We are now approaching the one-year anniversary of when New Zealand went into lockdown for the first time due to Covid-19.  This brought in a raft of measures by the Government to help businesses stay afloat during the uncertainty and to try to bring some stability to our economy.  With the vaccine role out underway there is a light at the end of the tunnel however the Government has kept in place measures to help businesses should they still be impacted by Covid-19 and we detail some of these below:

 

Short-Term Absence Payments

From 9 February 2021 the Government has introduced a short-term absence payment for when employees are absent from work due to waiting on a Covid-19 test result, when the employee cannot work from home.  This also applies to the parent or caregiver of a dependant who is staying home while waiting for a Covid-19 test result and the dependant needs support to do so safely, or a household member or secondary contact of a close contact of a person with Covid-19, and they have been advised to stay home while waiting for the close contacts test results. 

The payment is a one-off amount of $350 per eligible employee per 30 day period, unless a health officer or doctor tells the worker to get another test.  You have up to 8 weeks to apply for the payment after their absence from work, however the test must have been carried out on or after 9 February 2021.  Your employees do not need to have exhausted their sick or annual leave entitlements to be eligible for the payment and the payment must be used to cover the employee's wages, however if it is more than the employee would normally receive for their time of absence, it can be used to pay other staff. 

If you are self-employed or a shareholder employee you are also eligible for this payment. 

Applications can be made online but before you do so, you need to discuss the application with your employee and get their consent. 

For more information see the Work & Income website (https://www.workandincome.govt.nz/covid-19/short-term-absence-payment/index.html)

 

Self-Isolation Payments

For employees who are told by a health officer to go into self-isolation and cannot work from home, the Covid-19 leave support scheme is available.  This includes employees who are sick with Covid-19 and have been told to self-isolate, are a close contact or the parent/caregiver of a close contact of someone who has Covid-19 and have been told to self-isolate, or other instances where a medical professional has instructed the person to self-isolate due to Covid-19 risk. 

The payment is $585.80 for full time employees and $350 for part-time employees and this covers a two week period.  If they employee needs to continue to self-isolate, you can reapply in the last week for a further 2 week payment.

If your employee returns to work within the two week timeframe covered by the payment, you can use the remainder of the subsidy to pay other employees, such as other employees self-isolating due to Covid-19 or those who are being paid less than their usual rate due to Covid-19.  If you do not have other employees or they are already being paid their normal wages, then you need to repay the remaining amount.

Self-employed and shareholder employees are also entitled to this payment. 

If employees are self-isolating while they await their test results, then the Short-Term Absence Payment should be applied for instead. 

For more information see the Work & Income website (https://www.workandincome.govt.nz/covid-19/leave-support-scheme/index.html)

 

Small Business Cash Flow Loan Scheme

Applications for the loan have been extended to 31 December 2023.  The Small Business Cash Flow Loan Scheme provides a loan of up to $100,000 to businesses who employee 50 or fewer full-time employees, including sole-traders and self-employed businesses.

The loan is made up of an initial $10,000 plus $1,800 per equivalent full-time employee.  It is interest free if paid back within the first 2 years.  If it is not paid back within the first two years then an interest rate of 3% p.a. applies for a maximum term of 5 years.  Additionally, no repayments are required in the first two years.

To be eligible you must show a drop in turnover of at least 30% due to Covid-19 measured over a 14 day period in the last 6 months.

Previously the loan was only for use to cover the day to day running expenses of the business however this has now been broadened to include the buying of equipment. 

Applications can be made through the IRD's MyIR by going to the "I want to" section and selecting "Apply for small business loan". 

 


While the above information is correct at the time of writing the situation is constantly evolving.  If you would like further information on any of the above or what other options are available for support during Covid-19, please do not hesitate to be in touch with our office.