Extension to Wage Subsidy
Wednesday, June 10th, 2020
Previously, to qualify for the extension it was advised that you must have experienced a minimum 50% decline in revenue in the 30 days before you apply, when compared to a similar period last year.
This has now been changed to a 40% drop in revenue for a 30 day period in the 40 days before applying (starting no earlier than 10 May 2020), compared to a similar period last year.
A couple of other key features of the Wage Subsidy Extension are:
- 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 the amount of the subsidy is more than an employee’s usual wages you must use the surplus to fund other employees wages where possible and, where this is not possible, return any surplus funding to MSD. These obligations will also apply to self-employed workers, ie if you are self-employed and you receive a subsidy that is more than your usual earnings, you will be required to repay the balance to MSD.
Before your current 12-week Wage Subsidy ends, the MSD will email you to let you know when and how to apply for the 8-week COVID-19 Wage Subsidy Extension – if you still need it to pay yourself or your staff.
The email will list the staff you were paid the 12-week COVID Wage Subsidy for, and give you details about when you can apply for the Wage Subsidy Extension for them and any other staff.
The Wage Subsidy Extension must be passed on to the employees you claim for and your obligations under employment law will continue to apply.
The above information was sourced from the MSD.
We have received indications that should you apply for the extension, you should expect these payments to be audited. Due to this, we strongly advise that all your paperwork is in order should you need to produce evidence. We are here to help you calculate whether you have had a 40% drop in revenue that qualifies, and any other aspects of the application.
Please note, that if you are an audit shield customer, any of our fees incurred due to an audit will not be covered as it is not the IRD that will be conducting the audit.
For full information and to apply for the wage subsidy extension, click here