COVID 19 FINANCIAL SUPPORT FOR BUSINESSES
Unfortunately, once again we find ourselves back in level 4 lockdown with the latest Covid 19 outbreak.
Here is a summary of the government assistance that is available to businesses and self employed:
Wage Subsidy
The Covid 19 Wage Subsidy is a payment to support employers, so they can continue to pay employees and protect jobs for businesses affected by the move to Alert Level 4 on 17 August 2021.
Who can get it?
The key criteria are:
- The business must be an eligible employer, which includes charities, societies, and childcare centres;
- The employees must obviously be able to legally work in New Zealand;
- The business or self-employed must have at least a 40% decline in revenue across a 14 day period when compared to a typical 14 day revenue period within the 6 weeks prior to the lockdown;
- The business must retain the employees, that you apply for the wage subsidy for, for the period that wage subsidy covers; and
- The business is only eligible for one payment per employee at any given time.
Payment rates
The Covid 19 Wage Subsidy will cover a two week period at the rate of:
- $600 a week for each full-time employee retained (20 hours a week or more)
- $359 a week for each part-time employee retained (less than 20 hours a week).
You can’t get a Wage Subsidy for an employee for the period they're covered by a Leave Support Scheme or Short-Term Absence Payment.
How to apply for the Wage Subsidy?
You'll be able to apply online on the Ministry of Social Development Work & Income website from 9am on Friday 20 August 2021, and applications will be open for two weeks.
Further information on the Covid 19 Wage Subsidy can be found on the Work and Income website by clicking on the button below.
The Ministry of Social Development also offers the Leave Support Scheme and Short Term Absence Payment.
Further information on these can be found on the Work and Income website by clicking on the buttons below.
RESURGENCE SUPPORT PAYMENTS
The Covid 19 Resurgence Support Payment (RSP) is a payment to help support viable and ongoing businesses or organisations due to a Covid 19 alert level increase to level 2 or higher. If your business or organisation is facing a reduction in revenue due to an alert level increase, you may be eligible for the RSP.
Unlike the Covid 19 wage subsidy this can be used for general operating costs and the payment is subject to GST where the recipient is GST registered. The Resurgence Support Payment can also be claimed in addition to the Wage Subsidy if the criteria are met.
Who can get it?
The key criteria are:
- The business or self-employed must have at least a 30% decline in revenue across a 7 day period (which must be within the Alert Level 2 to 4 period), when compared to typical 7 day revenue period within the 6 weeks prior;
- Businesses or self-employed must have been operating for at least 6 months;
- Applicants must be at least 18 years or older at time of application;
- Groups with common ownership are limited to payments based on up to 50 FTE; and
- That the decline in revenue is not related to passive income (interest/dividends).
Payment rates
$1,500, plus $400 per full-time equivalents (FTE), up to a maximum of $21,500 for large groups with common shareholding. Employees that work up to 20 hours per week are consider considered part-time (0.6 FTE), while employees that work more than 20 hours are considered full-time (1.0 FTE).
How to apply for the Resurgence Support Payment?
Applications for the alert level increase announced on 17 August will open at 8am on 24 August.
Businesses will need to apply for the Covid 19 Resurgence Support Payments (RSP) via their business MyIR login. So if you do not have a business MyIR login setup, we would recommend registering over the next couple of days.
Further information on the Covid 19 Resurgence Support Payment can be found on the Inland Revenue website, by clicking on the button below.
SMALL BUSINESS CASHFLOW LOAN SCHEME
A reminder for those businesses that may struggle with cash flow due to the on-going effects of COVID-19, that outside of the Resurgence, Leave and Short-term Absence support payments, businesses can still access the Small Business Cashflow Loan Scheme.
There have been a few minor changes to the scheme over the last couple of months, so we have outlined the key aspects:
- The business or self-employed must have experienced at least a 30% decline in revenue due to COVID-19, over a 14 day period in the last 6 months, when compared to the same 14 day period last year;
- The business or self-employed is available to employers with 50 or fewer full-time equivalent employees;
- Businesses or self-employed must have been operating for at least 6 months;
- The amount payable is $10,000, plus $1,800 per FTE (maximum $100,000 loan);
- Loans are available for up to 5 years from the date of application;
- Applications are open until 31 December 2023;
- If the loan is paid back within 2 years, the loan will be interest-free;
- If the loan is paid back after 2 years, then an interest rate of 3% applies; and
- Business can apply for the loan a second time before 31 December 2023, if it has been fully repaid before that date.
Further information on the Small Business Cashflow Loan Scheme can be found on the Inland Revenue website, by clicking on the button below.
