Wage Subsidy, Mortgage payment delay and other issues

Wage Subsidy, Mortgage payment delay and other issues

What you should know as New Zealand heads to shutdown

Deserted Karangahape Road in Auckland CBD (Stuff Photo)

Venkat Raman
Auckland, March 25, 2020

New Zealanders must be aware that their interests, their health, income and wellbeing will be protected as the country moves into lockdown at 1159 pm, NZT.

This would be the highest Alert- Level 4 – to prevent the spread of Covid-19.

The government has declared a Stage of Emergency under the Civil Defence Act.

Prime Minister Jacinda Ardern will announce the promulgation of the Epidemic Preparedness Act this afternoon, which would mean extensive restrictions on movement of people over the next four weeks, after which the situation will be reviewed.

This is an unprecedented situation for New Zealanders and although the government has announced several economic and financial packages over the past ten days, an increasing number of readers have asked Indian Newslink clarification on many issues.

The following has been provided to the best of our knowledge but should not be taken as advise or final information. We do not accept any responsibility for any change or if any of the following does not apply to you or any other development before or after this has been published.

We advise you to contact the concerned officials or departments for official information. Phone: 0800-408040.

Wage Subsidy

The government has announced a subsidy for permanent and part-time employees.

Called, ‘The COVID-19 Wage Subsidy,’ it will be available to all employees who are legally employed within in New Zealand. There will be a flat payment of $585.80 for people working 20 hours or more per week and $350 for people working less than 20 hours per week.

Employers must apply online www.workandincome.govt.nz

They should satisfy the criteria prescribed.

They would be required to fill in details of their business in the prescribed fields and the names of employees individually confirming their hours of work (20 hours or more a week and less than 20 hours a week). They would also be required to give a declaration that the monies received will be paid to the employees mentioned in the application.

Any breach will be treated as fraud and the employer will be liable for prosecution under the law.

$150,000 cap removed

The government has removed the cap on wage subsidies that can be paid to employers affected by COVID-19. The cap of $150,000 per business is gone. This applies to all New Zealand employers, contractors, sole traders, self-employed people, registered charities and incorporated societies.

Employers who have already applied for and been granted the wage subsidy for their employees, and the Ministry of Social Development has capped the amount paid, they do not need to do anything because the government will top up the difference.

Employers who have applied for the wage subsidy for their staff and claimed only enough to meet the cap, once they have used this subsidy, they can reapply.

Leave Payment

From March 17, 2020 COVID-19 Leave Payment will be available to support people financially if they (a) need to self-isolate (as determined by the Ministry of Health guidelines) (b) cannot work because they are sick with COVID-19, or (c) cannot work because they are caring for dependents who are required to self-isolate or are sick with COVID-19.

The COVID-19 Leave Payment will be available for eight weeks from March 17, 2020. Employers will be able to apply for this more than once. It will be paid to employers who have eligible employees and they must pass the payment onto their employees in full.

Employers, contractors, sole traders or self-employed may qualify to get the COVID-19 Leave Payment, which covers full-time, part-time and casual employees, and contractors who are legally working in New Zealand and (a) who need to self isolate in line with Ministry of Health Guidelines and have registered as needing to self-isolate with Healthline (b) cannot work from home and their self-isolation is not because they left New Zealand since the travel restrictions on March 16, 2020 and have since returned or (c) cannot work because the person has been diagnosed with COVID-19 or cannot work because they are caring for dependents who are required to self-isolate or who are sick with COVID-19.

Mortgage Holiday

The Government, Reserve Bank of New Zealand (RBNZ) and retail banks announced yesterday a major financial support package for homeowners and businesses affected by the economic impacts of COVID-19.

The package will include a six month principal and interest payment holiday for mortgage holders and SME customers whose incomes have been affected by the economic disruption from the global health crisis perpetrated by coronavirus.

Protecting jobs, economy

The Government and the banks will implement a $6.25 billion Business Finance Guarantee Scheme for small and medium-sized businesses, to protect jobs and support the economy through this unprecedented time.

Finance Minister Grant Robertson said that the government, RBNZ and retail banks are acting quickly to get these schemes in place to cushion the impact on New Zealanders and businesses from this global pandemic.

“These actions show how we are all uniting against COVID-19. We will get through this if we all continue to work together. A six-month mortgage holiday for people whose incomes have been affected by COVID-19 will mean people won’t lose their homes as a result of the economic disruption caused by this virus,” he said.

Mr Robertson said that specific details of this initiative are being finalised and agreed urgently and banks will make these public in the coming days.

Many banks have announced that they will open on certain day/s in a week to help people conduct their banking business. However, they will be subject to restricted access and safety regulations including social distancing.

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