August 2021: Level 4 Lockdown Update #1

Posted on 18 Aug 2021

We know each lockdown affects each person and business differently. Depending on your situation the following government support may help you:

The Wage Subsidy

Employers can apply for this support if you expect a loss of 40% of revenue as a result of the alert level increase. It is intended to be used to pay wages to your employees and protect jobs affected by the move to the new alert level announced on August 17th.? The amounts have increased to $600/per week for a full time equivalent employee and $359/per week for a part-time employee. The criteria is similar to previous subsidies:

• Approval from your employees to claim the subsidy on their behalf and provide their details to MSD/WINZ
• A 40% decline in actual or predicted revenue for the subsidy period (if you predict a reduction of 40% but it turns out to be less once the period has passed you will need to repay the subsidy)
• For the period you receive the subsidy, you will:
• use your best endeavours to pay atleast 80 per cent of each named employee's ordinary wages or salary; and
• pay at least the full amount of the subsidy to each named employee; but
• where the ordinary wages or salary of the named employee as at 16 August 2021 is lawfully below the amount of the subsidy, pay the employee that amount.
• Have taken steps to mitigate the risk of Covid-19 on your business.

Applications open Friday 20^th August 2021 via the Work and Income website and will initially be open for 2 weeks.

Resurgence Support Payment

This support covers costs other than wages due to a move to level 2 or higher. The current payment rates are a base payment of $1500, plus $400 per employee up to a maximum of 50 employees. It is important to know that if you are eligible you can use both of these. You can apply from Tuesday 24th August via the IRD website. There is more detail to come but the main criteria is:

• Your business or organisation must have experienced at least a 30% drop in revenue or a 30% decline in capital-raising ability over a 7-day period as a result of the alert level increase (Please take note of the need for having already experienced the decline - if you aren't eligible just yet, please wait until you are before applying).
• You must have been in business for at least 6 months.
• The business needs to be considered viable and ongoing.
• You must have a New Zealand Business Number.

Applications can be made from your myIR account. To apply, log in to your business myIR and go to "I want to" in the top right-hand corner and click "More". Under the "Covid-19 Support" section, there should be the option to apply for the Resurgence Support Payment.

The Short-term absence payment

The COVID-19 Short-Term Absence Payment is available for businesses, including self-employed people, to help pay their workers who cannot work from home while they wait for a COVID-19 test result. It's to help businesses keep paying eligible workers who:

• cannot work from home, and
• need to miss work to stay home while waiting for a COVID-19 test result (in line with public health guidance).

There's a one-off payment of $350 for each eligible worker. You can only apply for it once, for each eligible worker, in any 30-day period (unless a health official or doctor tells the worker to get another test). It's also available to self-employed workers. Note: You cannot get more than one Covid-19 payment for the same employee at the same time from MSD/WINZ - so if receiving the Wage Subsidy for this employee you may not be eligible for this payment. Applications for the Short-term absence payment can be done here.

The Leave Support Scheme

The COVID-19 Leave Support Scheme is available for employers, including self-employed people, to help pay their employees who need to self-isolate and can't work from home. This means your workers:

• can't come into work because they are in one of the affected groups and have been told to self-isolate, and
• can't work from home.

Note: You cannot get more than one Covid-19 payment for the same employee at the same time from MSD/WINZ - so if receiving the Wage Subsidy for this employee you may not be eligible for this payment. More details and how to apply for the Leave Support Scheme can be found here.

Small Business Cash Flow Loan

Government will provide loans to small businesses, including sole traders and the self-employed, impacted by COVID-19 to support their cash flow needs. If you've previously applied for a SBCS and have fully repaid it, you can apply again. Applications are open until 31 December 2023. You can apply through myIR. The small business cash flow loan scheme will provide assistance of up to a maximum of $100,000 to businesses employing 50 or fewer full-time employees.?This includes sole traders and self-employed businesses. Details of the loans include:

• $10,000 to be provided to eligible businesses
• an additional $1800 per equivalent full-time employee
• interest free if the loan is paid back within two years
• an interest rate of 3% for a maximum term of five years
• repayments not required for the first two years
• you must show at least a 30% drop in revenue due to Covid-19, measured over a 14-day period in the past six months compared with the same 14-day period a year ago. If your revenue from the same period a year ago was also affected by COVID-19, compare the same 14-day period two years ago.
• maximum amount you can borrow depends on the number of full-time and part-time employees.

Use the small business cash flow loan scheme eligibility tool here and find out how to apply. We'll send out further information via email, on our blog, and through our social media channels when relevant information needs to be communicated.? It's also important to note that if you apply for assistance and then find you are not eligible, you can pay it back.? You can also follow these websites for up to date information: https://covid19.govt.nz/ Ministry of Health guidelines. Work and Income MSD website The Covid-19 website outlines all the financial support available. As always, if you need to reach any of our team please do so via direct email or phone. Take care, and stay safe.