Covid Support Payment

On 21 February 2022 the Government announced a new Covid Support Payment will be made available for business who have been impacted by the shift to the Red Setting due to the Omicron outbreak. 

Businesses must compare their revenue for 7 consecutive days in the six weeks prior to the move to Red Phase 2 on 15 February 2022 with a 7 day period after 15 February 2022, and show a 40% drop in revenue. 

The payment will be $4,000 plus $400 per full time equivalent employee, capped at 50 full time equivalent employees or $24,000.  The payments will be on a fortnightly basis for six weeks with applications open on 28 February 2022 and the first payments being made on 1 March 2022. 

 

Small Business Cashflow Loan

The small business cashflow loan is still available to businesses to help them with business costs.

Changes have now been made to the scheme to allow businesses to draw down an additional $10,000 with a new repayment period of five years with the first two years being interest free.

The interest free period on the original loans have also now been adjusted.  Previously, if the loan was not repaid within two years, interest would apply from the first day of the loan.  Now, no interest will accrue in the first 2 years but will start from the beginning of year three of the loan.  This applies to business who have already taken out the loan, as well as new loans.

 

Sick Leave and Omicron

With the Omicron variant now in the New Zealand community employers are asking what their obligations are around paying staff if they need to isolate.  There are currently two support schemes available to employers where employees are impacted by Covid-19 and these are on an employee by employee basis rather than business-wide.

Short term absence payment - STAP ($359 one-off payment / once every 30 days)
www.workandincome.govt.nz/covid-19/short-term-absence-payment/how-to-apply.html

Leave Support Scheme - LSS ($600 full-time or $359 part-time weekly payments)
www.workandincome.govt.nz/covid-19/leave-support-scheme/how-to-apply.html

Below are the most common scenarios employers will face.

Scenario One – An Employee is sick with Covid-19

·         The employer can apply for the Leave Support Scheme.  Sick leave or annual leave can then be used to top up wages to 100% if there is a shortfall.

·         If the circumstances mean the subsidy is not available, then sick leave can be taken. 

 

Scenario Two – An employee has symptoms & is waiting for a test result

·         The employer can apply for the Short Term Absence Payment.  Sick leave or annual leave can be used to top up wages to 100% if there is a shortfall.

·         If the circumstances mean the subsidy is not available, then sick leave can be taken. 

 

Scenario Three – An employee does not have symptoms but is testing for a valid reason

·         A valid reason must be given by the employee for the test and time off needed. 

·         The employer can apply for the Short Term Absence Payment and annual leave can be used to top up to 100%.

·         Sick leave cannot be used in this situation as the employee is not sick.

 

Scenario Four – The employee needs to isolate due to having Covid-19 Or other Covid-19 related reasons

·         If the employee can work from home then pay their normal wages.

·         If the employee cannot work from home and has Covid-19 then the employer can apply for the Leave Support Scheme and wages can be topped up by from sick leave or annual leave.

·         If the employee cannot work from home, and they or a dependent is a close contact or under a health directive and required to isolate for at least 4 days, then the employee can apply for the Leave Support Scheme and top up with annual leave.

 

Note, in all cases where annual leave is being considered to top up an employees wages, the employee must agree to this and know that it is their choice to do so. 

The employer can also pay Special Leave to employees rather than using up an employees annual leave or sick leave.  There is no obligation for an employer to do so and it is an extra benefit being given to the employee.