THIS POST HAS BEEN UPDATED TO REFLECT THE PROVISIONS IN THE BILL INTRODUCED AND PASSED BY THE GOVERNMENT UNDER URGENCY ON 16 FEBRUARY 2021.
It’s been a while since we had any significant COVID support changes, but with the recent Northland community case of COVID we thought that it would be worth highlighting what support is available if there is a resurgence of COVID in NZ.
Wage Subsidy Scheme
The Government has announced that wage subsidies would start again if the country, or any region, moves back to alert level 3 or 4 for a period of 7 days or more. The subsidy would be payable at the rate of $585.80 a week for each full time employee and $350 per part time employee which is the same level as was paid in 2020.
To qualify for the subsidy 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 is a change to the calculation basis which was used for the subsidy in 2020.
The evidence requirements to support eligibility for the subsidy are the same and the same rules apply regarding keeping workers employed.
Resurgence Support Payment (RSP)
In addition to the wage subsidy, there will be a new support package which will apply 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 be in 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 here at the IRD.
The Government has activated the RSP for the 15 February 2021 change in alert levels and 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 tells the employee to get another test). This payment is available at all alert levels and is in addition to the existing Leave Support Scheme.
The legislation for the new support has not been passed by Parliament yet but Finance Minister Grant Robertson has confirmed that this would be legislated retrospectively if the support was required earlier.
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 Thrive CA and we’ll get you sorted.