WAGE SUBSIDY SCHEME
The Government wage subsidies start again if New Zealand or any region within NZ moves back to alert level 3 or 4 for a period of 7 days or more. The subsidy is paid at the rate of $585.80 a week for each full-time employee and $350 per part time employee. These are the same subsidy rates which were paid during the lockdowns in 2020.
To qualify, the business needs to be able to demonstrate a 40% decline in revenue based on fortnightly revenues, compared to revenue levels during the 6-week period immediately preceding the lockdown. This has changed from the calculation that was used for claiming the subsidy in 2020.
The eligibility requirements for the subsidy are the same as are the rules regarding keeping workers employed.
RESURGENCE SUPPORT PAYMENT (RSP)
In addition to the wage subsidy, there is a new support package which applies if there is a move back to level 2 or above. This support is to help businesses cover expenses such as wages and fixed costs.
When the Government activates the RSP, applications will open 7 days after the alert level increase and remain open for applications for one month after the return to alert level 1.
This support is in the form of a one-off cash grant which will be the lesser of:
- $1,500 plus $400 per FTE employee, up to a maximum of 50 FTEs; or
- Four times the actual revenue drop experienced by the applicant.
To be eligible for the RSP, a business or organisation must have experienced at least a 30% decline in revenue over a 7-day period after the increased alert level (you can choose when the 7-day period starts but the entire 7 days must occur during the increased alert level period) compared with a typical 7-day period in the 6 weeks prior to the increase from alert level 1. There are some additional eligibility criteria and you can get full details on the RSP from the IRD website by clicking on this link here .
The Government has activated the RSP for the 15 February 2021 change in alert levels and the IRD have advised that applications will be available from 23 February 2021.
SHORT TERM ABSENCE PAYMENT
From 9 February 2021, the COVID-19 Short Term Absence Payment is available for businesses, including self-employed people, to help pay their workers who cannot work from home while they wait for a COVID-19 test result. This is a one-off payment of $350 per eligible employee and you can only apply for it once, for each eligible worker in any 30-day period (unless a health official or doctor instructs the employee to get another test). This payment is available at all alert levels and is in addition to the existing Leave Support Scheme.
If you have any COVID-19 related issues in your business or need support with determining your eligibility for support, get in touch with the team at your local SBA.
SMALL BUSINESS CASHFLOW SCHEME CHANGES
The government has changed the rules of the small business cashflow scheme (sbcs) to extend it’s availability and tweak the scheme to bring the conditions in line with the promises made during the election. the key changes are:
Applications for the scheme will now remain open until 31 December 2023.
The loans will now be interest free for 2 years (increased from 1 year).
Restrictions on how the loan can be used have eased. as well as spending on core operating costs, you can now also choose to use the loan to invest in your business.
Changes to eligibility criteria, specifically around when the business was established, the decline in revenue test, employee number test and re-borrowing.
These changes came into effect on 28 January 2021 and apply to loans that have already been drawn down.