Business Support Following Lockdown Announcement

The Government has announced that significant support for businesses and workers has been triggered following a rise in alert levels to combat COVID-19 in the community.

The Government decided to move to alert level 4 for New Zealand starting at 11.59 pm on Tuesday, 17 August 2021, initially for 3 days, except for Auckland and Coromandel peninsula where it is likely to be at level 4 for 7 days as a result of new cases in the community in Auckland. This means that:

• vaccinations are paused for 2 days
• all non-essential businesses are to close
• masks are likely to be mandatory in public
• all education facilities are closed, including for children of essential workers
• people have 48 hours to return to their homes if away from home
• one person per household can go to a local supermarket, and
• People can exercise locally but must maintain 2 metres distance from others.

The Government has activated a number of business support measures to provide certainty to businesses and workers. These include the following:

• The Wage Subsidy Scheme (WSS) allows eligible employers anywhere in the country to apply for the WSS if they expect a loss of 40% of revenue as a result of the alert level increase announced on 17 August. The WSS rates have been increased to reflect the increase in wage costs since the scheme was first used in March 2020. Businesses will be eligible for $600 per week per full-time equivalent employee and $359 per week per part-time employee. The wage subsidy will be paid as a 2-week lump sum. Applications open on Friday, 20 August with the first payments usually available after 3 days.
• A Resurgence Support Payment (RSP) is available if firms incur a loss of 30% of revenue as a result of the alert level increase. When the RSP is activated, eligible businesses and organisations can apply to receive the lesser of:

○ $1,500 plus $400 per full-time equivalent employee (FTE), up to a maximum of 50 FTEs, or

○ 4 times (4x) the actual revenue decline experienced by the applicant.

It is possible that the Government could decide to activate the RSP multiple times if there are multiple alert level increases from level 1. Businesses and organisations can apply for the RSP each time that it is activated as long as they meet the eligibility criteria. (Inland Revenue will provide more information on their website at www.ird.govt.nz from Wednesday, 18 August about applications for the alert level increase announced on 17 August.)

• The Leave Support Scheme (LSS) provides a 2-week lump sum payment of either $585 per week for full-time workers, or $350 per week for part-time workers, who must self-isolate and cannot work from home. More information is available at the website.
• The Short-term Absence Payment (STAP) provides a one-off (once per 30 days) $350 payment for workers who must miss work due to a COVID-19 test and cannot work from home. This payment is also available to self-employed workers. Further information about this payment is available at the website.

Contact our team if you have any queries regarding the support available for your business.

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