Updated Wage Subsidy from the Government – What you need to know.
This is not a time to panic, even though you may only see doom for your business. Take time to logically think through what you need to do. Work on one thing at a time, work quickly and then move on to the next.
We are hearing of companies terminating staff in large numbers, we see this decision, at the present moment, a very drastic and short-sighted step. It places your staff in a very bad situation that can be avoided for the immediate lock down phase. The Government subsidy terms have changed in the last 24 hours and with these changes many businesses will be able to provide their staff with some income during this time.
Prior to yesterday the wage subsidy criteria was a lot stricter and meant that you had to provide evidence that your company had had a 30% decrease in income during the previous couple of months compared to the same time last year; you must then guarantee your employees employment for 12 weeks and you had to pay 80% or more of their wage. The declaration form (find here) has changed with these criteria being a predicated downturn in your business income, and you will endeavour to keep your staff employed and pay them 80% of their salary.
With Work and Income’s criteria for the emergency benefit remaining unchanged at the moment, many staff who have partners may not be allegeable for assistance if made redundant.
Therefore we are recommending that you apply for the wage subsidy for each of your employees, and then as things unfold over the coming 4 weeks you can make decisions with a clear head about how your business is going to manage the next period. This may mean a restructure at the end of this lockdown period; however, you would have given your staff some time to get their heads around what is happening and for the Government to roll out further measures to support individuals and businesses going forward.
At best, if all you can do is pass on the Government wage subsidy then this will be ‘your best endeavour’ to provide some income and potentially a job for your staff once your business is up and running again. However, consider working out what 80% of your staff salary is, minus the wage subsidy and see if you can manage the difference, every little bit will help during this pandemic lockdown period.
To apply for the wage subsidy, read through the declaration form (version 2) from the Government website (attached) and if you have any questions about whether you qualify or not give us a ring. This declaration form can only be found after you select from the drop-down box in the first box on the application form. Please read here.
In preparing to fill in the form make sure you have the following information because if you do not get through the first time, all your information will be lost and you will have to re-enter it again. When we did this for our own company, we had to enter in our information five (5) times before it went through. Be prepared to do it several times as everyone is applying, as the site can only cope with so many applications at a time.
For your employees: have each of your employee’s full name, date of birth and their IRD numbers available as this is required in completing the application form.
As a business you will need your Business Number (from the company registry office, search online if you don’t have it), your business IRD number and the bank account number you want the money to be paid into.
You will also have to have the name, phone number and email address of the main contact person in your business who can discuss your application with Work and Income if required.
Secondly, cut costs as quickly as possible in your business and stop all automatic payments – this will enable you to manage your cash flow and time payments when possible.
We will continue to send out information to you as we learn about it and keep you informed as much as possible during this time. We will still be available throughout the entire Lockdown period so do not hesitate to contact us and discuss your situation.
Remember we are here to help you plan and manage through this situation.
The staff at Russell Drake Consulting.