2919673 - A New Leave Support Scheme from COVID-19 Alert Level 3

The NZ Government has announced a new Leave Support Scheme for COVID-19. The scheme is similar to the Essential Workers Leave Support scheme, but it will encompass non-essential workers who would normally be expected to return to work under alert level 3. It is effective from 28 April 2020 in line with the country’s movement to alert level 3.

The scheme enables employers to apply for support to pay workers in four situations:

• Workers who are sick with COVID-19 who are required to remain in isolation until advised by a health professional that they can be released from isolation.
• Workers who are in self-isolation due to close contact with an infected person. For example, a worker identified as possibly infected through contact tracing.
• Workers with dependents who are either sick with COVID-19, or whose dependents are self-isolating as a close contact.
• Workers who have serious health conditions themselves, or in their household, that put them at higher risk of becoming severely ill from COVID-19, and who agree with their employer that they will not work for an agreed period. 

In order to apply the employer must either:

• have had their ability to support employees (who meet the criteria and need to take leave) negatively impacted by the COVID-19 public health restrictions. For example, the cost of paying for their employees' leave and paying for replacement staff is significant, or
  
• have experienced a minimum 30 per cent decline in actual or predicted revenue over the period of a month when compared to the same month last year, or a reasonably equivalent month for a business operating less than a year, and that revenue loss is attributable to the COVID-19 outbreak.

Employers cannot apply for the COVID-19 Leave Support scheme and the COVID-19 Wage Subsidy scheme for the same employee at the same time. If an employer is eligible for both schemes, it may be more appropriate for them to apply for the COVID-19 Wage Subsidy, as this is of longer duration and more flexible.

If an employer is receiving payments from COVID-19 Leave Support Scheme, the employer must make best endeavors to pay the employee(s) named in the application at least 80% of their usual salary/wages.

If that isn’t possible, and the employee’s usual wages are above the subsidy rate, the employer must pay at least the subsidy rate (For example full-time or part-time).

If the employee's usual wages are less than the subsidy, the employer must pay them at least their usual wages. Any extra funding from the leave payments provided must be used for wages or salaries for workers in the business where possible.

The subsidy rate is:

• $585.80 per week (gross, before tax) for each full-time worker (where they usually worked 20 or more hours a week before COVID-19)
• $350.00 per week (gross, before tax) for each part-time worker (where they usually worked fewer than 20 hours a week before COVID-19)

The COVID-19 Leave Support Scheme covers a four-week time period, with the option for organisations to re-apply for those same workers every four weeks, if necessary. Employers can also make further applications for additional workers who are eligible at any time, while the scheme remains open.

The payments are used to fund employers paying wages and salaries and are subject to normal tax payments. This means they are subject to the usual employer deductions (For example PAYE, Student Loan, KiwiSaver, or Child Support).

Refer to the Work and Income website https://workandincome.govt.nz/covid-19/essential-workers-leave-support/index.html for full details and the process to apply for the payment.  Applications will be taken from 1 May 2020.

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COVID-19, New Zealand, Wage Subsidy scheme, COVID, Essential Workers, Leave Support, Alert Level 3 , KBA , PY-NZ , New Zealand , PA-PA-NZ , New Zealand , How To