Covid-19 – Help for your business

The Delta strain of Covid-19 has been described as a ‘game changer’, therefore the impact of community transmission in New Zealand, and the Government’s response by moving to Alert Level 4 will be the start of many changes businesses will need to deal with. It is therefore timely to be aware of support for businesses that may be financially impacted.

A few tips to consider:

• Consider what Government support may be available to your business.
• Discuss options with your bank.
• Contact suppliers and discuss any orders or payments that may be delayed.
• Discuss with your accountant or Inland Revenue any options that may be available for tax payments.
• Discuss with your landlord any options that may be available for lease payments.
• Communicate in good faith with your staff.

The Government’s wage subsidy is now available. Rates have increased to reflect the higher wage costs than the lockdown in March 2020. Eligible businesses may seek $600 per week for full time employees and $359 for part time employees. Payment is to be provided in a two-week lump sum. All amounts must be passed on to employees. Eligibility requirements have become more explicit, but are essentially an anticipated 40 percent loss of revenue due to Alert Level 4, which must be supported by records. Employers should seek written consent from their employees to apply for the subsidy on their behalf and to provide their personal information to the Ministry of Social Development for that purpose.

The Covid-19 Resurgence support scheme is available for businesses. This payment does not need to go directly to employee costs. It can be used for other fixed costs incurred by businesses. The Resurgence Support Scheme will provide up to $1,500 to the business, plus an additional $400 per employee (up to a maximum of 50 employees). 

To be eligible, businesses must have experienced at least a 30 percent drop in revenue, or a 30 per cent decline in capital raising ability, over a seven-day period due to the Alert Level. The decrease is compared with a typical 7-day revenue in the six-week period prior to the increase from Alert Level 1. Applications can be made if this drop is expected, rather than waiting for it to happen. We anticipate applications for this support will be open by Wednesday 25 August 2021. Inland Revenue advises that receiving any other Government Covid-19 support does not affect eligibility for the Resurgence Support payment.

Other options include the short-term absence and leave support schemes available for employees who cannot work if they are waiting for a Covid test or needing to self-isolate. These payments are not available if the business is receiving payments under the Wage Subsidy or Leave Support Scheme for the employee.

The Short-term Absence Payment provides a one-off $350 payment for employees who would be in the workplace (at Alert Level 4, this will only essential services) but are waiting for a COVID-19 test result and cannot work from home.

The Leave Support Scheme provides for employees who would be working (i.e. essential workers) who are required to self-isolate and cannot work from home. A flat rate of $585.80 per week for full-time workers (more than 20 hours/week) and $350 a week for part-time workers (less than 20 hours/week) is paid.

The small business cashflow scheme also supports small to medium businesses and organisations struggling with a loss of actual revenue due.

Remember too that employment law rights and obligations continue. Employers must act in good faith and meet their obligations to be fair and reasonable, and to comply with statutory obligations to staff in respect of wages and leave.

There are also resources available to support the wellbeing of business-people and your teams. Don’t be shy on using these. 

We appreciate that the re-emergence of Covid-19 and associated Level 4 lockdown has creates stress and much uncertainty. Business planning, including cashflow management is critical. 

Please don’t hesitate to ask for support from our team of experts at DTI Lawyers who can help you to navigate through these challenging issues. We have a network of trusted business professionals who we can also refer you to if your query sits outside specialised legal advice.

You can reach us by phone on 07 282 0174.