With Auckland moving to Level 3 for the second time in a month, hospitality businesses have once again been forced to shut their doors to on-site customers for a minimum of seven days.
With the ongoing uncertainty of the future impact of COVID-19 in New Zealand, here are the options currently available to hospitality businesses according to www.business.govt.nz
Resurgence Support Payment
A Resurgence Support Payment may be activated if the Alert Level increases from Level 1 for a week or more.
Businesses and organisations will be eligible if they experience a 30% drop in revenue over a seven-day period after an Alert Level increase and meet other eligibility criteria.
This drop is compared to a typical seven day period in the six weeks before the increase in Alert Level.
The decline in revenue must be a result of the specific Alert Level change, not just COVID-19 in general.
You must have been in business for at least six months to be eligible.
Charities, not-for-profit organisations, the self-employed and pre-revenue businesses, such as start-ups, may also be eligible.
This payment is not a loan, so does not need to be repaid.
The payment must be used to help cover business expenses such as wages and fixed costs.
Applications will remain open for one month after the return to Alert Level 1.
The current round of applications will close on 23 March 2021. You can apply through myIR.
Wage Subsidy Scheme
The Wage Subsidy Scheme will be available nationwide if any part of the country moves to Alert Level 3 or above for seven days or more.
Businesses and the self-employed will be eligible if they experience a 40% drop in predicted or actual revenue over a consecutive 14-day period, compared to a typical fortnightly revenue in the six weeks before the rise in Alert Level.
You would need to be able to show that the revenue drop is due to the change in alert level, not just COVID-19 in general.
Short-Term Absence Payment
A COVID-19 Short-Term Absence Payment is available at all Alert Levels to employers to pay workers who follow public health guidance and are staying home while waiting for a COVID-19 test result.
It’s also available to eligible self-employed workers. To be eligible, workers need to be unable to work from home and need to miss work while waiting for the test results.
The payment is $350 for each worker. Employers or the self-employed can apply for any worker once in any 30-day period.
Small business cash flow loan scheme (SBCS)
The Government will provide loans to small businesses, including sole traders and the self-employed, impacted by COVID-19 to support their cash flow needs.
Applications have been extended and are now open until 31 December 2023. You can apply through myIR.
The small business cash flow loan scheme will provide assistance of up to $100,000 to businesses employing 50 or fewer full-time employees. This includes sole traders and self-employed businesses.
Details of the loans include:
- $10,000 to be provided to eligible businesses
- An additional $1800 per equivalent full-time employee
- Interest free if the loan is paid back within two years
- An interest rate of 3% for a maximum term of five years
- Repayments not required for the first two years
- You must show at least a 30% drop in revenue due to COVID-19, measured over a 14-day period in the past 6 months
- Maximum amount you can borrow depends on the number of full-time and part-time employees.
For more information on assistance, including Tax and ACC support, Business debt hibernation and the Business finance guarantee scheme, visit www.business.govt.nz.
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