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 Stewart & Co Blog

Covid-19 Wage Subsidy Round 2

Applications for the second round of the Covid-19 wage subsidy are now open.  If you applied for the first round of the wage subsidy, you will need to wait until two weeks after you applied for the first subsidy before making your application for the second round. 

 

The second round of the wage subsidy is the same as the first.  To be eligible your business will need to show it has had or expects to have a drop in revenue of at least 40% due over a period of 14 consecutive days between 31 August 2021 and 13 September 2021 inclusive (this is the revenue test period), compared to a typical 14 consecutive days of revenue in the six weeks immediately before to the move to Alert Level 4 on 17 August 2021. 

Payments will cover a two week period at the rate of $600 a week per full-time employee or $359 a week per part-time employee.  The payments will be made as a lump sum into your nominated bank account. 

 

Resurgence Support Payment

If you have not already applied for the resurgence support payment applications are still open.  This payment is a one-off support payment available when the Government raises the alert level from level 1 for more than a 7 day period, at the Governments discretion.  For more information, see our previous newsletter here.

 

If you would like more information on the above or would like assistance with your application, please be in touch with the team at Stewart & Co. 

With Auckland staying at Level 4 for another 2 weeks and Level 3 for most of the remainder of the country, we continue to be available to help you through any financial difficulties you might be experiencing, as well as providing our normal services.  Please see below for further information on the financial support available in relation to Covid-19.

Covid-19 Wage Subsidy First Round Applications Closing Soon

Applications will close for the first round of the Covid-19 Wage Subsidy for August 2021 on 2 September 2021. This covers the first 2 weeks of New Zealand being at Alert Level 4 from 17 August 2021.

If you have not applied for the wage subsidy already for this period and believe you are eligible, please apply as soon as possible to avoid missing out. If you would like assistance with your application or would like us to process your application for you, please do not hesitate to be in touch.

Applications will open for a second round of the Covid-19 Wage Subsidy for September 2021 on 3 September 2021.

As with previous subsidies, applications are open to both self-employed as well as employers.


FAQs

What is the Wage Subsidy?
The Covid-19 wage subsidy is a payment available to qualifying business which have had (or expect to have) a 40% drop in revenue due to the change in alert level. It comprises of $600 per week for full-time employees and $359 per week for part-time employees. It must be used to pay employee wages.

What is the Resurgence Support Payment
The Resurgence Support Payment (RSP) is a payment available to business which can show a 30% reduction in revenue due to the change in alert level. The payment is $1,500 (or 4x your weekly income, whichever is lower) per business plus $400 per full-time equivalent employee. It is to be used to cover general running costs of the business. The RSP is a one-off payment available for the period we are at alert level 3 or higher.

Can I apply for both the Wage Subsidy and RSP?
YES. You can apply for the both the Covid-19 wage subsidy and the Resurgence Support Payment.

Do I need to declare this as income?
While the IRD and WINZ websites say that this is non-taxable income, they also state that the expenses that the payments offset are non-deductible. The easiest way to ensure you are returning this correctly is to show the expenses paid in full and the payments received as income. This will also give you a correct comparison for future years of what the expenses and income were for this period.

What about GST?
There is no GST included on the Covid-19 Wage Subsidy as this is to offset wages.
There is GST included on the Resurgence Support Payment as this is to offset general business running expenses. If you are GST registered you should include the RSP as income in your next GST return.

For additional information on the Wage Subsidy and Resurgence Payments click here

August 2021 Covid-19 Support

The Government have announced that as we will be in level 3 or level 4 for at least 7 days from 18 August 2021, the Covid-19 Wage Subsidy and Resurgence Payments will once again be available to businesses throughout New Zealand who have been impacted by the alert level shift. 

 

Covid-19 Wage Subsidy Scheme

Wage Subsidy applications will open on Friday 20 August 2021.  Eligible businesses will need to show an expected loss of revenue of at least 40% as a result of the alert level change to be able to apply.  Applications are through the Work & Income website.

Payments have increased for this period to $600 per week per full-time employee and $359 per week for part-time employees.

The wage subsidy will be paid as a lump sum two-week payment and is usually paid within three days of making your application. 

The payment must be used to pay employee wages.  Shareholder employees and sole traders can apply for themselves. 


Resurgence Support Payment

If a business incurs a loss of 30% revenue due to the alert level change, they can apply for the resurgence support payment through MyIR on the IRD website. 

Payments for the Resurgence Support Payment are a lump sum of $1,500 plus $400 per full-time equivalent employee up to a maximum of 50 employees. 

The payments can be used for business expenses in general. Applications for this will open on 24 August.

 

Further support is available if staff must self-isolate or need to miss work to get a Covid-19 test and cannot work from home. 

If you would like help with applications for any of the above applications, please do not hesitate to be in touch. 

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