Government Support Schemes


Under the current Traffic Light Framework for managing COVID-19, the government has introduced further financial support for businesses.


There are two schemes available for employers to access depending on whether staff are required to isolate because of COVID-19 or whether they must stay away from work while awaiting a COVID-19 test result.


In brief, both schemes are available for the employer to apply for - they are not automatic and there is no requirement for an employer to apply for either scheme.


Which scheme is applicable to an employer will depend on the circumstances and requires the employee's approval to make an application. Funds under the schemes are provided only for named individuals.


Leave Support Scheme

There are obligations on the employer to take all reasonable endeavours to pay the employee their normal wage or at least to pay 80% of the employees' wages. If, under this scheme you intend to only pay 80% of wages, you must negotiate this and seek the explicit agreement of the employee. Without this agreement, the terms of their employment agreement apply in respect to their wages, meaning you must pay them their full normal wage.


The employer:

  • must also agree to retain the employee and not seek to make their role redundant.

  • cannot compel the employee to use leave, and must only use the subsidy for the purpose it is applied for (e.g. wages)

As with the previous wage subsidy, the full subsidy must be paid to the employee unless their normal wages are less than the subsidy. In this case, the balance may be used to top up another employee(s) wages. If any amount of the subsidy is not used to top up another named person, it must be repaid.


Before applying for the Leave Support Scheme the employer needs to consider whether the employee can work from home. If the employee can perform work from home while they are isolating, then they should continue to be paid their normal wage. In such circumstances the employer would not meet the criteria for receiving the Leave Support Scheme payment.


Payments under this scheme are $600 per week for employees working 20+ hours and $359 a week for employees working less than 20 hours.


Eligibility for the Leave Support Scheme also requires the employee to have been advised to self-isolate for at least 4 days by either a medical practitioner, the National Investigation and Tracing Centre, a Medical Officer of Health, or under a COVID-19 Order.


More details on this scheme are on the Work and Income website.


Short Term Absence Payment

This scheme is intended to provide financial assistance for wages of employees who are cannot work from home and MUST stay away while awaiting a COVID-19 test result.


This payment does not apply in instances where an employee simply chooses to stay away because they believe they might have COVID-19 and go for a test. The criteria for the employer to apply for this payment (and for the Leave Support Scheme) is that their employee has been REQUIRED to have a test by either a medical practitioner, the National Investigation and Tracing Centre, a Medical Officer of Health, or under a COVID-19 Order. If the employee can work from home, as with the Leave Support Scheme, they would not be eligible for the Short Term Absence Payment.


The payment under this scheme is a one-off payment of $359 per employee. The employer may only apply for an employee once in any 30-day period unless the employee has been instructed to take another test by either a medical practitioner, the National Investigation and Tracing Centre, a Medical Officer of Health, or under a COVID-19 Order.


The employee cannot be forced to take their leave for their absence from work.


More details on this scheme are on the Work and Income website.


Employers cannot apply for both schemes for an employee. Only one or the other will apply.


In both circumstances, employers should follow the latest Public Health advice when it comes to the employee returning to work.


Always seek advice when considering your obligations under these schemes. McKone Consultancy can assist you if assistance is required.


Photo credit: Austin Kehmeier on Unsplash.com


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