Lockdown Levels – What Support is Available
Going into immediate Lockdown can be hugely unsettling, but I must say, nowhere near as hard as the March 2020 was. We have been here before, and I think that brings with it a sense of calmness, open mindedness and understanding of what is expected and what it is going to look like.
What is hugely frustrating is assimilating the massive amount of information out there and sorting out the truths amongst the myths. As such, we have listed as much information as we presently have on hand at the moment in the hope of making some sense of what support is available to you at this time. We will update this blog as more information comes to light.
Business and Alert Levels
For the latest information on life at Alert Levels – Alert Levels | Unite against COVID-19 (covid19.govt.nz)
For information relating to businesses and who can operate at Alert Level 4 – Doing business at Alert Level 4 | Unite against COVID-19 (covid19.govt.nz)
For information relating to businesses and who can operate at Alert Level 3- Doing business at Alert Level 3 | Unite against COVID-19 (covid19.govt.nz)
For information relating to businesses and who can operate at Alert Level 2 – Doing business at Alert Level 2 | Unite against COVID-19 (covid19.govt.nz
For financial support Financial support for businesses | Unite against COVID-19 (covid19.govt.nz)
There is a financial support tool available to see what support you are eligible for here COVID-19 financial support tool | Unite against COVID-19 (covid19.govt.nz)
The Government has announced that a wage subsidy will be available to businesses impacted by New Zealand moving to COVID-19 Alert Level 4 on 17 August 2021. It will be available to all New Zealand businesses and self-employed people that meet eligibility criteria. The wage subsidy is there to support employers to pay their staff and prevent staff having to use their leave while in lockdown.
Businesses will be eligible for $600 per week per full-time employee and $359 per week per part-time employee.
Any business in the country can apply for the subsidy if they anticipate they will experience a 40 percent loss of revenue due to alert levels.
You must also meet the eligibility criteria. Who can get the COVID-19 Wage Subsidy August 2021 – Work and Income
WHO CAN GET IT
To get the COVID-19 Wage Subsidy August 2021 you must:
- operate a business in New Zealand that employs and pay the employees named in your application, and
- meet the revenue decline test set out in the declaration, and
- meet the other eligibility criteria set out in the declaration
- you must prepare and retain evidence of the 40% drop in revenue for the period 17 – 30 August in comparison to a regular 14 day period within the previous 6 weeks (6 July to 16 August).
This is the information they check when you apply. What we check before we pay the COVID-19 Wage Subsidy August 2021 – Work and Income
The declaration lists all the eligibility criteria in full, and you need to agree to this when you apply. You must meet all these criteria to get the COVID-19 Wage Subsidy August 2021. The declaration is available on the website along with the application details.
Resurgence Support Payments (RSP)
Businesses can also apply for the RSP if they qualify.
ELIGIBILITY – A 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 in relation to a regular 7 day period in the last six weeks, due to the increased COVID-19 alert level. All information on the eligibility can be found here on IR website Eligibility for the Resurgence Support Payment (RSP) (ird.govt.nz)
PAYMENT – The maximum size of the payment your business or organisation may be eligible for is depended on the number of full-time equivalent employees (FTEs) you have, and your level of revenue.
The RSP is calculated as $1,500 plus $400 per FTE (up to 50 FTE). The maximum payment is $21,500. Sole traders can receive a payment of up to $1,900.
- Employees working up to 20 hours per week are considered part time (0.6 FTE)
- Employees working 20 hours or more per week are considered fulltime (1.0 FTE)
Businesses with low revenue will have their payment capped at four times (4x) the amount their revenue has dropped over the 7-day period. For example, if your business has 3 FTEs, they would be entitled to $2,700. However, if their revenue drop was $500, their RSP payment would be limited to $2,000.
APPLICATION – To apply for the Resurgence Support Payment, you need to confirm your eligibility, gather the information needed (NZBN number, Employee details, bank account number, revenue details) and apply via MyIR on the IR website.
All the information can be found here: Apply for the Resurgence Support Payment (RSP) (ird.govt.nz)
COVID-19 Short-term Absence Payment
This is available for businesses, including self-employed people, to help pay employees who cannot work from home while they wait at home for a COVID-19 test result. This is a one-off payment of $350. You can find the details here.
COVID-19 Leave Support Scheme
The Leave Support Scheme is available for businesses, including self-employed people, to help pay their workers who can’t work from home and meet certain health criteria, eg they have COVID-19 or are a ‘close contact’ who has been told to self-isolate for 14 days.
The Leave Support Scheme is paid as a 2-week lump sum per eligible employee.
The Leave Support Scheme is paid at a flat rate of:
- $585.80 a week for full-time workers who were working 20 hours or more a week
- $350 a week for part-time workers who were working less than 20 hours a week.
Find out more about the Leave Support Scheme here.
Small Business Cashflow Scheme Extended Until 2023
The Small Business Cashflow (loan) Scheme has been extended until 31 December 2023.
Organisations and small to medium businesses, including sole traders and the self-employed, may be eligible for a one-off loan with a term of 5 years if they have been adversely affected by COVID-19.
The maximum amount loaned is $10,000 plus $1,800 per full-time-equivalent employee. The annual interest rate will be 3% beginning from the date of the loan being provided. Interest will not be charged if the loan is fully paid back within 2 years.
You can find out more here, or simply get in touch with us so we can provide our professional assistance.
Business Debt Hibernation Scheme
Business debt hibernation is a government initiative created in response to COVID-19. It helps companies, trusts, and other business entities affected by COVID-19 to manage their debts. Applications are open until 31 October 2021.
If business debt hibernation is right for your business, this is how it helps you manage your debts:
- You set up an arrangement for your existing debts, eg paying your creditors only a percentage of what you owe them on time and delaying the rest.
- You get up to a month of protection while you set up the arrangement, meaning most creditors can’t enforce their debts, eg applying for your business to be liquidated.
- If your creditors agree, you get a further six months of protection.
Use the business debt hibernation decision tool to find out if it’s a good option for your business and if so, how to get started.
Tax and implications
Information on the IR website regarding tax and other implications for businesses. COVID-19 Business and organisations (ird.govt.nz)
Kiwi Business Boost Tool
The Government has funded specialist consultancy support services to provide advice to businesses who need it. You can use the Kiwi Business Boost Tool to find out what services are available in your region.
Training Incentive Allowance to Support 16,000 Kiwis
The government is bringing back the Training Incentive Allowance to support 16,000 New Zealanders to retrain and gain higher skills. An investment of $127 million will be given over four years from the COVID-19 Recovery and Response Fund to reinstate this program.
As always, we care and we are here to help if possible. Contact us