Government financial assistance for businesses impacted by COVID-19 – March 18, 2020
It’s hard to escape news of the Coronavirus pandemic that’s currently sweeping the world. We want to start by saying we’re here to help you navigate the changes this virus causes to you, your team, your family and your business. We understand that your family and your team are the most important priority at the moment, and the same goes for our staff. If you’d like to move to online meetings like Zoom or Skype, or conduct our catch-ups via phone call instead of in-person, we are happy to assist.
As the impact of the Coronavirus continues to spread, Jacinda Arden’s government announced a business support package aimed at reducing the anticipated economic downturn. The package includes a number of economic stimulus measures, to the tune of $12.1 billion dollars. We have included a recap of what’s included in the package below, but please get in touch if you have any questions.
Wage subsidy scheme
Employment across New Zealand will be supported by wage subsidies. These wage subsidies will be available for all employers that are significantly impacted by COVID-19 and are struggling to retain employees as a result. The scheme will be open to all businesses, including sole traders and the self-employed.
Wage subsidies will be available for businesses in all sectors and all regions that can show a 30% decline in revenue for any month between January and June 2020. Applications can be made here, but we are happy to help as you can apply based on forecasted revenue loss. Employers will need to declare that they have taken active steps to mitigate the impact of COVID-19.
This scheme is designed to help businesses who are struggling to retain their staff. While many businesses across New Zealand will experience job losses, this $5.1 billion wage subsidy scheme will shield some employees.
Leave and self-isolation support
Self-isolating and social distancing is pivotal in slowing the spread of COVID-19. The leave and self-isolation support package is designed to help businesses and workers who do the right thing.
The COVID-19 Leave Payment is financial support that is available for people who:
- need to self-isolate
- cannot work because they are sick with COVID-19
- cannot work because they are caring for dependents who are required to self-isolate, or who are sick with COVID-19.
This is not available to those who can work from home during the period of self-isolation, and who can be paid normally by their employer. Employers will apply for the leave on behalf of any employee who is self-isolating or sick and payments can be backdated to 17 March 2020. The payment is made to employers who are then required to pass it on to the employee.
There are some more parameters to consider, but please don’t hesitate to ask us if you have a question.
Business cash flow and tax measures
The announced business cash flow and tax measures include:
- 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.
Support for Māori communities and businesses
The Government has also announced health, social and economic support tailored to meet the specific needs of Māori communities and businesses. These measures include $30 million targeted directly to Māori health services.
If you have any questions or concerns, please feel free to reach out to us directly. Please stay safe and we wish you all good health in the months to come.