Details on the government support package and how to apply.
Economic response package and eligibility
Government support for businesses affected by COVID-19 currently includes:
- wage subsidy scheme
- leave and self-isolation support
- business cash flow and tax measures
- business finance support loan and mortgage holidays
- wider $12.1 billion package.
Guidance for wage and leave support applications
Guidance to help businesses, including employers and the self-employed, understand their eligibility for the wage and leave support packages is under development.
Take your time when determining your eligibility and making your application. Taking your time now to get it right will ensure you receive all the support you’re entitled to.
Wage subsidy scheme
A further update to the wage subsidy scheme was announced on 23 March 2020. We expect further announcements this week.
There is no cap on the number of staff you can apply to support. This is to enable more support for workers in medium and large sized businesses.
Tools and resources will become available this week to support you in documenting loss of revenue, to help you apply for the Wage Subsidy scheme. If you are uncertain about your revenue we encourage you to wait for these tools before you apply.
Wage subsidies will be available for businesses significantly impacted by COVID-19 including:
- employers that are struggling to retain employees
- sole traders
- existing businesses
- registered charities
- non-government organisations
- incorporated societies
- post settlement governance entities
- new businesses less than a year old.
For businesses older than 12 months old wage subsidies will be available for those who can show a 30% decline in revenue, attributable to COVID-19, for any four weeks between January and June 2020 compared to the year before. This includes forecasting future months.
For businesses less than 12 months old the wage subsidy will be available for those who can show a 30% decline in revenue, attributable to COVID-19, against a similar time period (ie 30% loss of income when comparing January 2020 to March 2020).
Businesses that have had a significant increase in revenue over the past year are eligible, where they can show a 30% decline in revenue, attributable to COVID-19, against a similar time period (ie 30% loss of income when comparing January 2020 to March 2020).
People who are self-employed and have variable monthly incomes are eligible if they can show a 30% decline in revenue, attributable to COVID-19, against the previous years’ monthly average (ie 30% loss of income comparing March 2020 to the average monthly income in the period March 2019 to March 2020).
The subsidy is for 12 weeks. It is:
- $585.80 per week for a full-time employee (20 hrs or more)
- $350.00 per week for a part-time employee (less than 20 hrs).
The payment will be made as a lump sum. This means employers will receive a payment of $7,029.60 for a full time employee and $4,200 for a part time employee.
More information on who qualifies for the wage subsidy, definitions for wage subsidy qualifications, and how to apply, can be found from Work and Income. You may also need a New Zealand Business Number (NZBN) to apply.
Leave and self-isolation support
Workers and businesses have responsibilities to prevent the spread of COVID-19. The purpose of the COVID-19 leave and self-isolation scheme is to support workers financially to self-isolate, or while ill with COVID-19.
From 17 March 2020, the COVID-19 leave payment will be available to support people financially if they cannot work from home and:
- need to self-isolate
- can’t work because they are sick with COVID-19
- can’t work because they are caring for dependents who are required to self-isolate or who are sick with COVID-19.
The payments will be:
- $585.80 per week for a full-time worker
- $350 per week for a part-time worker.
The COVID-19 leave payment will be available for eight weeks from 17 March 2020. Employers will be able to apply for this more than once.
This is subject to change as we move to COVID-19 Alert Level 4 and we expect further announcements this week. More information on who qualifies for the leave payment, and how to apply, can be found from Work and Income. You may also need a New Zealand Business Number (NZBN) to apply.
Business cash flow and tax measures
There are a number of business cash flow and tax measures that have been announced, including:
- Giving Inland Revenue the discretion to remit use-of-money interest (UOMI) for customers significantly adversely affected by COVID-19.
- Increasing the provisional tax threshold from $2,500 to $5,000 from 2020/2021.
- Increasing the small asset depreciation threshold from $500 to $1,000 — and to $5,000 for the 2020/21 tax year.
- Allowing depreciation on commercial and industrial buildings from 2020/2021.
- Removing the hours test from the In-Work Tax Credit (IWTC) from 1 July 2020.
More information on the business cash flow and tax measures can be found from Inland Revenue.
COVID-19 tax relief — Inland Revenue
Wider $12.1 billion package
There are further parts to the wider $12.1 billion package that you may be interested in, including income support and further investment in the health response.
Source: business.govt.nz - updated 26 March