Government Extends Financial Support for Businesses
The Delta outbreak is still far from over and higher alert level restrictions remain in place across the country. Accordingly, the Government has extended the financial support available to businesses who are facing financial difficulties as a result of the outbreak and the measures taken to control it. Here we outline the government assistance schemes that have been extended.
The Resurgence Support Payment
The Resurgence Support Payment is a one-off payment available to businesses that experience a 30% drop in revenue over a seven-day period due to the increased Alert Level (Level 2 or higher).
The RSP was initially only available to businesses that had been operating for at least six months prior to the alert level change. However, the Government has announced that from 9 September businesses will only need to have been in business for one month prior to the change to be eligible.
Eligible businesses will be able to receive $1,500.00 plus $400.00 per full-time-equivalent employee, up to a maximum of 50 employees. However, the payment will be capped at four times the actual revenue loss.
The Wage Subsidy
The Wage Subsidy is a payment to eligible businesses, organisations and the self-employed to help pay staff and protect jobs.
As of Friday 3 September, applications for a second round of the wage subsidy are now open. Eligible businesses that applied for the wage subsidy in the initial two-week period can apply two weeks after the previous application. Work and Income will email businesses to let them know when to apply and won’t accept early applications. Those that did not apply in the initial two-week period can still apply for the second round from 3 September.
A business seeking the second wage subsidy must declare that it has had or is expecting a decline in revenue attributable to the alert level (Level 3 or 4) of at least 40% over 14 consecutive days between 31 August and 13 September, compared to a typical 14 consecutive days in the six weeks prior to the initial alert level change on 17 August or over the same 14 day period in 2020 or 2019 for seasonal businesses.
To be eligible for the wage subsidy a business must also not be receiving payment under the Short-term Absence Payment or Leave Support Scheme in respect of any employees named in the application.
The Wage Subsidy is paid out at $600 per week per full-time employee and $359 per week per part-time employee.
Many New Zealand businesses are struggling due to the restrictions of Alert Levels 3 and 4. Hopefully the extended government assistance schemes will help those businesses get through to the other side.
For more information see https://www.business.govt.nz/covid-19/financial-support-for-businesses/.