The government has announced a COVID-19 leave payment scheme to provide support. What does this mean for business owners?
In summary, if your employee has to self-issolate, is sick with COVID-19, or caring for others with COVID-19, and unable to work from home, Ministry of Social Development will pay $585.80 for a full time employee (20 hours or more) and $350 for a part time employee. This payment is to be passed from the business directly to the employee.
The purpose of the leave scheme is to provide employees with a minimum income if they are unable to work. The payment does not affect any paid leave that are owed to the employee and is available even if an employee is on paid leave for part of the period. For example, the employee can still receive sick leave, or take annual leave during this period.
One of the key difference between the leave scheme and the wage subsidy outlined separately here, is that the wage subsidy requires the business owner to demonstrate a 30% decline in actual or predicted revenue when compared with the same month last year, and that decline is related to COVID-19.
Who is eligible?
All employees, contractors, sole traders or self-employed who:
- Are unable to work who are in self-isolation
- Are sick with COVID-19, or,
- Caring for others with COVID-19
If an employee is required to self-isolate but can work at home, they will not be eligible for the leave payment scheme.
What will they get?
$585.80 per week for a fulltime employee and $350 per week for a part time worker.
Who pays it?
Ministry of social development (MSD) will pay the employer, who will then be required to pass it on to the affected employee. MSD will pay on a fortnightly basis once it receives an application.
Other key details of the scheme:
Eligibility is open to all employees legally working in NZ (through their employers), the self-employed and contractors
Eligibility will only be for workers who are not able to work from home:
The entitlement is for:
- Those who self-isolate in accordance with public health guidance and who register with Healthline
- Those who are ill with COVID-19
- Those who cannot work because they are caring for a dependent in either of these circumstances
Those who leave NZ to travel overseas from 16 March 2020, will not be eligible for this payment for self-isolation on their return.
John Smith, a full-time plumber working for Easy Flow Pipes Ltd, arrived back from a three week holiday in Sydney on Tuesday, March 17. Despite feeling well, the Government’s self isolation restrictions meant John had to self-isolate for 14 days.
John had already used his mandatory sick days earlier this year and his employer was not able to cover his wage for 14 days while he was off work. His employer applied to MSD for the sick leave support for John and received a lump sum payment of $1,171.60 to pass on to John for the two weeks he is in self isolation.
You will need:
- your IRD number
- your business name
- your business address
- your New Zealand Business Number (NZBN)
- the names of your employees
- your employee IRD numbers
- contact details for your business and your employees.
New Zealand Business Number (NZBN)
NZBN is a globally unique 13 digit number.
To find your NZBN, if you are a company: type your business name in the search bar on this website
If you are a sole trader, partnership or trust you will need to apply for a NZBN here. You will need a New Zealand driver licence or NZ passport.
We can help with this application process if needed. Please contact us.
Contact Tim Doyle or Jane Evans today for a no obligation phone call or meeting on 07 823 4980 or email us. Our office is in Cambridge, NZ, but distance is no problem. We have many international and national clients.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.