2021 Covid-19 Resurgence Support Payment

With Auckland now in Level 2 till at least Monday 22 February, the Government has now activated the Resurgence Support Payment. Applications can be made from Tuesday 23 February 2021.

What is the Resurgence Support Payment

The Resurgence Support Payment (RSP) is a grant made to viable, eligible businesses with reduced revenue due to a COVID alert level increase.

 

Key Eligibility Criteria for the RSP

A business must have experienced at least a 30% drop in revenue or 30% decline in capital-raising ability over a 7-day period at the raised alert level, compared with a typical 7-day revenue period in the 6 weeks prior to the increase in alert levels.

• The Businesses must have been in operation for at least 6 months
• It must be considered viable and ongoing.
• Commonly owned companies must calculate the revenue drop for the group as a whole

 

RSP Payment Amount 

The amount your business may be eligible for will depend on the number of Full Time-Equivalent Employees (FTE) and your level of revenue.

The payment will be the lower of:

• Base payment of $1500 plus $400 per FTE (up to 50 FTE). The maximum payment is $21,500 or
• Capped at four times (4x) the amount of revenue dropped over the 7-day period.

 

Other notes about the RSP

• There is no restriction on what the funds can be used for.
• GST registered businesses will need to return GST on the payment received.
• Any size business can apply for the resurgence support payment.
• The resurgence support payment is governed by the Tax Administration Act. This means Inland Revenue can undertake audits. Any overpayments will be subject to the usual penalties and use of money interest regime.
• The resurgence support payment is provided once every time restrictions are put in place. Accordingly, a business could apply for the resurgence support payment now, and then if restrictions were put in place again in, for example, six months’ time, they would be able to apply for the resurgence support payment again.
• Unlike previous subsidies, applications are made through myIR (not MSD), so applicants will need to register through the IRD website if they don’t have one of these.
• Record-Keeping – Make sure you keep a record of your calculations including: Dates of the affected revenue period and comparison period, Amount of revenue earned in each period and How the revenue drop has been calculated.

If you have any queries about the Resurgence Support Payment please get in touch. Business Like NZ has been providing professional, yet affordable tax and business advice to the Auckland region and beyond for years!