As part of the 2020 Budget, Grant Robertson announced the Wage Subsidy Extension Scheme (WSE Scheme), which takes the place of the original Wage Subsidy Scheme (WSS). The WSE Scheme opened for applications on 10 June – and is targeted towards the businesses still needing support from the effects of COVID-19.
Here are the details in a nutshell:
- The WSE Scheme is available to companies, partnerships, self-employed, contractors and charities.
- Applicants need to have suffered an actual 40% decline in revenue over a 30-day continuous period compared with a comparable period in 2019. This 30 day period must be within the 40 days prior to application.
- Applicants must have waited 12 weeks from the date they applied for the original WSS before applying for the WSE Scheme – and this 12 weeks is measured in respect of each employee. This means businesses will need to make multiple applications if they didn’t apply for all employees at the same time in relation to the original WSS. This could get complicated because for each tranche of employees a new assessment of at least 40% revenue loss will need to be made.
- Employers need to seek written consent from each employee for whom the WSE Scheme will be applied for. There was some confusion around this requirement for the original WSS – but it has been spelled out in no uncertain terms for the WSE Scheme and will be more strictly enforced.
- The weekly subsidised amount is the same as for the WSS, although the WSE Scheme runs for an eight week period rather than 12 weeks– so payments are $4,686.40 for a full-time employee and $2,800 for a part-time employee.
- If a self-employed person makes a claim, they must repay the subsidy to the extent that it is greater than they would ordinarily draw from the business.
- If an employee leaves, the WSE Scheme funds must be used to help other employees. If there are no other employees, any balance must be repaid.
- Employers need to commit to retaining staff for whom the WSE Scheme funds are received.
- The WSE Scheme amount must be passed on in full to employees unless they ordinarily earn less.
- Employers should do their best to pay employees at least 80% of their normal pay and must follow all employment laws.
- Recipients need to have taken active steps to mitigate the impact of COVID-19 on their business.
- New or high growth businesses will be able to make comparison to revenue within 2020 rather than comparing to 2019.