COVID-19 Leave Support Scheme

The COVID-19 Leave Support Scheme is designed to be accessible for all NZ employers with NZ employees including:

• Registered Charities
• Non-Government Organisations (NGOs)
• Self-employed and Sole Traders
• Contractors
• Incorporated Societies
• Post-settlement Governance Entities
• Local Government Organisations
• Kindergartens and Early Childhood Centres.

State sector organisations are not eligible to receive the COVID-19 Leave Support Scheme unless they have asked for (and been granted) an exception to become eligible for the scheme via their monitoring agency. State sector organisations should contact their monitoring agency directly if they wish to discuss this.

Private businesses contracted to provide services to state sector employers (e.g. Cleaning, security) are not state sector employers, and can apply for the leave support scheme provided they meet the other criteria.

Your business must also be in New Zealand. This means that at the time of application, your business must be:

• Registered with the New Zealand Companies Office
• Physically located in New Zealand
• Employees are legally working in New Zealand

If you are not sure whether your employees are legally working in New Zealand, feel free to visit the Employment New Zealand website here.

Sole Traders are not required to be registered with the New Zealand Companies Office, but will instead be required to provide the following information in respect of their application:

• Personal IRD Number
• Government licenses and permits for their business needs (as applicable)
• Qualifications or registrations for their trade or profession (as applicable)

The COVID-19 Leave Support Scheme is available to eligible workers who cannot come into work because they are in one of the affected groups (listed below), have been told to self-isolate, and they are unable to work from home.

For applications made after 9am on 9 February 2021, the health criteria include employees and self-employed persons who:

1. Are sick with COVID-19 and must self-isolate
2. Have been in close contact with someone who has COVID-19 and must self-isolate (identified through National Contact Tracing)
3. Are the parent or caregiver of a dependent who must self-isolate (identified through National Contact Tracing), and that dependent requires you there to do so safely
4. Have been directed to self-isolate (including parents and caregivers), in accordance with the Health Act 1956
5. Are considered to be at a ‘higher risk’ if they contracted COVID-19 and must self-isolate while there is community transmission
6. Have household member who are considered to be at a ‘higher risk’ if they contracted COVID-19 and must self-isolate to reduce the risk of transmitting to their household member

For applications made prior to 9am on 9 February 2021, please refer to the health criteria set out in the below declarations:

• Essential Workers Leave Scheme (before 12pm 1 May 2020)
• COVID-19 Leave Support Scheme (between 12pm 1 May 2020 and 1pm 21 August 2020)
• COVID-19 Leave Support Scheme (between 1pm 21 August 2020 and 12pm 28 September 2020)
• COVID-19 Leave Support Scheme (between 12pm 28 September 2020 and 9am 9 February 2021)

You can refer to the Ministry of Health Guidelines here.
 

Yes – a newly hired employee is still eligible for the Leave Support Scheme, provided they meet the other criteria.
 

From 9am on 9 February 2021, the scheme does not cover employees in the following situations (among others):

• The employee is a household member or secondary contact of a person who has been identified as a close contact of a person with COVID-19
• The employee is a casual contact of someone who has COVID-19
• The employee is sick with COVID-19-like symptoms but has not been told to self-isolate by an appropriate health professional via the contact tracing process
• The employee is currently overseas or has recently returned from international travel (and must stay in managed isolation)
• The employee is part of a returning international air crew
• The employee cannot work as they are required to care for dependents, and they are unable to access care for the dependents elsewhere (unless the dependent has been required to self-isolate)
• The employee is unable to work as they hold a reasonable belief that continuing work during COVID-19 is harmful to their physical and/or mental health
• The employee is unable to work for any other reason e.g. Bereavement Leave
• The employee is already receiving the COVID-19 Leave Support Scheme or Short-Term Absence Payment for that employee

These situations are not covered by the COVID-19 Leave Support Scheme as there are other payments available to the employees in respect of these scenarios. E.g. Sick Leave, Bereavement Leave.

For excluded employees prior to 9am on 9 February 2021, please refer to the earlier declarations:

• Essential Workers Leave Scheme (before 12pm 1 May 2020)
• COVID-19 Leave Support Scheme (between 12pm 1 May 2020 and 1pm 21 August 2020)
• COVID-19 Leave Support Scheme (between 1pm 21 August 2020 and 12pm 28 September 2020)
• COVID-19 Leave Support Scheme (between 12pm 28 September 2020 and 9am 9 February 2021)

No – you cannot apply for the Leave Support Scheme for an employee if you are already receiving payments for the COVID-19 Leave Support Scheme or Short-Term Absence Payment for that employee.
 

Yes – you must discuss the application with your employee prior to submitting it

• To ensure you gain their consent to the criteria relevant to them under the declaration
• To confirm that they fall into one of the eligible groups
• To confirm they cannot work from home

Part of this discussion should include whether the employee should utilize other leave options, such an annual leave or sick leave. The idea of this discussion is to facilitate open communication between the employer and employee and ensure the employee is well-supported during this time.

