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Extra grants for businesses

Government launches resurgence support payments for companies and sole traders.
Posted on 24 August, 2021
Extra grants for businesses

Companies struggling with the impact of the level-four lockdown can now apply for more financial support.

While businesses have been able to apply for the wage subsidy since the end of last week, applications for the resurgence support payment (RSP) opened on August 24. 

Inland Revenue is administering the RSP with applications for the wage subsidy being handled by the Ministry of Social Development.

Under the RSP scheme, those eligible can secure get a $1,500 pay-out plus $400 for each full-time employee up to a maximum of 50 staff. The largest payment possible is $21,500. 

Sole traders can get a maximum payment of $1,900. Businesses can claim the RSP as well as the wage subsidy.

Under the wage subsidy scheme, businesses must have a decline in revenue of at least 40 per cent. For the RSP the threshold is 30 per cent for a decrease in revenue or in capital-raising ability over a seven-day period compared with a seven-day period in the six weeks before the alert level rose.

Operators, including sole traders, must also have been in business for at least six months and be considered viable and ongoing. Passive income and all rents are excluded from the measurement of revenue. 

Applicants must by 18-plus and have a New Zealand business number and Inland Revenue says standard accounting principles are applied to determining income. 

The calculations on revenue must be retrospective and based on what happened, not on a forecast. Firms yet to earn revenue are still eligible if they have suffered a 30 per cent drop in the capital-raising ability over the seven-day period.

Kirk Hope, pictured, chief executive of BusinessNZ, says the RSP will assist many businesses but there are concerns that the way some companies are structured will rule them out of being eligible. 

Much work has been done since previous lockdowns to broaden the scope of the RSP, but some are still ruled out.

As a result, BusinessNZ has been in contact with the Treasury to point out that firms shouldn’t be forced to restructure to get access to financial support.

Kirk says the best thing for businesses would be for New Zealand not to have to go into lockdown when a community case is detected. 

Getting vaccination rates up is a key to achieving that and many businesses are providing incentives – including cash payments and vouchers – to encourage staff to get vaccinated. 

He adds: “If we accept we are going to have people coming through the border with Covid, you just have to get better at testing them at the border.”