COVID financial support for businesses, by Stewart Russell
Omicron has steadily been making its way around the country and its impact is certainly here in the Far North, with schools returning to on-line learning in some instances.
Every business is being hit, whether that be by delays in the supply chain, team members off sick or isolating as a household contact.
Last month Grant Robertson announced measures to help business who are being severely affected by this COVID outbreak.
Some of you will be familiar with the Resurgence payment which ended last year. In its place is the COVID Support payment (CSP).
Businesses need to compare their revenue for a 7-day consecutive period from 16 February – to either a similar week 6 weeks prior (5 January – 15 February) or compared to the same period in 2021. To qualify for the CSP the business needs to have experienced a 40% drop in income and the decrease is due to the latest COVID outbreak.
The amount you receive is for a fortnight and is the lower of 8 times the decline in revenue, or $4,000 plus $400 per full time employees (FTE). For example, a business with 2 employees plus a working owner could receive up to $5,200.
The scheme opened last week and is expected to be open for at least six weeks. Therefore, there are potentially three fortnightly payments, provided your revenue is 40% down for each of those periods.
Like the resurgence payment you apply through the IRD and must provide revenue figures for the period of your claim and the comparative period. Records supporting these claims need to be kept.
The Government also announced changes to the Small Business Loan scheme. Initially this scheme allowed businesses to borrow $10,000 plus $1,800 per FTE – repayment made over 5 years, no repayment for two years, and no interest charged if debt repaid in full within two years.
This has been extended to being completely interest free for the first two years – and enabling businesses to borrow up to an extra $10,000. Again, this is applied for via the IRD, and their systems are in the process of being updated to enable businesses to access this additional support.
Where a member of staff must self-isolate either with Omicron or under some other official advice (for a minimum of 4 days) and CANNOT WORK FROM HOME, employers may claim, on employees’ behalf, $600 per week for full-time employees or $359 for part-time.
There is also financial support available where a staff-member has been officially advised to get tested and therefore must self-isolate until a negative result comes back, and again CANNOT WORK FROM HOME. This is called the ‘Covid 19 Short-Term Absence Payment’ - one-off payment of $359 is available for employers to apply for on their employees’ behalf. This is only available to people taking PCR tests, as there is no delay in obtaining results with rapid antigen tests.
As you will be aware, rules and regulations relating to COVID change on a regular basis along with the various government support. For the latest information, check out the government website www.covid19.govt.nz/isolation-and-care/financial-support or ask your friendly PKF business adviser!