Covid Support

This is an update on the Government’s Covid Support packages available (as of 18 August 2021).

Resurgence Support Payment
Short-Term Absence Payment
COVID-19 Wage Subsidy Support August 2021

Resurgence Support Payment (RSP)

What is it?

This government-initiated plan is to help support viable and ongoing business operations when Covid-19 alert levels increase to Level 2 or higher.

When does it apply?

Applications can be made to Inland Revenue via myIR from 8am on 24 August.

If alert levels decrease, then increase again (to Levels 2 or above), the Government may decide to activate the RSP each time. However, it’s not a certainty – it is completely at the Government’s discretion.

Who is eligible?
  • Businesses which have experienced a reduction in income of at least 30%, for at least seven days, as a result of the increased alert level
    • This includes shareholder-employees and sole traders
  • All businesses throughout New Zealand – not only to the area(s) facing restrictions
  • You can submit only one application upon each government activation. If your application is accepted, the RSP will be paid in one lump sum.

So far, the Government has activated three RSPs – 14 February 2021, 28 February 2021, and the current one for 17 August 2021. There may be more in the future.

You need to apply each time, assuming the eligibility criteria are still met.

How much is it?
  • $1,500 plus $400 per full-time equivalent employee (FTE)
    • Maximum claim is for 50 FTEs, or
  • Four times the actual revenue drop experienced by the business

…whichever is the lowest.

What can it be used for?

The RSP scheme was created to recognise that businesses still face fixed costs during lockdown periods.

For this reason, the RSP is to be used for wages and fixed operating costs.

Are there any GST or income tax obligations?
  • If your business receives an RSP, it is considered to be taxable income, and any expenses paid from the RSP (wages and rent, for example) are deductible for income tax purposes

It may get a little tricky if you receive a payment before 31 March (tax year-end) but start paying it out after that date. If you’re with Beany, we’ll take care of this when preparing your financial statements.

  • The RSP is subject to GST, so if your business is GST-registered, you need to declare this as GST-able income
    • In Xero, or your other accounting system, make sure you tick the box for GST on income
How do I apply?

You can apply through Inland Revenue, via myIR.

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Short-Term Absence Payment (STAP)

What is it?

This is a one-off payment where workers may not be paid while waiting for the results of a Covid-19 test.

When does it apply?

Applications opened on 9 February 2021 and continue to remain open.

Who is eligible?

The payment can be claimed if:

  • The employee (or you as a sole trader) needs to miss work to stay at home while waiting for a Covid-19 test, and
  • The employee (or you as a sole trader) is unable to work from home
How much is it?

There is a one-off payment of $350 to employers (to be passed on to the employee).

How do I apply?

Applications should be made via WINZ.

Additional information

Our separate blog provides additional information on how the payment is to be treated in the pay run, financial statements, and tax returns.

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COVID-19 Wage Subsidy August 2021

The Government has announced an additional wage subsidy for those affected by the rise in alert level on 17 August 2021.

Conditions
  • Businesses must experience or expect a 40% decline in revenue over a the period between 17 August 2021 and 30 August 2021 (inclusive). You need to compare this revenue against a typical 14-day period within the six weeks immediately before 17 August 2021.
  • Employees must continue to be employed by the business
Who can get it?
  • Employers of businesses
  • Self-employed people
  • Businesses throughout New Zealand
How much is it?
  • $600.00 per week, for each full-time employee (20 hours a week or more)
  • $359.00 per week, for each part-time employee (less than 20 hours a week)

There is no GST on these transactions. You don’t need to pay GST on the amounts received and you cannot claim GST on the wages paid to employees (or yourself, if a sole trader).

How do I apply?

Applications open at 9am on 20 August 2021 and can be made via the Work and Income website.

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