A leading economist is welcoming modifications to the government's wage subsidy scheme to ensure people keep their jobs during the national lockdown

Under the modifications, businesses accessing the scheme must still undertake their best endeavours to pay employees 80 percent of their pre-covid income, or pass on at least the whole value of the wage subsidy to each affected worker.

Businesses must also try keep employees in employment for the period of the subsidy.

The New Zealand Initiative's Doctor Eric Crampton says it's better than the previous scheme.

He says it will make it easier for employers to keep workers on and keep paying them.