COVID-19 Leave Payment (available before 27 March 2020)

If you're an employer, contractor, sole trader or self-employed, you may qualify to get the COVID-19 Leave Payment.

COVID-19 Leave Payment covers full-time, part-time and casual employees, and contractors who are legally working in New Zealand and who:

• need to self isolate in line with Ministry of Health Guidelines and have registered as needing to self-isolate with Healthline, cannot work from home and their self-isolation is not because they left NZ since the travel restrictions on 16 March 2020 and have since returned or
• cannot work because the person has been diagnosed with COVID-19 or
• cannot work because they are caring for dependents who are required to self-isolate or who are sick with COVID-19.

Eligible employers and employees

When applying for the Leave Payment the employer will consider whether:

• the employee was legally working for their employer at the time they decide to self-isolate; and
• they were expected to work for the period of self-isolation.

Self-employed people who are legally working in New Zealand can get this payment for themselves if they were expecting to work for the period of self-isolation.

State sector employers cannot receive the payment as it is expected they will pay employees their normal wages through periods of self-isolation.

State sector employers include:

• Government agencies
• Crown entities eg Kāinga Ora, ACC
• Schools
• Tertiary Education Institutions
  • Universities
  • Polytechnics/Institutes of Technology
  • Wananga

The following employers can access the COVID-19 Leave Payment:

• Councils
• Kindergartens
• Early Childcare Centres
• Non-Government organisations

Using paid leave entitlements or COVID-19 Leave Payment when self isolating

You and your employee can agree to use any form of paid leave (eg annual leave) to cover their period of self-isolation.

However, employees aren't required to have used any or all their paid leave entitlements before they can receive this payment.

If your employee is diagnosed with COVID-19, do they have to use their accrued sick leave before they are eligible for the COVID-19 leave payment?

Employees do not need to use their sick or annual leave entitlement before you can apply for the COVID-19 leave payment - it can be applied for right away. You can have a conversation with your employee about whether they would prefer to use any accrued sick or annual leave first, rather than the COVID-19 leave payment as there may be cases where the employee would receive more through their own sick leave than the COVID-19 payment.

You'll need to agree to a declaration as part of your application.

The COVID-19 leave payment will be paid at a flat rate of:

• $585.80 to a person working 20 hours or more per week
• $350.00 to a person working less than 20 hours per week.

Employers receiving the payment for employees who are required to self-isolate can receive it for 14 days. As people may be required to self-isolate more than once, employers will be able to apply for this on an 'as needed' basis. It can be paid for the entire period an employee is sick (or looking after a dependent person who is sick) with COVID-19 but the employer must apply every 14 days.

You will need:

• your IRD number
• your business name
• business address
• the names of your employees
• your employee IRD numbers
• contact details for your business and your employees.

We will then check if you qualify.

We may contact you if we need further information regarding your application. We'll do this by phone.

If your application is:

• approved:
  • we'll email and text to confirm that we have approved the application and made a payment
  • you receive the payment.

• declined, we'll notify you.

If you have any questions about these payments, give us a call on 0800 40 80 40.

We'll be processing and approving applications as quickly as we can.

We'll text and email you once the payment is made.

Your bank will use this reference for your payment: Leave Payment - MSD COVID19L

Audits and reviews

You will need to declare you meet the criteria for payment as part of your application. All payments will be subject to audits and reviews.

Tax questions

If, as an employer I am receiving the leave payment on behalf of an employee because they are in self-isolation, do I have to pay GST?

No - it will be treated as exempt from GST.

If I'm self-employed do I have to pay tax if I receive a leave payment because I am in self-isolation?

This payment will be treated as income for tax purposes.

If I'm an employee do I need to pay tax if I receive a leave payment because I am in self-isolation?

The leave payment will be paid to your employer, and you will receive it like normal wages. This means it's subject to the usual PAYE, Student Loan, KiwiSaver deductions, etc.

Charities

If I'm an employer of a registered charity, incorporated society, non-government organisation, or post settlement governance entity am I entitled to apply for the leave payment for my employees?

Yes, you can apply for the leave payment if your employees are required to self-isolate because of Ministry of Health Guidelines and cannot work from home. Employees may not be able to work from home because:

• of the nature of their occupation e.g. trades people or you cannot provide employees the ability to work from home e.g. no access to laptops.
• they have been diagnosed with COVID-19
• they are caring for dependents.