Depending on the specific impacts facing your business there are a range of the relief policies that could help you get through the COVID-19 lockdown and subsequent period. Here we give a brief overview of the support available to New Zealand businesses.
Wage subsidy scheme
Available to virtually all businesses who have employees including NGOs, charitable organisations, post treaty settlement governance entities, and even new businesses.
The subsidy is $585.80 per week for a full time employee (20 hrs or more) or $350.00 per week for a part time employee (less than 20 hrs).
This scheme was initially limited to $150,000 per business but that cap has now been removed and it is unlimited.
Full details are at: www.employment.govt.nz/leave-and-holidays/other-types-of-leave/coronavirus-workplace/wage-subsidy/
Make an application at: workandincome.govt.nz/products/a-z-benefits/covid-19-support.html
Some businesses have reported already receiving the money.
Leave payments for employees required to self-isolate
This is for those who ought to self-isolate but will suffer financially if they do. Mostly relevant to the period before the level four lockdown, but could be still applicable to some.
Open to all workers in all firms, sectors, and regions, sole-traders and the self-employed where the need to self-isolate or recover from COVID-19 prevents a person from working. All people legally working in New Zealand are eligible for the scheme.
Payments are $585.50 per worker per week for full-time workers and $350 per worker per week for part-time workers.
The employer must make the application, and then pass on the full amount to the worker affected.
Full details are at: www.employment.govt.nz/leave-and-holidays/other-types-of-leave/coronavirus-workplace/leave-payment/
Make an application at: workandincome.govt.nz/products/a-z-benefits/covid-19-support.html#null
Note: Each business can only apply once for the wage subsidy, but if an employee has to self-isolate more than once then they will qualify for the leave payment on each period of self-isolation.
Business Finance Guarantee Scheme
For solvent small and medium-sized firms with a turnover of between $250,000 and $80 million per annum, loans of up to $500,000 over three years provided by banks at “competitive, transparent rates”.
There are to be six month principal and interest payment holidays for mortgage holders and SME customers, but no details on those available yet. This will be a relief for the many owner operator businesses which are backed by a mortgage on the family home.
Details are yet to be agreed with the banks, and will be announced later this week. Government has indicated that there will be a separate scheme for larger and more complex organisations.
See the full press release at: www.beehive.govt.nz/release/mortgage-holiday-and-business-finance-support-schemes-cushion-covid-impacts
Business cash flow and tax measures include:
- Giving Inland Revenue the discretion to remit use-of-money interest (UOMI) for customers significantly adversely affected by COVID-19.
- Increasing the provisional tax threshold from $2,500 to $5,000 from 2020/2021
- Increasing the small asset depreciation threshold from $500 to $1,000 — and to $5,000 for the 2020/21 tax year
- Allowing depreciation on commercial and industrial buildings from 2020/2021
- Removing the hours test from the In-Work Tax Credit (IWTC) from 1 July 2020.
IRD are also offering the ability to pay in instalments, filing dates are being extended, and businesses which are severely affected can now apply for a write-off.
Full details are at: www.ird.govt.nz/covid-19-novel-coronavirus/tax-relief/tax-relief-for-businesses
A Certificate of exemption may also be of use for some. This is for contract work where schedular payments are to be deducted, such as forestry or bush work of all kinds, fishing boat work for profit-share. Contractors with a certificate pay their own tax, instead of having the tax deducted from each schedular payment.
Full details are at: www.ird.govt.nz/income-tax/withholding-taxes/schedular-payments/getting-schedular-payments/certificates-of-exemption-for-schedular-payments
Make an application at: www.ird.govt.nz/income-tax/withholding-taxes/schedular-payments/getting-schedular-payments/certificates-of-exemption-for-schedular-payments/apply-for-an-exemption-from-schedular-tax
Specific support for Māori business
- A Whānau Māori Community and Mārae package reprioritising $10 million from the Māori Development vote to support community outreach
- Māori Health and Whānau Ora response with $30 million targeted directly to Māori health services and an extra $15 million to Whānau Ora commissioning agencies
- Supporting Māori Businesses and engaging with Māori with $1 million of funding to enable a needs assessment for Māori businesses, and $470,000 to Te Arawhiti to engage and work with iwi on their COVID-19 pandemic response plans.
It appears the details of how this will be distributed are still being decided. See the press release at: www.beehive.govt.nz/release/supporting-m%C4%81ori-communities-and-businesses-through
If you do have to make staff redundant, Work and Income are offering practical help to businesses and employees.
Full details are at: workandincome.govt.nz/employers/redundancy-support/index.html
Or call them on 0800 778 008 as all their offices are now closed.