Wage subsidy scheme extended

Friday, May 15, 2020

One of the measures included in the government’s budget announcement on Thursday, was an extension of the COVID-19 Wage Subsidy Scheme.

The Wage Subsidy Extension payment will be available to support employers from 10 June 2020.

This scheme is targeted at employers, including sole traders, who are still significantly impacted by COVID-19 after the Wage Subsidy ends. To be eligible for the Wage Subsidy Extension, employers must have suffered, or expect to suffer, a revenue loss of at least 50% for the 30 days prior to the application date, compared to the closest period last year.

As before, the payment will be made as a lump sum, but this time it will cover 8 weeks per employee. The amount of the payment remains the same, that is, a flat rate of:

  • $585.80 per full-time employee per week (working 20 hours or more per week); or
  • $350 per part-time employee per week (less than 20 hours per week).

Employers will be required to complete a new declaration form to confirm (among other things) that they meet the eligibility criteria for the extended scheme and will comply with their obligations, including agreeing to:

  • pass the subsidy on to their employees;
  • retain those employees for the duration of the subsidy;
  • do their best to pay employees at least 80% of their normal pay; and
  • take active steps to mitigate the impact of COVID-19 on their business.

Applications for the Wage Subsidy Extension payment will open on 10 June 2020 and can be made until 1 September 2020.

Employers cannot receive more than one COVID-19 payment for the same employee at the same time. This includes the Wage Subsidy, Leave Support Scheme and Wage Subsidy Extension. This means employers won’t be able to apply for the Wage Subsidy Extension for an employee until their 12-week Wage Subsidy has finished.

The government has not ruled out further extensions to the Wage Subsidy Scheme and we can expect to see more announcements in the weeks and months ahead. We will continue to monitor developments and will provide updates as more information comes to hand.

Please contact our employment or corporate and commercial teams for further assistance.


Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose. While we make every effort to ensure the accuracy of the information contained in this article, this is a rapidly changing environment and the information will be subject to change.

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