COVID 19 - 8 Week Wage Subsidy Extension
The Wage Subsidy Extension applications open on 10 June 2020 and will be open until 1 September 2020 so that employers are able to keep paying their employees during this uncertain time.
What is the Criteria for the Wage Subsidy Extension?
You must have had at least a 40% revenue loss for a continuous 30 day period. The 30 days need to be within the 40 day period before you
apply and must be compared to the same/closest period last year.
Other Key Points:
- You can’t apply for the 8 Week Wage Subsidy Extension until the 12 Week Wage Subsidy has finished. This means if you applied for the 12 Week Wage Subsidy on Monday 30 March 2020, you can not apply for the 8 Week Wage Subsidy Extension until Monday 22 June 2020.
The subsidy covers 8 weeks per employee.
A full-time employee (more than 20 hours per week) receives $585.80 per week for 8 weeks totalling $4,686.40
A part-time employee (less than 20 hours per week) receives $350.00 per week for 8 weeks totalling $2,800.00
- The 8-week Wage Subsidy extension will be paid out as a lump sum.
- If your employee’s wages are less than the subsidy, you need to pay them their usual wage and any difference should be used to cover the wages of other affected staff.
You will need to agree to certain obligations similar to the 12 Week Wage Subsidy such as:
- Pass the subsidy on to your employees.
- Retain your employees for the duration of the 8 Week Subsidy.
- Do your best to pay your employees at least 80% of their normal pay.
- Take active steps to mitigate the impact of COVID-19 on your business.
Frequently Asked Questions:
What does the term revenue loss mean?
- Revenue means the total amount of money a business has earned from normal business activities before expenses are deducted. This means that expenses do not come into the calculation of working out revenue loss.
Can new businesses still apply for the wage subsidy extension?
- Yes, businesses who have been operational for less than one year are still able to apply for the wage subsidy extension. To prove the 40% revenue loss, your business will need to compare against another 30-day period this year instead of the same period last year.
Can I apply for the wage subsidy on behalf of my casual employee(s)?
- Yes, you can apply for the wage subsidy for any casual employee(s) that are employed by you at the time you apply and would have been expected to work during the time you will receive the wage subsidy.
Example – Applying for the 8 Week Wage Subsidy Extension:
A business originally applied for the 12 Week Wage Subsidy on Wednesday 1 April 2020, and the 12 Week Payment will expire 12 weeks later on Tuesday 23 June 2020. That means that the earliest the business can apply for the 8 Week Wage Subsidy extension is Wednesday 24 June 2020.
I am going to compare the same 30 day period in 2020 as in 2019 to see if I have a 40% revenue drop.
Tuesday 21 May 2019 to Thursday 30 June 2019 a Revenue = $175,000
Thursday 21 May 2020 to Saturday 20 June 2020 a Revenue = $110,000
When comparing these two periods, the business needs to experience a 40% drop on $175,000 of revenue. The revenue for the period in 2020 can be no more than $105,000 to qualify.
$175,000 x 40% = $70,000
$175,000 less $70,000 = $105,000
As the business did not experience a minimum of 40% revenue loss (Revenue was $110,000, which is $5,000 more than the minimum drop allowed) this means they are not able to apply at the moment.
However, over the next 8 weeks, the business could continually reassess the revenue received and compare it with the same period last year to see if they are eligible.
It may be a case of looking at the business bank accounts daily and comparing whether the previous 30 days have experienced a 40% revenue loss in comparison to the same period in 2019.
We are well positioned to provide advice and support to all our clients as we self-isolate as a country. This includes guiding your business through this unprecedented situation as they access government supports and entitlements. While our offices are closed, we are still open for business.
Should you need support during this challenging time, please get in contact with one of our partners.
Alan Macdonald – firstname.lastname@example.org or 021 324 527
Jack Perniskie – email@example.com or 03 208 1314
Erin Howes – firstname.lastname@example.org or 027 208 0262
Caleb Macdonald – email@example.com or 021 020 04636
Tim Walsh – firstname.lastname@example.org or 027 436 8663
If you have any general questions, feel free to use our contact us form on the website.