Update for employers: Government COVID-19 package

19 Mar 20

On 17 March the Government announced an economic response package to mitigate the impact of COVID-19. The total package is valued at $12.1B. Two parts of that package are especially relevant to businesses.


The Wage Subsidy Scheme

Wage subsidies (paid to an employer as a lump sum payment) will be made available to employers that are significantly impacted by COVID-19. The key changes that will result from the Bill, as currently drafted, are as follows:

The amount of the subsidy

The subsidy is calculated with reference to the number of employees you employ. For every:

  1. Full-time employee (20 hours plus) – $585.80 per week; and
  2. Part-time employee (less than 20 hours) – $350 per week.

The calculation is based on a period of 12 weeks. The maximum amount payable to any single employer is $150,000.

Eligibility criteria

To qualify for the subsidy:

  1. Your business must have suffered or be projected to suffer at least a 30% decline in revenue. This is measured against revenue received in the previous year compared to any month between January 2020 and the end of scheme in June 2020. The application can be on the basis of forecast revenue loss.
  2. You must declare that you will use best endeavours to continue to employ affected employees at a minimum of 80% of their income for the subsidy period.
  3. You must declare that you have taken active steps to mitigate the impact of COVID-19 on your business.


Applications are made directly to the Ministry of Social Development through the Work and Income website.

Applications are open until early June 2020.


COVID-19 leave (and self-isolation support)

Where employees are required to self-isolate COVID-19 leave payments may be available on application. These payments are equally available to sole traders and the self-employed.

Eligibility criteria

The COVID-19 leave payment is only available to employees / contractors / self-employed who:

  1. Are required to self-isolate in-line with Ministry of Health guidelines, have registered as needing to self-isolate with Healthline, cannot work from home, and the self-isolation is not because they left New Zealand after March 2020; OR
  2. Cannot work because they have been diagnosed with COVID-19; OR
  3. Cannot work because they are caring for dependents who are required to self-isolate or who are sick with COVID-19.

Ministry of Health self-isolation guidelines are available here.

What is available

COVID-19 leave payments are:

  1. Full-time employee (20 hours plus) – $585.80 per week; and
  2. Part-time employee (less than 20 hours) – $350 per week.

Workers can receive the COVID-19 leave payment at the same time as other paid leave. For example, the employee may be using sick leave or annual leave at the same time as the payment. However the employer is not required to pay the employee more for their time on leave than what they would otherwise have received.


Employers apply for the leave on behalf of employees who are self-isolating or sick with COVID-19. Applications are made here.

The government payment will go to the employer but then must be passed on directly to the affected employee.


Other guidance on employee’s leave and pay entitlements

Employment New Zealand guidance is being regularly updated here.


Want to know more?

If you would like further information or have any queries or concerns, please do not hesitate to contact Anderson Lloyd’s specialist Employment Team.


PDF version: Update for employers – Government COVID-19 package