On 21 February the Government announced three fortnightly COVID 19 support payments, with the first payment opening for applications at 8 am 28 February 2022.
COVID-19 Support Payments
The amount of each fortnightly payment is $4,000, plus $400 for each full-time equivalent employee (FTE), up to a maximum of 50 FTEs. This equates to a maximum payment of $24,000 each fortnight. You need to apply separately for each payment.
To qualify for the first payment you need to show your income is 40% lower in a 7-day period any time from February 16, compared to a typical week between 5 January 2022 and 15 February 2022.
Information and income levels for the second and third payments have not yet been announced.
If you would like to apply for this payment or have further questions in relation to this payment please contact Jordan Sprosen on 03 211 3778.
Small Business Cashflow (loan) Scheme (SBCS)
We have previously discussed the SBCS, which opened on May 12, 2020. Applications are open until 31 December 2023.
For a business to qualify for this scheme it must:
- must have been in business for at least 6 months; and
- must have 50 or fewer full-time equivalent employees (FTE); and
- have experienced at least a 30% decline in actual revenue due to COVID-19; and
- the business remains viable.
If a business meets the above requirements, it can apply for a loan. The loan was $10,000 per business plus an additional $1,800 per FTE up to a maximum of $100,000. Sole traders can receive up to $11,800. Businesses who have not taken out this loan, and still qualify based on the above, can now receive a base loan of $20,000.
For those who have previously taken out a loan, the Government has announced some changes which are proposed to come into effect by the end of March. If you have kept to the terms of the existing loan you:
- will be able to apply for a top-up loan of an additional $10,000
- be able to add any amount that wasn’t originally drawn down, that you were entitled to, to the top-up amount
The top-up amount will have a revised 5-year repayment term, with the first two years being interest-free.
All SBCS loans, upcoming and existing, will be interest-free for two years, as long as you keep to the terms of the loan.
Short-Term Absence Payment and Leave Support Scheme for Employees
If your employees have to stay home and cannot work because they are waiting on test results for COVID-19 or have to self-isolate then your business may qualify for the short-term absence payment or the leave support scheme.
The short-term absence payment is a one-off $359 payment for each eligible employee, in any 30-day period, who cannot work from home while they wait for a COVID-19 test result.
The leave support scheme is a weekly payment of $359 for part-time employees and $600 for full-time employees who cannot come into work because they are one of the affected groups who have been told to self-isolate and who cannot work from home.
For more information on these two payments visit www.workandincome.govt.nz
Craig is an expert in reviewing and analysing client’s financial statements and tax returns and provides specialist taxation advice, you can always expect Craig to have his finger on the taxation pulse.