The wage subsidy scheme the Government launched to help coronavirus-hit workers could cost as much as $12 billion.
The Government has tweaked its employer wage subsidy scheme to prevent "double dipping" and told employers they must pass the full subsidy to workers and keep them employed.
Finance minister Grant Robertson said it had modified the wage subsidy scheme, which is estimated to cost between $8 billion and $12b, to ensure people don't lose their jobs during the national lockdown.
The changes include telling businesses they must pass on at least the whole value of the wage subsidy to each affected worker if it is not possible to pay them at least 80 per cent of their pre-Covid-19 wage.
The wage subsidy is $585.80 a week for full-time workers - those who worked 20 or more hours a week before Covid-19 - and $350 a week for part-time workers (fewer than 20 hours).
It is being paid in a lump sum meaning $7029.60 per full-time worker.
Businesses must also keep their employees in employment during the subsidy, which runs for 12 weeks.
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Robertson said it was also folding the previous sick leave scheme into this scheme to prevent double-dipping.
"The original sick leave scheme was designed when few people were in self-isolation, and it is no longer fit for purpose. We are working on arrangements for those in essential work who require sick leave due to Covid-19."
Robertson said the changes were about keeping New Zealanders in lockdown connected to the job they were in before it started.
"This ensures businesses not able to operate do not need to lay off staff. Even if this requires businesses to operate with no activity, the subsidy allows them to keep their workers on the books, particularly during Alert Level 4."
Robertson said the subsidy did not change any other employment law obligations and employees must be paid appropriately under their employment agreements for the hours they work during the lockdown.
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"We are running this scheme on a high-trust model to get money out the door and support the workers, families and businesses who are affected by Covid-19.
"We are also preparing an appropriate audit process that will act as a backstop for this high-trust model," Robertson added.
The Government has so far paid $2.7b for 428,768 workers.
Meanwhile, rough estimates indicate at least 75 per cent of the employed population is at home.
The wage subsidy scheme is part of a package of initiatives aimed at mitigating the impact of a four-week shut down of non-essential services.
As of 9am Friday, the Ministry of Social Development had received 267,924 applications for the Covid-19 wage subsidy and 24,531 applications for the Covid-19 leave payment.
"We want to reassure employers that we are endeavouring to deal with the high volume of applications as quickly and efficiently as possible," said Jayne Russell, employment group general manager.
Only 24 hours earlier - by 9am Thursday - the government had paid $1.5b for 244,887 employees. A total of 72,913 applications had been paid and 111,898 applications were approved and about to be paid. Another 47,434 were still to be processed.
The scheme – together with a raft of others – "will provide something of a safety net for the economy".
"They will not prevent a massive drop in economic activity, but they will prevent the worst of the ongoing damage," said Westpac Bank chief economist Dominick Stephens.
Meanwhile, an estimated 75 per cent of the nation's 2.65 million employed people are either not working during the shutdown or working from home as the nation battles the spread of Covid-19. The streets of the capital are eerily quiet as the vast majority of people have adhered to the edict to stay at home.
Stats NZ estimates that, at the time of the 2018 census, up to 680,000 workers, or 27.8 per cent, worked in an essential industry.
It noted, however, that many of those are also likely working from home as even essential services are restricting activity to what is truly essential during the level 4 alert.
Essential workers will include at least 58,000 nurses, registered nurses and nurse practitioners, about 28,000 doctors on the Medical Council of New Zealand's register and about 9000 constabulary police staff. The primary sector - most of which is deemed essential - employs more than 350,000 people, according to the Ministry for Primary industries. Where possible, however, they will be working from home.
Director-general of health Ashley Bloomfield said today more than 2500 retired health workers have already registered to help "and that number continues to grow".
There are now 368 confirmed and probable cases in New Zealand, up from 283 yesterday. Of those, 37 have recovered, eight are in hospital - six are stable and two who are not. One of those is in intensive care in Nelson Hospital.
Bloomfield expects the daily number of cases to grow and it will take a week to 10 days before that number starts to turn around.
"It will turn around if we keep doing our bit," he said. "Modelling shows that the higher the level of compliance with the measures in place under alert level 4 the greater its impact will be on reducing the number of Covid-19 cases."
Any New Zealand registered employer who has experienced a minimum 30% loss in revenue because of COVID-19 over any month from January when compared to the same month last year. New businesses that are less than a year old and high growth firms need to show revenue loss against a similar time period such as a 30 per cent drop in March compared to January of this year.
Self-employed people can also apply if they can show a 30 per cent loss of income in March 2020 compared to the average monthly income they would have received in the last year. Registered charities, non-governmental organisations, incorporated societies and post-settlement governance entities are also included
The wage subsidy is $585.80 a week for full-time workers (who worked 20 or more hours per week before COVID-19) and $350 a week for part-time workers (fewer than 20 hours). It is paid out in a lump sum covering the 12 weeks, meaning a $7,029.60 payment per full time worker.
What are the conditions of getting it?
The employer must make the best endeavour to pay staff a minimum of 80% of their previous wage. If this is not possible then they must pass through the entire government subsidy. Employers must also keep the worker employed for the full 12 weeks of the subsidy.
