Covid-19 Alert 4 Support for Businesses

New Zealand is again at Alert Level 4, following a recent Covid-19 Delta outbreak. We have summarised Government Support for businesses and contractors below.

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Wage Subsidy Scheme (WSS)

Eligible employers anywhere in the country can apply for the WSS if they expect a loss of 40 percent of revenue as a result of the Alert Level increase announced on 17 August 2021. The WSS rates have been increased to reflect the increase in wage costs since the scheme was first used in March 2020. Businesses will be eligible for $600 per week per full-time equivalent employee, and $359 per week per part-time employee. The WSS will be paid as a two-week lump sum. Applications open on Friday 20 August with the first payments usually available after three days.

Further information will be available on the MSD website shortly https://www.workandincome.govt.nz/covid-19/index.html

Resurgence Support Payment (RSP)

The RSP is available if a business incurs a drop of 30 percent in revenue over 7 days, compared with 7 days in the last 6 weeks as a result of the Alert Level increase. The RSP is worth up to $1,500 plus $400 per full-time equivalent employee, up to a maximum of 50 full-time employees (ie a maximum of $21,500).

For commonly owned groups, the whole group needs to be eligible before each entity can claim the RSP. Further information is available here.

Leave Support Scheme (LSS)

The LSS provides a two-week lump sum payment of either $585.80 per week for full-time workers, or $350 per week for part-time workers, who must self-isolate and cannot work from home. More information is available here.

Short-Term Absence Payment (STAP)

The STAP provides a one-off (once per 30 days) $350 payment for workers who must miss work due to a COVID-19 test and cannot work from home. Further information is available on the MSD website.

Are there eligibility checks?

Yes, MSD do run spot checks to ensure that income drops have been calculated correctly and you have listed current employees correctly. If you are in the process of restructuring, don't claim for employees who are being made redundant.

IRD has also been routinely checking 2021 personal income tax returns to verify that the self-employed and contractors have been declaring their wage subsidies and/or resurgence support payments in their income tax returns.

Please contact us at JDW if you require any assistance on calculating eligibility or making applications.

-          Serena Irving

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Serena Irving is a director in JDW Chartered Accountants Limited, Ellerslie, Auckland. JDW is a professional team of qualified accountants, auditors, business consultants, tax advisors, trust and business valuation specialists.

A well-written article like this, which is general in nature, is no substitute for specific tax advice. If you want more information about the issues in this article, please contact the author.