20 September 2021

Wage Subsidy August 2021

With the increase to Alert Level 4, the Government has opened the Wage Subsidy August 2021 Scheme.  Eligible employers anywhere in the country can apply for it if they expect a loss of 40 percent of revenue.

You can apply to contribute to the wages of your employees, or yourself, if you are self-employed. Businesses will be eligible for $600 per week per full-time equivalent employee, and $359 per week per part-time employee. The Wage Subsidy August 2021 rates have been increased to reflect the increase in wage costs since the scheme was first used in March 2020.

The Wage Subsidy August 2021 is paid as a two-week lump sum. The first round opened on 20 August 2021, and has now closed, as has the second round which was open between 3-16 September. Applications for the third round, Wage Subsidy August 2021 #3, opened at 9am on Friday 17 September and will remain open until 11.59pm on Thursday 30 September. The revenue test period for Wage Subsidy #3 is 14-27 September 2021.

You can apply for more than one round of the wage subsidies, two weeks after your previous application, provided you meet eligibility criteria. If you applied for a previous round and were eligible, WINZ will email you to let you know when to apply for the next round. Don’t send in early applications, they won’t be accepted as each payment is for a two-week period. If you didn’t apply for the initial Wage Subsidy you can apply for Wage Subsidy #2 or Wage Subsidy #3, if you meet eligibility criteria.

Are you eligible?

Employers, Sole Traders, Partnerships and Contractors are eligible to apply.

Eligibility criteria:

  • Your business must be registered and operating in New Zealand
  • Each of the employees named in your application must be legally employed by your business, be employed in New Zealand and have not been given notice of redundancy at the date of your application
  • Before making an application, you must have taken active steps to mitigate the impact of the move to Alert Level 4 on 17 August 2021 on your business activities
  • You must prepare and retain evidence to support this declaration, such as records that demonstrate how the decline in your revenue was attributable to the move to Alert Level 4 on 17 August 2021 and what mitigation actions you have taken

Eligibility criteria includes the requirement for businesses to demonstrate they have had, or predict to have, a decline in revenue that can be attributed to the effect of the move to Alert Level 4 on 17 August 2021. Businesses must demonstrate at least a 40% decline over the revenue test period (the revenue test period is different for each round of Wage Subsidy funding, see the WINZ website for details), compared to a typical 14-day consecutive period of revenue in the six weeks immediately before the move to Alert Level 4 on 17 August 2021.

Businesses with highly seasonal revenue may compare their revenue over the revenue test period with the same fortnight in either 2020 or 2019 to determine whether they meet the required revenue drop to be eligible.  Applicants will need to demonstrate why their revenue is seasonal and why they cannot use the default comparator period.

How to apply

You can apply online at WINZ. The online form you fill out depends on whether you have people working for you or not. You must be in New Zealand or Australia when you make the application.

The full eligibility details and obligations are set out in the declaration, which you must read and agree to when you apply for the COVID-19 Wage Subsidy August 2021.

The declaration is important, as it is stated that you can be prosecuted under the Crimes Act 1961 for non-compliance.  Note that the declaration requires the applicant to:

  • Prepare and retain records to support the revenue decline calculation and how it was attributable to the move to Level 4, seasonable businesses have additional requirements
  • Provide evidence of the active steps taken to mitigate the impact of the move to Alert Level 4 on their business, including approaching their bank, using cash reserves and claiming insurance
  • Obtained consent from their employees to include them in your application and provide their details to MSD
  • Retain employees and pay them at least 80% of their ordinary wages or salary and at least the full amount of the subsidy to each named employee
  • Agree to repay the subsidy if they are no longer entitled to it, including where a forecast revenue drop does not eventuate

To apply, employers need their IRD number, NZBN, business name, address and contact details, employees’ names, IRD numbers and contact details. Self employed and other non employers need their IRD number, business name and address.

Once you submit an application, WINZ will usually process this within three working days.

Other information

Employers cannot receive the Wage Subsidy August 2021 for any employees for whom they are receiving the Leave Support Payment or Short Term Absence Payment. However, employers can also apply for the Resurgence Support Payment.

Need further help?

Please contact your Nexia advisor with Wage Subsidy August 2021 enquiries or for help applying. You can find our general contact details here: www.nexia.co.nz/contact-us

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