PKF Francis Aickin Limited, Far North, New Zealand
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11 Mar 2021
Covid-19 resurgence support payment
Businesses which suffered a 30% fall in income due to the change in alert level may be entitled to the resurgence support payment. This payment is the lesser of the $1500 base plus $400 per full time employee or four times the lost turnover.
Businesses applying need to compare a seven-day period income, typically the week ended 6 March 2021, with a similar seven-day period in the six weeks before the alert change. For the latest lockdown this is a one-week period from 15 January – 28 February.
However, seasonal businesses can compare a similar week period in the last year.
For example, as treasurer of Doubtless Bay Promotions, I thought I could claim the resurgence support payment for cancellation of the Mangonui Waterfront Festival. Turnover for the festival week is more than 90% down on last year due to the Covid-19 alert level changes. The $1500 would reduce the loss we will incur this year. Unfortunately, when I tried to apply, the system would not let me as the Festival is not registered as an employer. I have queried this with the IRD as their eligibility requirements do not state you have to be an employer. The IRD are going back to their legal team to clarify the rules, as this potentially effects many events which were cancelled last week due to the change in COVID alert levels.
There is a bit more formality about claiming the resurgence support payment. Businesses need to claim this through the IRD using their My IR login. They will need to record the turnover figure for the seven days during the lockdown period and details of the comparative period. The system will then confirm if there has been a fall of more than 30% and if so, calculate the amount of your resurgence payment.
Covid-19 March 2021 Wage subsidy
If a business is entitled to claim the resurgence support payment, they may also qualify for the wage subsidy.
Care needs to be taken as the criteria is different to previous subsidies.
To qualify, a business must either have or expect a 40% decline in turnover over a consecutive 14-day period from 28 February – 21 March, compared against a consecutive 14-day period, six weeks before the alert change.
Highly seasonal businesses can compare the 14-day period against the same period in 2020 - and if they were some of the first businesses to be affected by COVID in 2020, then back to 2019.
The wage subsidy is for two weeks and is the same amount as last year - $585.80 per week for employees working 20 hours or more and $350 per week for part-timers.
Businesses apply for the wage subsidy through MSD, using the same forms as last year.
Covid-19 other support
There is still other support available as we detailed in our article last month. These include Leave Support Scheme, Short-Term Absence Payment, Small Business Cashflow Loan Scheme, and the Business Finance Guarantee Scheme.
Remember - these are taxpayer funded subsidies and any data provided in the applications may be subject to audit and records must be maintained to substantiate that you meet the eligibility criteria.
Use your business/tax advisor to assist your understanding of options available for your business and interpretation of the criteria for support claims.
For more information on how we can help your business, get in touch