Wage Subsidy vs Resurgence Support Payment In NZ

Because everyone is at home during the Level 4 lockdown, financial help is made available to businesses based on their circumstances. Check out the financial assistance schemes, including resurgence support payment and wage subsidy schemes.

All kinds of financial help can be paid during the highest alert level in response to COVID-19 except at alert levels 1 and 2.

“We have over $1 billion left over from the money set aside for wage subsidy scheme and resurgence support payments and if needed, the Covid-19 Relief and Recovery Fund has around $5 billion in it,” Finance Minister Grant Robertson said.

Let's look at the differences between a Wage Subsidy and Resurgence Support Payment (RSP) for businesses and employees.

	Wage Subsidy	Resurgence Support Payment
What	Supports employers to pay employees and protect jobs for affected businesses	Supports viable and ongoing businesses or organisations due to an alert level increase to Level 2 or higher Business is facing a decrease in revenue because of the alert level increase
Who can apply	Employers, sole traders, self-employed	Business or organisation who experienced a 30% drop in revenue over a 7-day period after an alert level increase and meet other eligibility criteria Seasonal businesses had a 30% decline in income when compared to a similar week the prior year
Where to apply	Ministry of Social Development	Inland Revenue
Frequency	Weekly payment	One-off payment
Repayment	No, provided that you don’t fall under the following: Failed to meet the criteria for the subsidy Failed to predict a 40% decline in revenue Failed to meet the obligation to use the subsidy to retain and pay your employees Received insurance (e.g. business continuity insurance) for any costs covered by the subsidy) Provided false or misleading information in your application	No

Wage subsidy payment rates

Full-time employee retained 20 hours a week or more: $600 a week

Part-time employee retained less than 20 hours a week: $359 a week

Payments are given as a two-week lump sum that started last August 20 and is still ongoing until NZ remains to be in Alert Level 4.

Criteria:

Registered business, sole trader or self-employed based in NZ; and each employee is named in the wage subsidy application
Registered charity/society incorporated in the Incorporated Societies Act 1908 and/or in the Charities Act 2005
A non-government organisation, post-settlement governance entity or, under specified circumstances, or a commonly-owned group
Must not be receiving payment under Short-term Absence, Leave Support, Essential Workers Support in respect of any of the employees named in the application
Meets the revenue decline test with at least a 40% decline over the revenue test period between August 17, 2021 and August 30, 2021
Evidence to support the decline in your revenue was due to the Alert Level 4 announcement
The reason for your claim that your business is seasonal; how this made meeting the 40% revenue reduction using the default comparator period more challenging than if your business was not considered seasonal

Source: Work and Income NZ

Resurgence Support Payment Rates

Factors in determining RSP amount:

Full-time equivalent employees (FTEs)
Level of revenue

The RSP is calculated as $1,500 plus $400 per full-time equivalent employee or FTE (up to 50 FTE).

Maximum payment: $21,500.

Sole traders: up to $1,900.

Employees working up to 20 hours per week are considered part-time (0.6 FTE)
Employees working 20 hours or more per week are considered full-time (1.0 FTE)

Payments to businesses with low revenue will be capped at four times the amount by which their revenue has decreased during the past 7 days.

Criteria:

A decrease of revenue of at least 30% due to the increase in alert level
In business for at least 6 months
Business is viable and ongoing
Charities and not-for-profit organisations, provided they meet the other eligibility requirements (see Inland Revenue for details)
Income that is received passively, not including the interest and dividends, and all forms of residential and commercial rent
Business is based in New Zealand
Applicants are 18 years or older
Businesses and organisations (including sole traders) must have a New Zealand Business Number
State sector organisations are excluded from the RSP - can apply to the Minister of Finance to get approval for RSP