COVID-19 wage subsidy - your questions answered

Applications for the COVID-19 wage subsidy opened on Friday.
Applications for the COVID-19 wage subsidy opened on Friday. Photo credit: GettyImages.

Applications for the COVID-19 wage subsidy are now open - and to get them processed as quickly as possible, we've got answers to frequently asked questions below.

Available from Friday, businesses who have - or expect to have - at least 40 percent revenue loss as a result of the move to COVID-19 level 4 lockdown can apply for the COVID-19 wage subsidy. As retail and hospitality venues can't open under level 4 restrictions, they're among the businesses likely to have had an immediate drop in revenue.

The Ministry of Social Development (MSD) said it's working closely with Inland Revenue to process wage subsidy applications. On Friday morning, around 450 staff were ready to start processing, and had capacity to "ramp up to 700 during the day", it said.

Based on questions arising from the COVID-19 wage subsidy in March 2020, Newshub asked the Ministry of Social Development (MSD) to confirm the process this year.

Q1. What are the COVID-19 wage subsidy August 2021 payment rates?


  • Full-time workers (20 plus hours per week): $600 per week. 
  • Part-time workers (less than 20 hours per week): $359 per week.

The wage subsidy is paid as a two-week lump sum.  Employers receiving the subsidy are asked to keep staff on throughout the two-week period. 

Q2. How will I know my application is received?

After submitting the application online, applicants will receive an email, MSD said.

Q3. How long will the subsidy take to process?

To avoid delays, MSD group general manager client service support, George Van Ooyen encourages employers and sole traders to ensure that the information they provide in their application is correct.

Subsidies will normally be paid to applicants "within three days of applying", he said.

"When you apply, we validate your business information with Inland Revenue before payment is made, Van Ooyen said.

"Approved applications will be acknowledged by email or text."

Q4. Will I be contacted about my application?

George Van Ooyen confirms businesses may be contacted about their application if they're a large employer, the information they provide doesn't match what's held by Inland Revenue, if they've made multiple applications, or if the business doesn't appear to be eligible.

Businesses can also be contacted if their application includes an employee they've already claimed a subsidy for, or if the businesses repaid (was asked to repay, or declined), a previous wage subsidy.

Here's more details on what information is checked.

Q5. How can I receive the subsidy as fast as possible?

George Van Ooyen said businesses can help the process by doing two things:

  1. Complete the right application for the size of business. Rather than use the online application, large employers (with 80 staff or more) might find it easier to put the information on a spreadsheet and send it to MSD. Guidelines for large businesses can be found here.
  2.  Check the application against Inland Revenue checklists and review the declaration.

Q6. Will I need to provide proof of 40 percent revenue loss?

Although businesses don't need to provide proof of revenue loss upfront, George Van Ooyen confirms they're now required to "prepare and retain evidence" to support their application.  

Following wage subsidy "audits, allegations or investigations" in July 2020, MSD asked 750 employers accessing the wage subsidy to repay the money. 

"To qualify, applicants meet the revenue decline test set out in the declaration, including that they are experiencing, or predict they will experience, at least a 40 per cent decline in revenue as a result of the move to Alert Level 4," Van Ooyen said.

Q7. If a part-time employee normally earns less than the part-time subsidy payment of $359 per week, what do I pay them?

Employers are encouraged to pass on "the full, or up to 80 percent" of the subsidy payment to staff.

"Where the ordinary wages or salary of a named employee (as at 16 August 2021), is lawfully below the amount of the subsidy, then businesses should pay the employee that amount [ordinary wage or salary]," Van Ooyen said. 

Employers can pay the full amount of the subsidy if they wish, he added.

Q8. If a business owner has experienced 40 percent revenue loss due to COVID-19 but has been self-employed for less than one year, can they apply for the wage subsidy*?

"Businesses and self-employers are only required to compare their drop in revenue to a typical 14-day consecutive period of revenue in the six weeks immediately prior to the move to Alert Level 4 on 17 August 2021, Van Ooyen confirms. 

In a media conference on Wednesday, Finance Minister Grant Robertson said as the among the benefits of the wage subsidy were it's "simplicity" and "speed" a "moving scale" of revenue loss wasn't being considered.

"Any more caveats that we put upon it which slow that down...we have to have some kind of measure of the alert levels' effect on a business," Robertson said.

*Added 23/8/2021.