Check if you are ok first!
The lockdowns can cause great stress on both yourself personally and your business. The first step with any support required is to check if you yourself are ok! In today’s world it can create immense pressure and judgement. Don’t feel alone. We are all in this together and there are points of call should you feel it is all to much or even just need to vent. Xero has the XAP program (https://www.xero.com/nz/xap-faq/).
The Xero Assistance Programme (XAP) provides Kiwi small businesses with access to free face-to-face, telephone, live chat and online counselling. It’s available free of charge through Xero’s global provider, Benestar, and offered to Xero starter, standard and premium subscribers, their employees, and their families.
On top of that the team at JBM are always happy to take a call and talk you through your options or even just listen to you vent!! We might just need the chat also!
Resurgance Support Payment (RSP)
Each time we go into a lockdown level of 2 or higher the Inland Revenue open up applications to the RSP. This is available when your business or yourself incurs a 30% drop in capital-raising ability (weird term for cashflow in or revenue) over a 7 day period due to the lockdown.
When the RSP is activated, eligible businesses and organisations can apply to receive the lesser of:
- $1,500 plus $400 per full-time equivalent (FTE) employee, up to a maximum of 50 FTEs
- four times (4x) the actual revenue decline experienced by the applicant.
Applications for the current round will open at 8am 24 August. Note your revenue could also be effected by the timing of your invoicing and other items. So if you need help calculating or want to adjust your numbers to more appropriately reflect your actual business give us a call. Also make sure you keep records on how you calculated your eligibility.
To apply for the resurgance support payment you will need to log into your myIR account and click the “more” button circled. Then under “Covid 19 Support” you will find the application.
The eligibility for this one is being kept closed until we see the decleration on Friday the 20th of August (update now included below) You will have had to have had a drop in revenue of 40% due to the lockdown and you need to base that drop on the below.
Your business has had, or you are predicting will have, a decline in revenue that is attributable to the effect the move to Alert Level 4 on 17 August 2021 has had on your business and that is of at least 40% over the period 17 August 2021 to 30 August 2021 (inclusive) (revenue test period) when compared to
- a typical 14-day consecutive period of revenue in the six weeks immediately prior to the move to Alert Level 4 on 17 August 2021 (default comparator period); or
- if you are an employer that has highly seasonal revenue, of at least 40% over the revenue test period when compared to the same 14 consecutive days in 2020 or 2019 (seasonal comparator period), provided you can demonstrate that the seasonal nature of your business makes it harder to meet the 40% revenue decline using the default comparator period than if your business was not of a seasonal nature; and
- in relation to both the calculation of revenue for the test period and the calculation of the revenue for the relevant comparator period, exclusive of any payments made to you from this subsidy, other COVID-19 Wage Subsidy schemes, the COVID-19 Short-term Absence Payment scheme, COVID-19 Leave Support schemes, COVID-19 Essential Workers Leave Support scheme, COVID-19 Resurgence Support Payment scheme or the COVID-19 Small Business Cashflow scheme.
Based on business and self employed people fitting the above criteria you will be eligible to the below.
The wage subsidy is paid in a 2 week lump sum. You can get:
- $600 per week for each full-time employee
- $359 per week for each part-time employee
Businesses anywhere in New Zealand can apply for the Wage Subsidy Scheme if they are eligible.
As an employer you must pass on the full wage subsidy to your employee. If the wage subsidy is more than your employee’s pay, you can continue to pay them at their normal rate.
If your business has to physically close but your employees can work from home, and you are not eligible for the Wage Subsidy Scheme, you need to keep paying them their usual salary or wages.
Links to website and how to claim below.
Declaration – https://www.workandincome.govt.nz/online-services/covid-19/declaration-wage-subsidy.html
Application found in this link – https://www.workandincome.govt.nz/covid-19/wage-subsidy/how-to-apply.html#null
Small Business Cashflow Loan Scheme
Another option available is the small business cashflow loan scheme. They have said this will be open till 31 December 2023 but if you think you will require the funds please do consider applying now and setting it aside. Like all funding you must first ask yourself (before you spend it) if you are going to get a return on it.
If you employ 50 or fewer staff, you may be able to apply for the Small Business Cashflow Loan Scheme. This is a one-off 5 year loan. You can borrow a maximum of $10,000 plus $1,800 per full-time-equivalent employee within your business.
- When applying for the loan, you need to be able to declare that your business is viable.
- Your business must have experienced a minimum 30% decline in actual or predicted revenue over the period of a month, compared with the same month last year. You can use the Revenue Estimator Tool to better understand your revenue.
- Applications are open until 31 December 2023 through myIR. If your business does not have a myIR account, you will need to create one to apply.
Loans will be interest free if they are paid back within 2 years. The interest rate is 3% for a maximum term of 5 years.
Absentee and Sick Leave
There are also smaller options available and these can be found at these links when employees need to self isolate etc.