Covid 19 Government Assistance – August 2021

Covid 19 Government assistance

The Government is offering assistance to businesses with five schemes:

• Wages Subsidy Scheme
• Resurgence Support Payment
• Leave Support Scheme
• Short-Term Absence Payment
• The Small Business Cash flow Scheme

Wages Subsidy Scheme

• $600 for full-time employees
• $359 for part-time employees
• Applications opened 20 August 2021
• Applications usually remain open for up to a month
• Extensive declaration form, with enormously long sentences (one of them has 155
words) – about 10 pages has to be signed
• You need to have had at least 40% decline in income (exclusive of any Covid subsidy
payments) over the period 17 August 2021 to 30 August 2021 inclusive, when
compared with a typical 14 day consecutive period of revenue in the six weeks
immediately prior to 17 August 2021. There is a special rule for those who have high
seasonal revenue
• You need to get the consent of your employees, preferably in writing, to provide
information to the Ministry of social development: there are six long bullet points – see
paragraph numbered 6
• Don’t forget to advise your named employees they can request access to information
you have provided in your application
• Paragraph 11 deals with repayment of the subsidy. If you take the money and you
don’t meet the criteria, such as a sales drop of at least 40% your actual sales turn out
to be less than 40% decline, you have to repay the money
• paragraph 13 says you can be prosecuted if you “receive any subsidy or part of the
subsidy that you were not entitled to receive, including where any predicted decline in
revenue of the relevant period is not realised.” MSD will be carrying out some audits

Important point

We quote directly from the declaration:

• “Before making this declaration, you have taken active steps to mitigate the impact of
the move to Alert Level 4 on 17 August 2021 on your business activities (including but
not limited to engaging with your bank, drawing on your cash reserves as appropriate,
making an insurance claim).”

It would seem you may not be permitted to claim the subsidy if you have sufficient
funds or can raise sufficient funds to meet the wage payment. Note the use of the
words “as appropriate”. If you have money aside for tax, for example, would it be
appropriate to use the money to pay wages? Probably not. Maybe you would also be
entitled to reserve money for your normal personal drawings and for your business
bills.

“Engaging with your bank” possibly includes making sure your business is viable
before you make a claim for the subsidy.

Resurgence Support Payment

If a business or organisation has had at least a 30% drop in revenue over a seven-day
period due to the increased Covid 19 alert level, they can apply for this payment.

The amount is $1500 plus $400 per full-time equivalent employee up to a maximum of 50
full-time equivalent employees or four times the actual revenue decline, whichever is the
lesser.

The Government could activate this scheme multiple times if there are multiple alert levels
so watch out for this possibility.

You will find the process of applying for the payment is on the last line of the page and it will lead you through to the Inland Revenue website.

Leave Support Scheme

This scheme is for employees, and parents and caregivers of a dependent who have been
required to self-isolate.

This payment is a two-week lump sum per eligible employee at the rate of $600 a week for
full-time employees who were working 20 hours or more a week. The amount for part-time
workers is $359 per week.

Short Term Absence Payment

This scheme is for those who cannot work from home and need to miss work to stay home
while waiting for a Covid 19 test result.

There is a one off payment of $350 for each eligible worker.

Self-employed people can also apply.

Small Business Cash Flow Scheme

This scheme has been in existence for some time. If you have repaid your loan, you could
probably borrow again.

Claims

You are entitled to make claims under more than one heading but not entitled to claim for the
same person under more than one heading.