The Government has announced a range of business support measures following the 17 August lockdown.
Government Support
Various government departments are updating their websites detailing support measures for businesses and workers.
We encourage you to re-visit the websites below regularly for updates.
Resurgence Support Payment
The Resurgence Support Payment (RSP) is a payment to help support viable and ongoing businesses or organisations due to a COVID-19 alert level increase to level 2 or higher.
Tax agents can apply for the RSP on behalf of their clients, if they confirm they have the authority to apply and hold a record of that authority.
Eligible businesses and organisations including self-employed people anywhere in the country can apply for the RSS if, because of the Alert Level increase, they incur a loss of 30 percent of revenue or a 30% decline in capital raising ability over a 7-day period compared with a typical 7-day revenue period in the 6 weeks prior to the increase from alert level. Eligible businesses may apply to receive the lesser of:
$1500 plus $400 per full-time equivalent employee, up to a maximum of 50 full-time employees (so up to a total of $21,500), and
four times (4x) the actual revenue decline experienced by the applicant.
Receiving any other Government COVID-19 support does not affect eligibility for the RSP. Applications open at 8am on 24 August.
APPLY FOR THE RSP AT IRD.GOVT.NZ
Wage Subsidy Scheme
The Wage Subsidy Scheme (WSS) is eligible to employers and self-employed people anywhere in the country can apply for the WSS if they expect a loss of 40 percent of revenue because of the Alert Level increase announced on 17 August 2021.
The WSS rates have been increased to reflect the increase in wage costs since the scheme was first used in March 2020. Businesses will be eligible for $600 per week per full-time equivalent employee, and $359 per week per part-time employee. Wage Subsidy payments for all eligible employees will be paid as a two-week lump sum. Applications open on Friday 20 August.
APPLY FOR THE WSS AT WORKANDINCOME.GOVT.NZ
Short-Term Absence Payment
The Short-Term Absence Payment (STAP) is available for businesses, including self-employed people, to help pay their workers who cannot work from home while they wait for a COVID-19 test result.
FIND OUT MORE ABOUT THE STAP AT WORKANDINCOME.GOVT.NZ
Leave Support Scheme
The Leave Support Scheme (LSS) is available for employers, including self-employed people, to help pay their employees who need to self-isolate and can't work from home.
FIND OUT MORE ABOUT THE LSS AT WORKANDINCOME.GOVT.NZ
Small Business Cashflow Loan Scheme (SBCLS)
The Small Business Cashflow Loan Scheme (SBCLS) is for viable businesses and self-employed people with 50 or fewer full time equivalent employees that have been in business for 6 months or more, and have experienced at least a 30 percent decline in actual revenue may be eligible for a loan under the SBCLS.
The loan must be used to pay for core operating costs of your business or organisation or capital costs that are intended to help your business adapt to the circumstances arising because of COVID-19. Applications for the scheme are open until 31 December 2023.
FIND OUT MORE ABOUT THE SBCLS AT IRD.GOVT.NZ
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Coronavirus (COVID-19) and the workplace
Guidance for employees, employers and businesses.
For information on what alert level New Zealand is currently at and general guidance for different alert levels, visit the COVID-19 website(external link)
Employment guide for workers at different Covid alert levels
Business.govt.nz has more guidance for businesses operating at different alert levels.
Workplace operations at COVID-19 alert levels – Business.govt.nz(external link)
General guidance for workplaces
Talk to us.
We can help you with your tax obligations, so you can focus on your business.
#businessadvisory
Self Employed or a Contractor ??
please read on
WHAT IS ACC COVER PLUS? AND ACC COVER PLUS EXTRA?
Once you move into the self-employed space things can get a little trickier with ACC and that is where ACC Cover Plus and ACC Cover Plus Extra come in to play.
ACC Cover Plus.
ACC Cover Plus is basically the self-employed version of ACC cover. The rate of cover provided, what is covered and the services available are all the same as ACC. What changes is how you pay your levy and how your cover for lost earnings is decided.
When you are an employee your ACC levy is automatically deducted from your income, however when you are self-employed you are invoiced each year by ACC according to your previous years income and your industry. This means your ACC invoice can vary from year to year depending on your income or if you change industries.
When you are an employee and you lose your income due to an injury there is a very clear line as to what that lost income would be – your wages or salary. Self-employed incomes can fluctuate dramatically from month to month or year to year and this can cause some challenges and uncertainty when trying to get covered by ACC.
New Zealanders are lucky to have access to ACC, and with ACC Cover Plus even as a self-employed person you are covered. However there are two main areas that ACC Cover Plus can be challenging. The first is with the levy based on the previous financial year’s income there is uncertainty each year as to what it will be. Secondly the uncertainty around cover with a fluctuating income can leave self-employed people more vulnerable.
This is where ACC Cover Plus Extra comes in.
ACC Cover Plus Extra
With ACC Cover Plus Extra you agree with ACC on a level of cover for lost earnings, to suit your personal circumstances. This means if you make a claim there is no need to prove your earnings, as the weekly compensation has already been agreed. It also means you know what your ACC levy will be each year which makes financial planning smoother.
Moving on to ACC Cover Plus Extra puts you back in control of your premiums, puts you in control of what you get paid at claim time and gives you peace of mind regarding what you will get paid.
Is there a better way of managing risk for the self-employed?
ACC is an expensive type of cover when compared with private insurance. And as we covered in the previous ACC blog there are some gaps with regards to illness and degeneration and we gave some recommendations on plugging those. The same is true for the self-employed and moving onto ACC Cover Plus Extra is the first step to make things easier.
The next step, which we often recommend to clients where suitable, is to reduce their ACC cover to the absolute minimum, which can be done with ACC Cover Plus Extra, and take on income protection and mortgage protection to top it up to adequately cover their income, should they be unable to work for any reason.
There are three main benefits to taking this approach.
As ACC only covers accidents taking this approach means you will also be covered in case of illness, and if ACC declines to cover your injury on the basis of degeneration.
More cover for less – taking this approach can save you money on premiums.
Peace of mind – you know how much cover you have and you know that you are covered regardless of the circumstances of your lost income.
We have had clients who have income protection in place, but are also paying the default ACC Cover Plus Levy – essentially doubling up and paying twice. You can only claim on one of these so you shouldn’t be paying for both of them.
It is important to remember that reducing ACC Cover Plus Extra also reduces the entitlement for accidental death cover. This is where talking to one of our advisers is important so they can advise you of all the implications and how to best cover yourself.
If you are ready to review your ACC levy and make sure you have the most comprehensive cover in place, get in touch with us at mail@accountantshb.co.nz
Accountants Hawkes Bay Limited
27 Austin Street
Napier
+64 6 8434868
Accountants Bay of Plenty Limited
1179 Arawa St
Rotorua
Phone +64 7 3436452
