Government proposes Resurgence Support Payment to protect small business

13 January 2021

The New Zealand Government is planning to introduce a package to support businesses and individuals in case there is a change in COVID-19 alert levels due to a resurgence of the virus.

The proposed package, known as the Resurgence Support Payment, contains a one-off support payment which businesses can apply for through Inland Revenue. Features of the Resurgence Support Payment are:

  • Businesses can apply for a one-off payment of $1,500 plus a $400 payment per employee up to a total of 50 full-time equivalent employees.
  • Businesses will need to declare a drop of 30% or more in income over a 14-day period as a result of an increase from Alert Level 1 to Alert Level 2 or higher.
  • Businesses must have been in operation for at least six months in order to apply.

Deputy Prime Minister Grant Robertson commented the purpose of the new Resurgence Support Payment is “to help businesses directly affected when there’s a move to Alert Level 2 or above for a week or more.”[1]

He said, “This recognises that some businesses face one-off costs or impacts to cashflow when we step up an Alert Level to follow public health advice. The payment is structured to provide most support to smaller firms who are most likely to face cashflow issues but will be available to all businesses and sole traders.”[2]

It is expected that legislation containing the new Resurgence Support Payment measure will be introduced early 2021.

In addition, the Deputy Prime Minister confirmed the Government is committed to the Wage Subsidy Scheme and it will continue to be available if there’s a regional or national move to Alert Levels 3 or 4.

The Government is also keeping the Leave Support Scheme and adding to it by introducing a new short-term Absence Payment which will cover eligible workers needing to stay at home while awaiting a COVID-19 test result.

The short-term Absence Payment is a one-off payment to employers of $350 which they can use to pay workers who need to stay at home for one to three days while awaiting a test or while someone who is their dependent is doing so. The payment will be available in early 2021.

For more information on the support measures available to your business, please speak with your adviser or contact the Findex Tax Advisory team.

[1] https://www.beehive.govt.nz/release/govt-ready-back-business-if-there%E2%80%99s-covid-resurgence

[2] ibid

Disclaimer:

Findex NZ Limited, member of Findex Group Limited, trading as Findex

This document contains general information and is also not intended to constitute legal or taxation advice. If you need legal or taxation advice, we recommend you speak to a qualified adviser.

While all reasonable care is taken in the preparation of the material in this communication to the extent allowed by legislation Findex accept no liability whatsoever for reliance on it. All opinions, conclusions, forecasts or recommendations are reasonably held at the time of compilation but are subject to change without notice. Findex assumes no obligation to update this material after it has been issued. You should seek professional advice before acting on any material.

The information contained is of a general nature only and does not take into account your objectives, financial situation or needs. You should consider whether the information is suitable for you and your personal circumstances. Before you make any decisions in relations to a financial product, you should obtain and read the relevant Product Disclosure Statement or information. You should seek personal financial advice before acting on any material.

© Findex Group Limited 2020. All rights reserved