Covid lockdown – August 2021

Unfortunately, we are unable to make any applications for you. You are the best placed person to apply as you know your business better than anyone else.

More detailed information on eligibility and payments can be found in our separate Covid Support blog.

The lockdown announced 17 August 2021 has triggered three of the government’s existing policies – Resurgence Support Payment, the Covid Wage Subsidy, and the COVID-19 Leave Support Scheme. The terms ’employee’ and ‘business’ below include sole traders and shareholder-employees (only those who receive income from the business).

Some information and applications may not be immediately available, so keep checking the websites regularly.

Resurgence Support Payment
Covid Wage Subsidy
COVID-19 Leave Support Scheme
Short-Term Absence Payment (STAP)
Small Business Cashflow Scheme (SBCS)
GST and Income Tax implications
Accounting for government assistance in Xero
Summary of online resources

Government assistance available

Resurgence Support Payment
For businesses which expect a loss of at least 30% revenue as a result of this lockdown
  • To be paid as a lump sum
  • Can be used for general operating costs
  • The amount is to be the lower of:
    • $1,500 plus $400 per full-time equivalent employee (up to 50 FTEs), or
    • Four times the actual revenue decline experienced by the business

More information about applications is on the IRD’s website. Keep checking for updates.

Back to top

Covid Wage Subsidy

For businesses which expect a loss of at least 40% revenue as a result of this lockdown

  • To be paid as a two-week lump sum
  • Can only be used for wages, not general operating costs
  • $600 per week for each full-time employees
  • $359 per week for each part-time employee


Applications opened on 20 August via
Work and Income NZ.

Back to top

COVID-19 Leave Support Scheme

Used for employers to help pay employees who cannot work from home while self-isolating

  • $585.80 per week for full-time employees
  • $350.00 per week for part-time employees


Applications opened on 20 August via
Work and Income NZ.

Back to top

Short-Term Absence Payment (STAP)

This policy remains in place and can be accessed at any time if eligible.

STAP is where employees (including sole traders and shareholder-employees) cannot work from home while waiting for Covid test results. Applications are made via Work and Income.

Back to top

Small Business Cashflow Scheme (SBCS)

This policy remains in place and can be accessed at any time if eligible.

The SBCS is a loan obtained via Inland Revenue with a low interest rate. If you repay the loan within two years, you won’t be charged interest. More information can be found on our website here, and applications can be made in this section of the IRD’s website.

Back to top

GST and Income Tax Implications

If the payment is taxable (see table below), we suggest setting aside 20% – 30% to cover the income tax portion.

Back to top

Accounting for government assistance in Xero

We often get asked “how do I code it in Xero”. This will depend on how you operate your business and how you pay yourself from the business. Please see below for different scenarios and accounting treatment.

You may need to create a new account code within your Chart of Accounts. Please head to this link for guidance on how to do this in Xero.

Back to top

Covid small business loan

To reconcile your loan payment, you will need to set up a (new) code with the type being ‘Current Liability’ in the Chart of Accounts Make sure that it’s set to No-GST. Any repayments will also be coded to this loan.

Interest on small business loan

This should be recorded as an interest expense.

Back to top

Resurgence Support Payment

Please record this as Other Revenue. If you’re registered for GST, you need to include this as income in your GST return.

Back to top

Wage subsidy / COVID-19 Leave Support Scheme / Short-Term Absence Payment
  • Sole traders and partnerships – please reconcile to a (new) code within equity
  • Companies where you are a shareholder-employee and you are an employee receiving PAYE-paid wages, please code it to a (new) code with the type ‘Other Revenue’ in the Chart of Accounts
  • Companies where you are a shareholder-employee and you’re not receiving any PAYE-paid wages from the company, please record this as a (new) account with the type ‘Current Liability’ in the Chart of Accounts

Back to top

Summary of online resources

The links below will take you to relevant online resources.

Financial support for businesses (covid19.govt.nz)
Resurgence Support Payment (IRD website)
Covid Wage Subsidy (WINZ website)
COVID-19 Leave Support Scheme (WINZ)
Short-Term Absent Payment Scheme (IRD website)

Back to top

Be safe everyone.

Related articles

Your Business
How does ACC work if you’re self employed?
Read more
Your Business
What’s the difference between a company director and a shareholder?
Read more
Menu