Accounting for allowances and benefits for staff: Job Support Scheme Allowance
Job Support Scheme Allowance
Introduction
The Government has introduced a Job Support Scheme (formerly referred to as the 9-day fortnight) which is aimed at helping businesses keep workers.
The scheme provides an allowance administered by Work and Income to supplement the income of workers who have accepted reduced hours to keep their jobs in the current economic climate.
How it works
The scheme:
- encourages businesses to retain workers on reduced hours rather than make them redundant
- gives workers job security during this time
- assists businesses by allowing them to temporarily reduce their costs.
Employers will be paid an allowance of $12.50 per hour (the adult minimum wage) for each employee who agrees to participate in the scheme, up to five hours per fortnight. This allowance is then on paid in full, less any tax deductions to their employees. To be eligible, an employer must currently employ more than 100 staff.
The scheme has been extended from 27 April 2009 to include employers with 50 to 100 employees.
Receiving the allowance
Employers should contact Work and income either by:
- phone on their employer line 0800 778 008, or
- going to Work and Income's website for more information.
For information on employment relations matters please see the Department of Labour website.
Your tax obligations for the Job Support Scheme payments
| When you are ... | then ... |
|---|---|
| paying your employees |
you include the scheme payments in your employee’s salary and wages. As the payments are part of their salary and wages:
|
| paying your employer Kiwisaver contributions | as the scheme payments will be included as part of the employee’s salary and wages, you include these payments in the calculating your employer KiwiSaver contribution |
| completing the GST return and paying your GST |
the scheme payments are to be treated as income and the GST is returned on these payments. At the end of each 4-week period you will invoice Work and income for the scheme payments:
|
| completing your annual return |
these payments are not included as income in your return. The job support scheme allowance you receive from Work and Income is classified as a “government grant”. These payments are therefore excluded income and can not be claimed as a deduction either. |
Date published: 30 Apr 2009
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