Find out what financial support is available to your business.
Wage subsidies and leave payments
The Government's initial 12-week Covid-19 Wage Subsidy Scheme has now come to an end.
The Wage Subsidy Extension Scheme has taken its place, but the bar for eligibility is higher. Businesses now need to be able to demonstrate a 40%, rather than 30%, decline in revenue.
The same business types can apply, and payment rates remain the same.
Employers, including those who are contractors, sole traders, self-employed, registered charities and incorporated societies, can apply for a wage subsidy of $585.80 per person for those working 20 hours or more per week and $350.00 per person for those working less than 20 hours per week.
If eligible, a lump sum payment per employee for 8 weeks will be provided to employers.
These wage subsidies are available for businesses that experience a 40% decline in actual revenue over the period of a month when compared to the same month last year and that decline is related to Covid-19. Businesses must make best endeavours to retain employees and pay them a minimum of 80% of their normal income for the subsidised period.
If you're currently receiving payments under the Wage Subsidy or Leave Support Scheme, you must wait until these are finished before applying for the Wage Subsidy Extension.
Can the wage subsidy be extended?
Many engineering firms are applying for the wage subsidy – but others are wondering if they'll have trouble demonstrating a 30% year-on-year monthly drop before the end of June.
The challenge for the profession is that billing and workflow cycles mean cashflow problems caused by the lockdown may be delayed beyond June.
Together with ACE New Zealand, we've written to the Minister of Finance asking that the parameters of the subsidy be amended slightly to address this. We're following this up and will let you know the result.
Up until 3pm on Friday 27 March, the Government was offering a leave payment to cover workers who could not work because they were sick with Covid-19, were caring for someone with Covid-19 or had to self-isolate in line with Ministry of Health guidelines but couldn’t work from home. This payment has been discontinued but applications lodged before the cut-off time will still be processed.
The Business Finance Guarantee Scheme
From Thursday 2 April, businesses can start applying to their banks for loans under the Business Finance Guarantee Scheme.
Under the Scheme, businesses with annual revenue between $250,000 and $80 million can apply to their bank for loans up to $500,000, for up to three years. The Scheme will offer a total of $6.25 million in loans (underwritten by the Government and the business’ bank).
Normal lending processes will be followed by the banks, who will make lending decisions. Banks are the key contacts for businesses and further information can be found on banks’ websites.
Commerical rent relief
The Government is considering options to support New Zealand businesses with rent payments as they face the economic impacts of Covid-19. While many businesses have been up and running since level 3, many small businesses have been hit hard by a drop in revenue and are struggling to meet fixed costs. At this stage no package has been announced.
Disaster response planning
Our auditors Grant Thornton have developed some guidance to help businesses as well as a checklist for building a disaster response plan.
ACC levy payments
ACC have advised that invoices for the 2020/21 financial year that would usually have been sent from 1 July will now be issued in October. Other invoices issued throughout the year will also be on hold for three months. They are making payment options available once they send invoices.
Further guidance and advice