Budget 2020: Wage subsidy scheme extended for another eight weeks

Finance Minister Grant Robertson had further extended the earlier announced $13 billion wage subsidy scheme to help businesses keep jobs deal through Covid-19 lockdown by another eight weeks. 

Wage Subsidy Extension announced

A Wage Subsidy Extension payment will be available to support employers who are still significantly impacted by COVID-19 after the Wage Subsidy ends.

The Wage Subsidy Extension will be available from 10 June 2020 until 1 September 2020. Eligible employers will need to reapply through Work and Income once their current 12-week subsidy has come to an end.

The weekly rates will be the same as under the current Wage Subsidy, and the Extension will provide an 8-week payment per named employee. It will be paid to the employer as a lump sum. The Wage Subsidy Extension must be used to pay employees’ wages and receiving it does not change existing employment law obligations.

Eligibility criteria raised to 50 per cent loss in the previous 30 days of applying 

The Wage Subsidy Extension will be open to the same types of employers currently eligible for the wage subsidy. For the Wage Subsidy Extension, an employer must have experienced a revenue loss of at least 50% for the 30 days before the employer applies for the extension, compared to the closest period last year. 

Eligibility criteria in the original wage subsidy scheme were 30 per cent fall in revenue  

In the original wage subsidy scheme announced in March this year the eligibility criteria for businesses to apply for govt funds was as follows. 

• have had a 30% revenue drop due to COVID-19
• will retain named employees for at least the duration of the subsidy (12 weeks)
• will pay named employees, at a minimum:
  • for any work they do at their normal rates
  • at least 80% of income where reasonably possible (for employees working reduced hours while self-isolating)
  • the full subsidy received for each named employee, except where a person’s income is normally less than the subsidy amount, in which case they can be paid their normal salary.