COVID-19 Wage Subsidy August 2021 and Resurgence Support payment
Details on applying for the Wage Subsidy and Resurgence Support Payments (RSP) have now been released. Wage Subsidy August 2021 The Wage Subsidy is a payment to support employers, so they can continue to pay employees and protect jobs for businesses affected by the move to Alert Level 4 on 17 August 2021. The Wage Subsidy August 2021 will cover a two-week period at the rate of:
$600 a week for each full-time employee retained (20 hours a week or more)
$359 a week for each part-time employee retained (less than 20 hours a week).
To be eligible for the Wage Subsidy you must meet the revenue decline test and meet other eligibility criteria set out in the declaration. The declaration lists all the eligibility criteria in full, and you need to agree to this when you apply. Note: You must meet all these criteria to get the COVID-19 Wage Subsidy August 2021. There will be a link to the application form (and the declaration) available via this link from 9am on Friday 20 August 2021, and applications will be open for two weeks. If the lockdown is extended, they will open up an Wage Subsidy Extension and you will need to reapply for the wage subsidy. The Leave Support Scheme and the Short-Term Absence Payment are also available (Employers cannot get the COVID-19 Wage Subsidy August 2021 and Leave Support Scheme simultaneously for the same employee, at the same time). Resurgence Support Payment (RSP) The Resurgence Support Payment is a payment for the purpose of general overheads. Eligibility A 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, due to the increased COVID-19 alert level (subject to all other criteria being met - Click here for Eligibility Criteria). This decrease in revenue or capital-raising ability is compared with a typical 7-day revenue period in the 6 weeks prior to the increase from alert level 1. Start date When applying for the RSP, the start date of the 7-day period where your business or organisation has experienced a drop in revenue is the date the increase in the alert level started.
If the increase in alert levels lasts for more than 7 days, you can choose a different start date for the 7-day period where your business or organisation has experienced a drop in revenue. The total 7-day period must be within the increased alert level period.
Calculating your drop in revenue
Revenue refers to income generating activity by a business or organisation. Standard accounting principles relating to income recognition apply.
For a cashflow business, such as a restaurant, this is likely to be the daily takings.
For a business that invoices clients, this will be the activities the business carries out that would entitle it to bill or invoice either immediately or at a later date.
To calculate affected revenue due to an increase in COVID alert levels, businesses and organisations need to measure their revenue over a continuous 7-day period where the first day is on or after the first day of the increased alert level.
All 7 days must be within the period of the increased alert level.
This affected revenue period then needs to be compared against a regular 7-day revenue period that starts and ends in the 6 weeks prior to the increased alert level.
Make sure you keep a record of your calculations so you can give it to IRD, if requested.
Resurgence Support Payment Q&A
Q. How do I calculate the revenue decline on invoicing, especially if I do invoicing at EOM or after large jobs. Is it acceptable to base it on the typical labour hours usually invoiced in a typical week?
A. Yes
Q. Is a business eligible if they have moved from being a sole trader to a business within the last six months?
A. Yes. Eligibility is based on business not structure
Q. I am a Sole Trader, but have been operating for less than 6 months, am I eligible to apply?
A. No, new Sole Traders who started up within the last 6 months will need to contact IRD to state their situation to determine how they can be assisted for possible resurgence support
Q. Is the decrease in revenue over a 7 day period for as long as we are in lockdown above level 1?
A. Yes, so if you don't have a revenue drop this week but next week you do, then you can apply next week and use that for the comparatives
Q. Can my bookkeeper apply for the Resurgence Support Payment on my behalf? A. Yes, but only if the have your signed authority to act form Q. August is a really expensive month due to Provisional Tax, GST and PAYE due, what do I do if I am struggling to pay these? A. If you are struggling to pay taxes that are due, send a secure email to IRD
Contact us We have a page dedicated to COVID-19 on our website, which has up to date information and resources for businesses, so ensure you take some time to check it out. If you need help with the subsidies, you can call your Account Manager or Accountant direct or email info@sass.nz. If you need help with a employment question, you can phone Lisa direct on her DDI – 928 4277. Thanks, Sass Team
