New Zealand
23 February 2021 | Minutes to read: 2

COVID-19: Government support payments available for businesses and organisations

By William Buck

Applications are now open for the Resurgence Support Payment.

On 17 February, the Prime Minister announced the new Resurgence Support Payment would be made available to businesses and organisations with reduced revenue due to the latest changes in COVID-19 Alert Levels.

The Resurgence Support Payment is part of the Government’s COVID-19 support initiatives to help businesses cover expenses such as wages and fixed costs.

Resurgence Support Payment (RSP)

The new Resurgence Support Payment will be available to eligible businesses now that Auckland has been in Level 2 and above for seven days. This means businesses can access the RSP if they meet eligibility criteria.

To qualify for the payment businesses must show a 30 percent drop in revenue over a 7-day period compared with a typical revenue period in the 6 weeks prior to the Alert Level rise.

If it is a seasonal business applying, they must show a 30 percent revenue drop compared with a similar week the previous year.

Charities and not-for-profit organisations may be entitled to receive the RSP if they also meet other eligibility requirements, including being a viable, ongoing organisation.

The payment is available to businesses nationally if they meet the eligibility criteria. This recognises that businesses around the country may have their revenue affected by Auckland being at increased alert levels.

Eligible businesses and organisations can apply to receive the lesser of:

— $1500 plus $400 per full time employee up to a maximum of 50 FTEs ($21,500), or
— Four times the actual drop in revenue experienced by the applicant.

Businesses can apply for the RSP from Tuesday 23 February through myIR. Applications close 22 March 2021.

The Government will announce whether the RSP will be activated each time the alert level is increased from level 1. Businesses and organisations can apply for the payment each time it is activated if they meet the eligibility criteria.

RSP and Tax

Payments received under the RSP will not be subject to income tax, and expenditure funded by payments under the RSP is not deductible.

GST-registered businesses will be required to return GST on payments received under the RSP. These businesses can claim input tax deductions for expenditure funded by payments under the RSP.

Further information on the RSP is available on the Inland Revenue website here.

Other support payments

Additional Government COVID-19 financial support is also available to eligible businesses, employers and self-employed workers. These support payments are available through Work and Income.

The COVID-19 Short-Term Absence Payment is for businesses, including self-employed people, to help pay their workers who cannot work from home but need to stay home while they or their dependents wait for a COVID-19 test result.

The COVID-19 Leave Support Scheme is available to help businesses pay employees who have been told to self-isolate because of COVID-19, and cannot work from home. This includes parents and caregivers who need to miss work to support their dependents who have been told to self-isolate.

How we can help

We continue to support our clients through this challenging period with key business and tax advice to answer their business-related questions and guide them through the COVID-19 financial support measures. Updates on government assistance and how we can help your business respond can be found on our Resource Page.

Should you need any additional support, please contact your local William Buck advisor – we’re here to help.

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