The Ministry of Social Development will not be verifying health-related information for employees.

Applications made on or after 1pm on 21 August 2020, do not need to have been financially impacted to be eligible for the scheme.

For applications made prior to this date, the declaration included specific criteria around this, stating that a business must have:

• experienced a minimum 30% decline in actual or predicted revenue over the period of a month when compared to the same month last year, or a reasonably equivalent month for a business operating less than a year, and that revenue loss is attributable to the COVID-19 outbreak; or
• your ability to support your employee due to the COVID-19 public health restrictions was negatively impacted.
   

The Leave Support Scheme is paid at a rate of:

• $585.80 for employees working ≥ 20 hours per week (full-time rate)
• $350.00 for employees working < 20 hours per week (part-time rate)

The Leave Support Scheme will pay out for a fixed two weeks per employee (it is not possible to apply for less than this).
 

Leftover funds can be used to:

• Pay other employees who are also unable to work due to COVID-19
• Top up the wages of employees receiving another COVID-19 payment and are being paid less than their usual rate

If the remaining amount cannot be used to pay other employees, then you will need to repay this amount.

MSD have not advised of a timeframe for payment.

We are aware they are checking information provided in the applications against the information held by IRD, and any discrepancies may result in delays or your application may be declined.

Your application may be declined if you apply to early. i.e. In the case of re-applying for an employee, this cannot be done any earlier than the 2nd week of the original payment period.
 

You should calculate the average hours per week the employee has worked over the last 12 months.

If they employee has worked for less than 12 months, you can calculate their average hours worked over an 8-week period, or any other period if it is more appropriate to do so e.g. Full length of employment.
 

There are three main applications you can use:

1. If you have people working for you
2. If you do not have people working for you
3. If you are a large employer (>100 employees)

A different process is required if you are re-applying for the Leave Support Scheme. You should follow the link for this here.

You do not need to submit a new application to MSD.

You can call them on 0800 40 80 40 and they will correct the error for you.

The COVID-19 Leave Support Scheme does not override employment law, or your obligations to employees under their individual employment agreements.

The scheme does set out additional criteria and obligations you must meet in order to receive and use the subsidy, these can be found here.

Earlier declarations can be found below:

• Essential Workers Leave Scheme (before 12pm 1 May 2020)
• COVID-19 Leave Support Scheme (between 12pm 1 May 2020 and 1pm 21 August 2020)
• COVID-19 Leave Support Scheme (between 1pm 21 August 2020 and 12pm 28 September 2020)
• COVID-19 Leave Support Scheme (between 12pm 28 September 2020 and 9am 9 February 2021)

Per the MSD Website, you must make best endeavours to pay your employees at least 80% of their usual wages. In situations where this is not possible, you must pass on at least the Leave Support payment.

You must pay 100% of the employee’s usual wages if these are less than the Leave Support Payment.

The COVID-19 Leave Support Scheme does not override employment law, or your obligations to employees under their individual employment agreements.

If you intend to modify employment agreements as part of your response and recovery from COVID-19, we encourage you to seek independent legal advice.

You can also refer to the Employment New Zealand website here.

You should also give consideration to the minimum wage, as employees should not be paid below this under any circumstances.

We recommend making payments to employees in their usual pay cycles. Making lump sum payments can have adverse implications for your employees in other areas, including:

• Working for Families entitlements
• Marginal Tax Rates

The declaration can be accessed below for:

• Essential Workers Leave Scheme (before 12pm 1 May 2020)
• COVID-19 Leave Support Scheme (between 12pm 1 May 2020 and 1pm 21 August 2020)
• COVID-19 Leave Support Scheme (between 1pm 21 August 2020 and 12pm 28 September 2020)
• COVID-19 Leave Support Scheme (between 12pm 28 September 2020 and 9am 9 February 2021)
• COVID-19 Leave Support Scheme (after 9am 9 February 2021)

You may need to repay the COVID-19 Leave Support Scheme if:

• you no longer meet the eligibility criteria
• you are not meeting your obligation to retain and pay your employees
• you provided false or misleading information in your application
• your employee returns to work before the 2-week period is finished (and there are no other employees you can use the subsidy for)
• your employee voluntarily resigns (and there are no other employees you can use the subsidy for)
• your employee has been made redundant (you will need to repay the remaining subsidy to MSD, after you have paid the employee their wages)
• your business has closed
• you have applied for the wrong payment rate (e.g. you applied for the full-time rate and you only needed the part-time rate)
   

You can repay the subsidy using the application form found here.

Yes – if you want to re-apply for the same employee (meaning the payment is required for more than 2-weeks), then you can submit this application in the  2^nd week.

You can re-apply for the same employee for as long as the payment is required, and they meet the eligibility criteria.

The forms can be found below:

1. If you have people working for you
2. If you do not have people working for you
3. If you are a large employer (>100 employees)