The Government has announced a wage subsidy to support employees of small businesses seriously disrupted by the Canterbury earthquake.

The support subsidy will be paid to businesses with fewer than 20 employees where earthquake damage means they cannot operate and they cannot pay staff wages.

The subsidy will be paid for up to four weeks initially and businesses can re-apply after four weeks if they are still unable to operate.

Earthquake Support Subsidy:

• $350 per week gross wage subsidy
• Advance lump sum paid to employer
• Employer can ‘top up’ subsidy
• Backdated to date of earthquake
• Firms holding insurance cover for loss of earnings will be expected to use this before accessing the wage subsidy.

Businesses can apply from this Thursday and will be paid within 24 hours.

Employers should call the Government earthquake helpline 0800 779997.

Q and A: Earthquake Support Subsidy

What is Earthquake Support Subsidy?

A payment is available for employers with fewer than 20 staff to assist them to pay their employees if they are unable to open for business or have reduced capacity following the earthquake.  The payment will be made directly to the employer who will then pay the employee.

How much can an employer receive?

The support will cover up to four weeks at $350 gross per week per employee, a total of $1,400 gross per employee.

What if the business is still not operating after four weeks?

If after the initial four weeks the business is still not able to operate, the employer can reapply for the subsidy.

Why is this support limited to businesses with fewer than 20 employees?

Larger employers are more likely to have insurance which will cover loss of wages for their employees, or have the financial ability to continue to pay employees.

I work for a business with more than 20 employees, can I get any support?

You will be able to access Civil Defence Payments from Work and Income.  These are paid at the applicable rate of Unemployment Benefit, which varies depending on your age and marital status.

I’m self employed and can’t get to work, can I get any support?

You will be able to access Civil Defence Payments from Work and Income.  These are paid at the applicable rate of Unemployment Benefit, which varies depending on your age and marital status.

What if I usually earn more than $350 per week, can I get any more money?

You should contact your local Work and Income office to find out if there is any further assistance available to you.

Why is the subsidy going to the employer and not straight to me?

This support is designed to maintain the connection between the employer and their employees.  They will provide Work and Income with the necessary details to ensure it is passed on to you.  In some cases the employer may be able to top up this payment. 

How does an employer access this support?

Employers can apply by contacting the Government Helpline on 0800 77 9997. Application forms for employers will also be available on the Work and Income website and from Work and Income offices.

How much is this costing the government?

It is difficult to estimate how many people will need this support but $15 million has been set aside at this stage. There are an estimated 77,340 employees in small to medium businesses in the affected area and this $15 million will provide support for up to 15% of these employees.

What if my business can still operate but at a reduced capacity?

You will still be eligible for the subsidy for that part of your business that has a reduced capacity. For example, if a business usually employs 10 staff but, due to the earthquake, can currently only operate with five staff then you can apply for the subsidy for these five staff.

What happens if I work part-time?

If your employees work part time, the subsidy will be paid on a pro-rata basis. .

What if I am already receiving a subsidy (for example JobOps)?

We have not put in place hard-and-fast rules for people who are receiving another form of government subsidy.  There are too many possible situations, and flexibility is needed.  If you are receiving another government subsidy, your situation will be considered on its merits based on your personal circumstances.

Will the subsidies affect Working for Families entitlements from Inland Revenue?

Working for Families tax credits will not be affected by the Earthquake Support Subsidy. 

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