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Freelancers and sole traders: How to apply for the Covid-19 wage subsidy

You don’t have to be a business with employees to apply for the government’s wage subsidy. That’s good news for more than 380,000 of us. 

Updated: an expansion to the Wage Subsidy Scheme was announced on March 23 along with the announcement that New Zealand would go into lock down for four weeks. The details below have been updated to reflect those changes.

Of the 550,000 businesses registered in New Zealand, 70% have no employees. That’s 385,000 New Zealanders who work for themselves. Live performers, building contractors, taxi drivers, artists, massage therapists, beauty technicians, sex workers, film and television contractors, freelance designers, writers, stylists, PR people. Many of those depend on close contact with people or the gig economy, and will be unable to continue working during the four week lock down of New Zealand announced on March 23.

The good news is that they’re eligible for the government’s March 17 financial rescue package, which was updated again on March 23. Finance Minister Grant Robertson announced that all businesses, self-employed people, contractors, registered charities, non-government organisations, incorporated societies and post-settlement governance entities that can demonstrate a loss of 30% of their usual revenue are eligible for $585 a week per full time employee and $350 per part time employee for a period of 12 weeks. Payments are made in a lump sum. Organisations can also receive leave payments for any employee who has to self-isolate due to exposure to Covid-19 but can’t work from home .

Those who work for themselves – self-employed, freelancers, sole traders, contractors, what ever you call it – are eligible for these subsidies. Here’s how you can apply.

First of all, you must be either:

  • registered and operating as a business in New Zealand, with a business IRD number for paying tax and GST. That means you sent a lot of paper work to IRD and the New Zealand Companies Office at some point and they said ‘congratulations, you’re a business!’
  • a sole trader, operating in New Zealand, with a personal IRD number for paying income tax and GST in New Zealand, and/or government licences or permits for your business needs, and/or qualifications or registrations for your trade or profession.

You’re eligible for the leave scheme payments if :

  • you have been exposed to Covid-19 and you cannot work from home
  • would usually be earning at least minimum wage during the 12-week period
  • were expecting to work and
  • can’t get paid during that time.

You’re eligible for wage subsidy scheme payments if:

  • you have taken “active steps” to mitigate the impact of Covid-19 on your business. Active steps might include activating a business continuity plan, or seeking advice and support from a bank or financial advisors, the Chamber of Commerce, a relevant industry association, or a Regional Business Partner programme. If you’re talking to a financial advisor, it may be helpful to ask them to assist with reviewing actual or forecast decline in revenue (see next point).
  • you have experienced a 30% decline (or more) in actual or predicted revenue over the period of a month when compared with the same month last year, and that decline is related to Covid-19. So grab your bank statements for say, March 2019 and then figure what you would have made in March 2020. If it’s at least 30% less then you’re eligible. If you haven’t been operating for a year then comparison can be made to a previous month “that gives the best estimation of the revenue decline related to COVID-19”.  That means sole traders can review any month between January and June 2020, and compare it to last year (actual or forecast). 

The leave scheme only applies to those who are in self-isolation due to exposure to Covid-19. The lock down of New Zealand does not now make people eligible for both the leave scheme and the wage subsidy

Applications through Work and Income NZ are now open. There’s more information here, and the application form for self-employed people is here.


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