Covid-19

Govt strengthens Covid-19 wage subsidy rules

Coronavirus-hit Kiwi businesses that apply to the Government's wage subsidy scheme must pass on the full amount to their employees - even if they are entirely closed down, Prime Minister Jacinda Ardern and Finance Minister Grant Robertson have confirmed.

The Government has also scrapped a separate sick leave regime, folding it into the wage subsidy scheme to prevent "double dipping" by unscrupulous employers.

The wage subsidy scheme, unveiled last week, initially had a $150,000 cap so it was targeted at smaller businesses - a limit that was lifted on Monday after news that New Zealand would move into a full lockdown.

Speaking to media on Friday, Robertson said an initial requirement that employers who applied to the scheme had to undertake "best endeavours" to pay staff at least 80 percent of their usual wage would remain in place.

However, if that was not possible due to a business being entirely shut down, they still had to pass on at least the entire value of the government subsidy (up to $585.80 a week) to each worker.

Companies also had to undertake to keep all staff employed for as long as they received the subsidy, with Robertson saying it was important to keep staff on the books so the economy could get back to normal as soon as possible after the lockdown lifted.

The Government had also decided to fold the sick leave scheme for self-isolating employees into the wider wage subsidy process, given the former initiative had been set up when there were relatively few Kiwis who could not be in their usual workplaces.

Robertson said that was to avoid "double-dipping" from companies accessing both the wage subsidy and sick leave schemes for the same employees.

Asked how many had done that before the changes today, he said: "Not too many but we were running the risk we would end up with a great deal more."

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