Posted on Monday, 6th April, 2020
Self-isolation measures across the country due to COVID-19 are resulting in an uncertain future for hospitality employees. On Wednesday 25 March 2020, New Zealand entered Alert Stage 4, meaning the complete closure of all non-essential businesses for a period of at least four weeks as the country fights to eliminate the deadly virus.
Since it can be hard to quickly locate relevant information, we’ve compiled an up-to-the-minute resource of assistance packages that are available to hospitality employees today.
- If you’ve lost your job due to the current COVID-19 situation, talk to your previous employer to see if you can be re-employed and paid under the wage subsidy scheme.
- If you’re under financial stress, talk to your bank about a loan repayment holiday and your landlord about rent relief options such as a payment plan.
- Visit the government-endorsed website sorted.org.nz/ for some excellent money-related advice and actionable plans.
- For the latest on the country’s response to COVID-19, visit the government’s official information hub at covid19.govt.nz/government-actions/current-covid-19-alert-level.
- Make sure you stay as active as possible to support your emotional wellbeing.
The centrepiece of the New Zealand government’s economic response to COVID-19 is its wage subsidy scheme, which supports workers by ensuring they continue to receive an income, even if they are unable to work during the lockdown.
The scheme operates through existing employer payment channels, and businesses apply on behalf of their employees. Each eligible business receives a lump sum that is paid to employees on their existing payment cycle, or another cycle by mutual agreement, for a period of 12 weeks.
Your employer must keep you on their books in order to qualify to receive a subsidy from the government. Note that the scheme is also available to employers who recently let employees go due to COVID-19, provided those employees are re-hired.
The COVID-19 wage subsidy is paid at a flat rate of $585.80 for people working 20 hours or more per week or $350.00 for people working less than 20 hours per week.
When an employer receives the wage subsidy on your behalf, they have agreed to try their hardest to pay you at least 80% of your usual wages. If that isn’t possible, your employer needs to pay you at least the subsidy rate listed above.
It’s important for you to know that the subsidy helps employers pay wages. It does not change any of the other obligations an employer has to you under employment laws, meaning you must still be paid appropriately under your employment agreement for the hours you work.
Do this: The wage subsidy scheme is designed to keep New Zealand workers in jobs by giving their employers a helping hand with wages, irrespective of whether they’re in an essential or non-essential sector. Employers will continue to pay you as usual whether you’re able or unable to work. If you’ve been asked to stand down, talk to your previous employer about the prospect of being re-hired under the wage subsidy scheme.
If you’ve lost your job, the New Zealand government’s Jobseeker Support payment will help you while you look for work. Jobseeker Support is a weekly payment that comes with a set of obligations you need to meet. Click here to find out more: workandincome.govt.nz/products/a-z-benefits/jobseeker-support.html.
Do this: If you find yourself out of work and need financial support, apply for Jobseeker Support here: workandincome.govt.nz/online-services/apply/index.html.
Mortgage or rental costs can be the biggest concern for an individual who’s lost their job or is enduring a significant drop in their income.
In measures that took effect on 26 March 2020, residential tenancies cannot be terminated for an initial period of three months to ensure tenants aren't faced with the prospect of homelessness during the pandemic. Additionally, the government has instituted a freeze on rent increases for an initial period of six months. Both measures will be reviewed at the end of these initial periods.
Government body Tenancy Services has developed an extensive list of questions and answers, including information for tenants seeking rent relief. In summary, the advice is for people to do their best to meet their rental payment obligations. Eligible workers can seek financial support from the wage subsidy scheme, while other tenants should get in touch with government agencies such as Work and Income to see what assistance might be available to them. A tenant in financial stress is encouraged to discuss options, such as a payment plan, with their landlord.
More advice on tenancy-related issues, including information and links to dispute resolution processes, can be found at: https://www.tenancy.govt.nz/about-tenancy-services/news/coronavirus-covid-19-what-landlords-and-tenants-need-to-know.
Do this: To find out more about government measures for tenants during the COVID-19 pandemic, visit www.hud.govt.nz/residential-housing/covid-19-rent-freeze-and-tenancy-terminations/.
As part of an opt-in process, New Zealand’s retail banks will defer mortgage repayments for six months, although it is important to note that deferred interest will be added to the outstanding loan amount.
Do this: Talk to your lender about their specific procedures if you need a deferment of your home loan repayments as a result of a change in circumstances due to COVID-19.
The government is spending $480 million to double the Winter Energy Payment in 2020 and $2.4 billion over the next four years to permanently increase main welfare benefits by an extra $25 per week from 1 April 2020. And, in recognition of the reduced hours many workers will face due to the impact of COVID-19, families with children who retain some level of work will no longer need to satisfy the hours test to receive the In Work Tax Credit.
Do this: No action needs to be taken to receive these entitlements, each of which is calculated and credited automatically.
For the next two years, the Commissioner of Inland Revenue will be able to waive interest on late tax payments for those whose ability to pay on time has been adversely affected by their COVID-19 circumstances.
Do this: Individuals will need to show an inability to pay tax by the due date as a result of being significantly impacted by COVID-19. Detail on eligibility testing is pending.