Coronavirus: Wage subsidy to be extended nationwide as COVID-19 alert levels stretched out for 12 days

Finance Minister Grant Robertson has confirmed the wage subsidy scheme will be extended nationwide now that the current COVID-19 alert levels have been extended.  

"The latest COVID-19 outbreak is obviously disappointing, especially for businesses that have just got up and running again. But we have a plan in place to deal with it," Robertson said on Friday. 

Cabinet has made an in-principle decision to extend the wage subsidy for the whole country and modify the COVID-19 Sick Leave Scheme to make it more accessible. Details will be finalised during the weekend and announced on Monday. 

An extension to the mortgage deferral scheme has also been agreed in-principle after the existing scheme was due to expire on September 27. Details, including the length of the extension, are also being finalised and will be announced next week. 

It comes after Prime Minister Jacinda Ardern confirmed on Friday that the alert level 3 lockdown implemented in Auckland on Wednesday through to Friday will be extended for a further 12 days after COVID-19 was discovered in the community.  

The rest of the country will also stay at alert level 2 for an additional 12 days. 

"I am mindful of the extraordinary disruption to business and the anxiety that this outbreak will be causing. As before, we will use what tools we have to protect jobs, incomes, and businesses as well as people's health," Ardern said. 

"To provide certainty to businesses and workers I can confirm today that Cabinet has made an in-principle decision to extend the wage subsidy scheme to support businesses and protect jobs as we undertake the public health measures required to fight the virus."

Wage subsidy extension

The wage subsidy had already been extended and is available for applications until September 1. It's available for businesses that have experienced a 40 percent decline in their revenue across a 30 day period within the 40 days they apply. 

The rate is $585.80 for full-time workers and $350 for part-time workers. 

Businesses have been able to apply to receive an additional eight weeks of financial support. The original wage subsidy scheme was for 12 weeks. 

Robertson acknowledged that the public health measures the Government is taking will affect businesses across the country. 

"This includes tourism operators who are expecting visitors from Auckland, companies that supply Auckland businesses, and the hospitality and retail sectors in other parts of the country now operating under level 2."

He said the criteria and eligibility requirements for the latest extension to the wage subsidy will be similar to previous criteria. 

The extension will be available to businesses that have already finished receiving the wage subsidy, as long as they meet the criteria, and it will cover the period that the current alert level restrictions stay in place.

Advice from the Ministry of Social Development is that the extension to the scheme will be able to be operational within five days of the decision.

COVID-19 Sick Leave Scheme 

The COVID-19 Sick Leave Scheme is available for employers, including sole traders, to pay their workers who cannot work if they are sick and need to stay home and self-isolate. 

It was called the 'COVID-19 Essential Workers Leave Support' because it was only available to essential businesses. The name was changed because it's now available for all employers who meet the criteria. 

The rate is the same as the wage subsidy scheme. 

"We are very aware that those who are required to self-isolate may be concerned if they do not have any sick leave entitlements left or the business they work for is not eligible for the scheme under current settings," Robertson said. 

"We want everyone to feel confident that if they return a positive test that they will be looked after."

The final details of these modifications will also be decided on Monday. 

As for the Small Business Cashflow Scheme, that will remain open until December 31 and gives interest-free loans for up to a year of up to $100,000 for businesses employing 50 or fewer workers. 

There is also the COVID Income Relief Payment for people who lose their job between March 1 and October 30 as a result of COVID-19, which is paid at the same rate as the wage subsidy for 12 weeks and that remains open until November 13. 

The Government last month set aside $14 billion from the $50 billion COVID Response and Recovery Fund announced in Budget 2020 in case New Zealand experienced a second wave of COVID-19. 

"This was so we could ramp up the health response quickly, and support affected businesses and protect jobs as we undertook the necessary public health measures to stamp out the virus," Robertson said. 

"There is also money remaining in the existing wage subsidy allocation that will help meet the costs of this further extension."