COVID-19 Wage Subsidy Scheme and Resurgence Support Payment reinstated
COVID-19 WAGE SUBSIDY
Applications for the COVID-19 Wage Subsidy August 2021 are now open.
The Wage Subsidy August 2021 is 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. Please note that this includes self-employed persons.
- You operate a business in New Zealand that employs and pays employees.
- Your business is being, or will be affected by the move to Alert Level 4 on 17 August 2021; and
- your business has had, or you are predicting will have, a decline in revenue (attributed to Alert Level 4) of at least 40% over the period 17 August 2021 to 30 August 2021 when compared to a typical 14-day period of revenue in the six weeks immediately prior to the move to Alert Level 4 on 17 August.
- If you are an employer that has highly seasonal revenue, a drop in revenue of at least 40% over the revenue test period (17 August – 30 August) when compared to the same 14 consecutive days in 2020 or 2019. Given the comparison period for seasonal businesses is with a possible prior two years, you will need to demonstrate that the seasonal nature of your business makes it harder to meet the 40% revenue decline using the standard six weeks immediately prior to 17 August.
- The revenue calculation is exclusive of any COVID related subsidies/support that you may have received.
Like previous Wage Subsidy support, you are encouraged to take active steps to mitigate the impact of the move to Alert Level 4 on your business activities (including engaging with your bank, drawing on cash reserves, making insurance claims etc).
For the period that you receive the subsidy:
- You will retain the named employees for the period you receive the subsidy.
- Use the subsidy to support paying the ordinary wages of the employees for the period you receive the subsidy.
- You will use your best endeavours to pay at least 80% of each named employee’s ordinary wages or salary; and
- pay at least the full amount of the subsidy to each named employee; but
- where the ordinary wages or salary of a named employee as at 16 August 2021 is lawfully below the amount of the subsidy, pay the employee that amount.
- Repay any amount of the subsidy that is not required for these purposes.
Please note that you cannot apply for multiple subsidy payments, i.e., Leave Support Scheme plus Wage Subsidy for the same employee at the same time.
To apply please visit https://www.workandincome.govt.nz/covid-19/wage-subsidy/how-to-apply.html
Should the Government not extend the three-day lockdown period for New Zealand (excluding Auckland and Coromandel) it’s unlikely that most local businesses will have, or be likely to have a, 40% decline in revenue over the full 14-day period.
COVID-19 RESURGENCE SUPPORT PAYMENT (RSP)
Applications for the alert level increase announced on 17 August will open at 8am on 24 August.
The Resurgence Support Payment 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.
- Your business or organisation must have experienced at least a 30% drop in revenue or a 30% decline in capital-raising ability over a 7-day period (all within the increased alert level period), due to the increased COVID-19 alert level.
- Decrease in revenue or capital-raising ability is compared with a typical 7-day period in the six weeks prior to the increase from alert level 1.
- For highly seasonal businesses and organisations, the comparative revenue period should be a 7-day period that is at a similar point in the seasonal cycle for a year prior to the revenue drop.
- If the applicant is part of a commonly owned group this 30% decrease also needs to be satisfied across the group as a whole.
- Businesses and organisations (including sole traders) must have been in business for at least six months.
- The business or organisation must be considered viable and ongoing.
- Charities and not-for-profit organisations may be entitled to the RSP, provided they meet the other eligibility requirements.
- Income that is received passively – such as interest and dividends, and all forms of residential and commercial rent – is excluded from the measurement of revenue.
- Your business must be physically present in New Zealand.
- Applicants must be 18 years or older.
- Businesses and organisations (including sole traders) must have a New Zealand Business Number.
Eligible businesses or organisations can apply to receive the lesser of:
- $1,500 plus $400 per full-time equivalent employee (FTE), up to a maximum of 50 FTEs.
- Four times (4x) the actual revenue decline experienced by the applicant.
Calculations for this support payment must be based on what has happened, not a forecast of what might happen.
Please note that receiving any other Government COVID-19 support does not affect eligibility for the RSP.
This support payment is managed by the Inland Revenue and more information can be found at: https://www.ird.govt.nz/covid-19/business-and-organisations/resurgence-support-payment
The Short Term Absence Payment and Leave Support Scheme also remain in operation.
We will continue to keep you updated if there are any new COVID-19 financial announcements.
If you would like to discuss your eligibility for these support payments or need any assistance navigating this financial period, please reach out to our team – we’re here to help.