All about the new Resurgence Support Payments

On 16th February, NZ Finance Minister Grant Robertson announced the set up of New Resurgence Support Payment under urgency for any businesses affected by Covid-19.

Originally announced in December, this scheme has one minor change to the criteria since then - instead of 14 days, now the revenue drop of 7 days would be assessed. Grant Robertson said, “We acknowledge the concerns of the business community about Alert Level rises and have made this change as we want to get money out the door quickly to affected businesses.”

However, this support payment will come into effect only if there is an extension to a 72-hour increase in alert levels which will be announced on Sunday night, and if it does come into effect, it will cover the initial 72-hour alert level rise as well.

Businesses with a 30% drop in revenue over 7 day period would be eligible for the payment and this payment would include a per business rate of $1500 plus $400 per employee up to 50 full-time equivalent employees.

The payment was originally structured to provide support to smaller firms who would most likely face cashflow issues due to changes in alert levels but it is widely available for all businesses and sole traders.

In addition to this payment, there are more Government supports available:

• ShortTerm Absence Payment is a one-off $350 payment to employers to pay their workers who need to stay home while waiting on their Covid-19 test results or someone dependent on them is waiting for theirs following public health advice. Click here for more information on this.

• Leave Support Scheme is paid as a lump sum and covers two weeks per eligible employee at the rate of $585.80 per employee working 20 hours or more and $350 per employee working less than 20 hours a week to those businesses for their workers including self-employed workers who are told to self isolate due to Covid-19. Click here for more information on this.

• Wage Subsidy Scheme available nationally when there is a regional or national move to ALert levels 3 or 4 for a period of 7 days. The support is provided in two weekly payments for the duration of the alert level period, approximately 2 weeks. The Wage Subsidy Scheme has been successful at keeping people employed so far and has paid out more than $14 billion to protect 1.8 million jobs. Click here for more information on this.

• Other support includes Loans - Business Finance Guarantee Scheme which is available till June 2021 and Small Business Cashflow Scheme.

Eligibility criteria for Short-Term Absence Payment - Resurgence Support Payment (RSP)

• Eligible Businesses will be able to apply from next Tuesday, 23rd February 2021.

• Businesses must have experienced at least a 30% drop in revenue or 30% decline in capital-raising ability over a 7-day period at the raised alert level compared with a typical 7-day revenue period in the 6 weeks before the increase from alert level 1 or if a seasonal business - the similar period over last year.

• Tax agents can apply for the RSP on behalf of their clients if they have the authority to apply and hold a record of that authority.

• Businesses and organisations (including sole traders) must have been in business for at least 6 months.

• Applicants (including sole traders and trustees) must be at least 18 years old at the time of application.

• The business or organisation must be considered viable and ongoing.

• Businesses or organisations with common ownership (commonly owned groups) must apply as one group and the revenue drop test is measured across the group as a whole. If the group meets the revenue drop test, and the other eligibility criteria, it would be entitled to a single payment based on the number of employees in the whole group (max. 50 FTE).

• Charities and not-for-profit organisations may be entitled to the RSP, provided they meet the other eligibility requirements including that they are a viable, ongoing organisation.

• State sector organisations are excluded from the RSP but can apply to the Minister of Finance for an exemption to apply for the scheme.

• Income that is received passively – such as interest and dividends, and all forms of residential and commercial rent – is excluded from the measurement of revenue.

Note: Receiving any other Government COVID-19 support does not affect eligibility for the RSP.

Resurgence Support Payment calculator - CLICK HERE

For all other information regarding Calculating your Revenue Drop, Amount you may be eligible for, seasonal business or organisation, pre-revenue business or organisation, group of companies with common ownership - CLICK HERE

Applying for the Resurgence Support Payment (RSP) - CLICK HERE

Receiving the Resurgence Support Payment (RSP) - CLICK HERE

Source - IRD