The Government is offering assistance to businesses with five schemes:
The Wage Subsidy August 2021, Leave Support Payment and Short-Term Absence Payment are administered by the Ministry of Social Development and can be applied for via Work and Income. Both the Resurgence Support Payment and Small Business Cash Flow Schemes are administered by the Inland Revenue, which you can access by logging into your MyIR.
You are entitled to apply for support administered by the Ministry of Social Development under more than one scheme, however, you cannot apply for the same person under more than one support payment at a time. Receiving any other Government COVID-19 support, however, does not affect eligibility for the Resurgence Support Payment, which is administered by the Inland Revenue.
Find below some of the key points to be aware of under each scheme.
Wage Subsidy August 2021
- The amount you receive is $600 for full-time employees.
- The amount you receive is $359 for part-time employees.
- Applications opened 20 August 2021.
- Applications usually remain open for up to a month.
- There is an extensive declaration form that has to be signed.
- You need to have had at least a 40% decline in income (exclusive of any COVID-19 subsidy payments) over the period 17 August 2021 to 30 August 2021 inclusive, when compared with a typical 14-day consecutive period of revenue in the six weeks immediately prior to 17 August 2021. There is a special rule for those who have high seasonal revenue.
- You need to get the consent of your employees, preferably in writing, to provide information to the Ministry of Social Development.
- Don’t forget to advise your named employees that they can request access to the information you have provided in your application.
- If you receive money under this scheme and you don’t meet or, subsequent to the application, do not meet the criteria, such as a sales drop of at least 40%, and your actual sales turn out to be less than a 40% decline, you have to repay the money.
- You can be prosecuted if you receive any subsidy or part of the subsidy that you were not entitled to receive, including where any predicted decline in revenue for the relevant period is not realised. Accordingly, you can expect that the Ministry of Social Development will be carrying out audits.
IMPORTANT POINT
We quote directly from the declaration:
“Before making this declaration, you have taken active steps to mitigate the impact of the move to Alert Level 4 on 17 August 2021 on your business activities (including but not limited to engaging with your bank, drawing on your cash reserves as appropriate, making an insurance claim).”
It would seem you may not be permitted to claim the subsidy if you have sufficient funds or can raise sufficient funds to meet your wage payments. Note the use of the words “as appropriate”. If you have money set aside for tax, for example, would it be appropriate to use the money to pay wages? Probably not. Further to this, you may be entitled to reserve money for your normal personal drawings and for your business expenses. Also note that “engaging with your bank” may include making sure your business is viable before you make a claim for the subsidy.
WHEN YOU APPLY FOR THE SUBSIDY
READ ALL THE DETAILS
Full details on the Work and Income website.
Resurgence Support Payment
- If your business or organisation has had at least a 30% drop in revenue over a seven-day period due to an increased COVID-19 alert level, you can apply for this payment.
- The amount you receive under this scheme is $1,500 plus $400 per full-time equivalent employee up to a maximum of 50 full-time equivalent employees or four times the actual revenue decline, whichever is the lesser.
- If you are a GST-registered business, you need to return GST on payments received under the Resurgence Support Payment. You are able to claim input tax deductions for expenditure funded by payments under the Resurgence Support Payment.
- The Resurgence Support Payment must be used to cover business expenses such as wages and fixed costs.
- Applications for this support opened at 8am on 24 August.
- The Government could activate this scheme multiple times if there are multiple alert levels so watch out for this possibility.
- Follow this link to get more details. You will find the process of applying for the payment is on the last line of the page and it will lead you through to the Inland Revenue website.
- Details of your reduction in revenue needs to be detailed in your application form. For assistance on this process or the details of what you need to input, please get in contact with one of our Client Managers.
Leave Support Scheme
- This scheme is for employees who have been required to self-isolate or for employees who are parents and caregivers of a dependent who have been required to self-isolate.
- This link will take you to the criteria which must be met in order to make a claim and also to a list of the type of employees who are not covered by the scheme.
- This payment is a two-week lump sum amount paid per eligible employee at the rate of $600 a week for full-time employees who work 20 hours or more a week. The amount for part-time workers is $359 per week.
Short-Term Absence Payment
As an employer, you are eligible for this scheme to help you keep paying employees who cannot work from home and need to miss work to stay home while waiting for a COVID-19 test result.
- You are able to receive a one-off payment of $350 for each eligible worker.
- If you require more details please click here.
- Self-employed people can also apply.
Small Business Cash Flow Scheme
- This scheme has been in existence for some time and is open at this stage until December 2023.
- If you have repaid your loan, you may be able to borrow again.
- Click on this link for more details.
