Government support for businesses during COVID-19 resurgence

16 Feb 21

The Government has announced a new financial support package, the Resurgence Support Payment, as well as a Wage Subsidy Scheme for businesses affected by COVID-19 as a result of an escalation of the alert levels.

 

Resurgence Support Payment

The Resurgence Support Payment (RSP) will be available to businesses that can demonstrate a 30% decline in revenue over a 7-day period as a result of an escalation to level 2 or higher for a week or more.

The RSP will be paid to eligible businesses in a single lump-sum payment and will consist of a base payment of $1500 plus $400 per employee up to a maximum of 50 full-time equivalent employees. The maximum that can be paid to one business is $21,500.

The RSP will be administered by the IRD.

 

Wage Subsidy Scheme

In addition to the RSP, the Government has confirmed that a Wage Subsidy Scheme (WS) will be available to businesses that experience a 40% decline in revenue as a result of an escalation to alert levels 3 or 4 for 7 days or more. The 40% decline in revenue will be measured by reference to the typical fortnightly revenue of the business in the six week period prior to the alert level escalation.

The WS will be paid in two-weekly payments and will match the duration spent at alert level 3 or 4, rounded to the nearest fortnight.

The WS payment rates are $585.80 per week for full-time employees (likely those who work 20 hours or more per week) and $350 for part-time employees (likely those who work less than 20 hours per week).

Employers will be obligated, among other things, to retain employees whom they receive the WS in respect of and must use best endeavors to pay at least 80% of each employee’s normal wages or salary for the duration of the WS.

 

Increased scrutiny

As a result of public and business lobbying for better integrity measures, employers will be required to keep evidence of the causal link between the change in alert levels and decline in revenue. The Government has suggested that further integrity measures may be introduced.

As a result, businesses applying for both the RSP and WS should anticipate an audit from the Ministry of Social Development and ensure the appropriate financial information is available.

Legislation formally establishing the RSP and WS framework is being drafted and is expected to pass before the end of the month.

Both support packages will be available retrospectively if a prolonged alert level escalation occurs prior to the passing of the legislation.

 

Want to know more?

If you have any questions about these support packages, please contact our specialist Employment Team.

 

PDF version: Government support for businesses during COVID-19 resurgence.

For more information contact:

Jack Brown

jack.brown@al.nz