Covid Update - 16 February 2022

It’s been a few months since the last Covid update.  The key changes since then include:

  • A change in alert level to red

  • A move from phase 1 to phase 2

  • Changes to testing and returning to work during Omicron

  • Changes to mask rules

  • In the last few weeks rapidly growing spread of Covid-19 across the community

  • Initial indications from the government that the wage subsidy/resurgence schemes won’t be reintroduced out (so there are only two types of support currently available – detailed below).

Testing and returning to work during Omicron 

The rules depend on what phase we are at. The Government has announced we are moving from Phase 1 to Phase 2 at 11:59pm tonight. 

At Phase 2: 

  • anyone with symptoms must isolate and get a test

  • cases need to isolate for 10 days

  • close contacts need to isolate for seven days (with a test on day five).

If a close contact is vaccinated and asymptomatic, they may be able to continue to work: 

At Phase 3: 

  • anyone with symptoms must isolate and get a test

  • cases need to isolate for 10 days

  • close contacts need to isolate for seven days (and get a test if symptomatic)

If a close contact is vaccinated and asymptomatic, they may be able to continue to work: 

Covid Loans 

The Covid Loan scheme is still open.  Applications are open until 31 December 2023. 

The scheme was introduced to support small to medium businesses and organisations struggling with a loss of actual revenue due to COVID-19.  

Repayments & interest 

Loans are subject to an annual interest rate of 3% from the date the loan is made available to you. However, the following general rules apply: 

  • If you fully repay the loan within 2 years, you will not be charged any interest.

  • If you do not fully repay the loan within 2 years, you will be charged interest for the entire term of the loan.

  • Repayments are not compulsory in the first 24 months.

  • Voluntary payments can be made at any time.

  • After 24 months, you'll be required to make regular payments for both the principal and interest.

We note that the 24-month period will soon start for some taxpayers.  You should consider repaying this within the 24 months. 

Reapplying for the loan 

It’s possible to repay the loan and then reapply once.  You would need to meet the criteria again, this is broadly:  

  • Your business must have 50 or fewer full-time-equivalent employees (FTEs)

  • You need to have been in business for 6 months

  • Your business must be viable

  • You must have experienced at least a 30 percent decline in actual revenue. This decline in revenue is measured over a 14-day period in the 6 months before applying, compared with the same 14-day period one year ago. If the revenue from the same period 1 year ago was affected by COVID-19 as well, compare with the same 14-day period two years ago.

There are still the same restrictions on the use of the loan.   

If eligible and you have a need for the additional funds, you should consider repaying and reapplying.

COVID-19 Leave Support Scheme (for those isolating) 

The COVID-19 Leave Support Scheme is available to employers, including self-employed people, to help pay their employees who have been advised to self-isolate because of COVID-19 and can’t work at home during that period. 

This means your employees can't come into work because they are in one of the affected groups and have been told to self-isolate. 

There is no income test.  

The COVID-19 Leave Support Scheme is paid at the rate of: 

  • $600 a week for full-time workers who were working 20 hours or more a week.

  • $359 a week for part-time workers who were working less than 20 hours a week.

To be eligible for a one-week payment of Leave Support Scheme your employee will have been advised to self-isolate for at least four consecutive calendar days. 

There are conditions. Further information can be found here 

COVID-19 Short-Term Absence Payment (for those waiting for a test) 

The Short-Term Absence Payment is to help businesses keep paying eligible employees who: 

  • cannot work from home, and

  • need to miss work to stay home while waiting for a COVID-19 test result (in line with public health guidance).

There’s a one-off payment of $359 for each eligible worker. You can only apply for it once, for each eligible employee, in any 30-day period (unless a health official or doctor tells the employee to get another test). 

There is no income test.  

There are conditions. Further information can be found here 

Paying staff under these schemes 

The employer must pay their employees any amount required by the employment agreement and employment legislation.  So, where your employee has an entitlement to be paid as per their employment agreement or the law (e.g. by taking paid sick leave) you will need to use the subsidy to pay your employee their entitlement under the Holidays Act. 

Where your employee wouldn’t otherwise have an entitlement to be paid if they are not able to work (e.g. if a worker has used up their paid sick leave so would be on unpaid leave) you: 

  • Should try to pay your worker as if they had worked that day, or

  • At least 80% of their usual pay (this is only stated on the leave support webpage, but it would be prudent to consider it as applying for both payments), or

  • Where this is not possible, you must pay at least the full amount of the Payment to the employee while they are waiting for the relevant test.

If you can't pay your employees their usual wages, then any reduction in wages or agreed hours of work requires good faith consultation and written agreement in line with existing employment law. 

Please get in touch with us if you have any queries.  

Michael Parker