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 Stewart & Co Blog

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. 

Employee Sick Leave Entitlements Are Increasing

 

From 24 July 2021 an employees entitlement to paid sick leave is increasing from 5 to 10 days a year.  The main thing to understand is that for existing staff, this change does not happen straight away but instead on their next sick leave anniversary date.  Here are a few examples:

Example 1: Employee started work on 1 April 2020

Once an employee has reached six months of continuous service, they are entitled to paid sick leave.  For this employee, that would mean their anniversary date for sick pay is 1 October each year.  Their entitlement to the new 10 days paid sick leave will therefore start on 1 October 2021.

Example 2: Employee started work on 1 January 2020

This employee's sick pay anniversary date is therefore 1 July (being six months after their start date anniversary).  As 1 July 2021 is before the date of the change to 10 days paid sick leave, they will not be entitled to the 10 days until their following sick pay anniversary date on 1 July 2022. 

Example 3: New Employees

New staff who started work on or after 24 January 2021 will receive 10 days paid sick leave on reaching their first six month sick pay anniversary date. 

 

Casual employees are also entitled to paid sick leave provided they meet the following criteria:

  1. They have six months' current continuous employment with the same employer, or
  2. They have worked for the employer for six months for:
  • an average of 10 hours per week, and
  • at least one hour in every week or 40 hours in every month.

Their entitlement is then the same as for a regular employee. 

 

It is important to note that paid sick leave is not adjusted in any way for the number days a week a person works on average.  If you have an employee who only works 1 or 2 days a week, they are still entitled to the full 10 days paid sick leave per year. 

Lastly, the maximum entitlement an employee can hold of paid sick leave is 20 days. 

If you have any questions or would like to know more about how the above changes will impact your business, please do not hesitate to be in touch with the team at Stewart & Co. 

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