the wage and leave subsidies were introduced in March, NZ Plant Producers has received queries about employers’ and workers’ responsibilities under the scheme.

The subsidies are there to support staff, to keep staff on the books, and help businesses to pay wages. They cannot be kept by the business, or spent on other expenses.

If you are receiving the COVID-19 Wage Subsidy, you must try your hardest to pay the employee named in your application at least 80% of their usual wages. If that isn't possible, you need to pay at least the full subsidy to the employee.

If your employee's usual wages are less than the subsidy, you must pay them their usual wages. Any difference should be used for the wages of other affected staff - the wage subsidy is designed to keep your employees connected to you.

If you have applied for a wage or leave subsidy you will have provided the names and IRD numbers of the staff you are passing the subsidy on to. We are aware that MSD and IRD are currently auditing employers and employees to ensure the subsidies are passed on.

Note that the usual employment rules still apply and any reduction in wages must be negotiated between the employer and staff. We strongly recommend recording this agreement in writing signed by both parties.

Here’s some useful links with more detail on wage and leave subsidies:

Wage subsidy – for businesses that have experienced a 30% loss of revenue and are paying staff at least 80% of their usual wages
www.workandincome.govt.nz/covid-19/wage-subsidy/index

Wage subsidy obligations and repayments
www.workandincome.govt.nz/covid-19/wage-subsidy/obligations-and-repayments

Leave subsidy - for employees and sole traders who cannot work from home, and who cannot attend work due to COVID-19 restrictions
www.workandincome.govt.nz/covid-19/leave-support-scheme/index

IRD info on the subsidies and calculating tax

General tax info 
www.ird.govt.nz/covid-19/business-and-organisations/employing-staff/wage-subsidies

For employers - Covering income tax, GST, record-keeping, Kiwisaver, with business examples 
www.ird.govt.nz/covid-19/business-and-organisations/employing-staff/wage-subsidies/wage-subsidy---issues-for-employers

For self-employed and contractors - Covering tax years, ACC, childcare costs
www.ird.govt.nz/covid-19/business-and-organisations/employing-staff/wage-subsidies/wage-subsidy---issues-for-self-employed

Information on employment rules and workplace safe practices under COVID-19
www.employment.govt.nz/leave-and-holidays/other-types-of-leave/coronavirus-workplace/

4-May-2020

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