The Government announced new rules for the wage subsidy scheme in an attempt to keep people in jobs, so the recovery after the Covid-19 coronavirus pandemic "can start quickly".
Finance Minister Grant Robertson today said the changes brings the cost of the wage subsidy scheme from $8 billion to $12 billion. It was originally estimated to cost $5.1 billion.
The changes brought in are:
- The current sick leave scheme is being folded into the wage subsidy scheme.
- Employers to pay their employees 80 per cent of their pre-Covid income. If this is not possible then employers that take up the scheme must pass on the entire wage subsidy to their employee.
- Employers are required to keep their workers in employment for the period of the wage subsidy scheme.
The scheme is $585.80 per week for full-time workers and $350 for part-time workers. It is paid in a lump sum over seven weeks. Overall, a full time worker is a total payment of $7,029.60.
So far, $2.7 billion has been paid out for 428,768 workers.
"The Covid-19 pandemic has moved fast," Mr Robertson said before reflecting the initial wage subsidy scheme was only announced just over a week ago.
He said folding in the current sick leave scheme into the wage subsidy scheme was "to prevent double dipping".
"The leave scheme was designed at a time when we had very few people unable to work... clearly that has changed."
They are looking into a sick leave provision scheme for essential workers, especially for those over 70 and with high-risk health conditions.
Mr Robertson said they are also continuing to require employers to pay their employees 80 per cent of their pre-Covid income.
"However, if this is not possible then employers that take up the scheme must pass on the entire wage subsidy to their employee.
"This applies to all workers, they must receive the full value of the subsidy."
"Even if the lockdown requires the business to continue with no activity, the subsidy allows them to keep their workers on the books.
They are also requiring employers to keep their workers in employment for the period of the subsidy.
He said keeping employees on was a vital "so a recovery can start quickly".
It brings the cost of the wage subsidy scheme from $8 billion to $12 billion - dependent on how many businesses take it up.
The number of coronavirus cases in New Zealand rose by 85 today, with 76 new confirmed cases and nine new probable cases. It brings the country's total number of cases, both confirmed and probable, to 368.
Earlier this week, the wage subsidy scheme jumped from $5.1 billion up to $9.3 billion - pulling the worth of the Government's entire business package up to $16.3 billion. The $150,000 cap was also lifted.
Yesterday, Finance Minister Grant Robertson said $1.5 billion had been paid so far under the wage subsidy scheme.
Mr Robertson said 244,887 workers had been paid, 72,913 applications had been paid out, 111,898 applications had been approved and are about to be paid out and 47,343 were yet to be processed.
"This is and has been the result of an extraordinary effort by Ministry of Social Development," Mr Robertson said.