Struggling Businesses Offered a Lifeline

lifeline for struggling business

Finance Minister Grant Robertson has announced a new six-week payment will be available to Omicron-affected businesses from March.

To be eligible, businesses must be able to show a 40 percent drop over seven days within the six weeks prior to the February 15 shift to the current second phase of the Government's Omicron plan.

Each COVID Support Payment will be $4000 per business plus $400 per full-time employee, capped at 50 employees or $24,000. It's the same rate as the most recent Transition Payment available to businesses last year to help with the transition to the COVID-19 Protection Framework or 'traffic light' system.

“It will be available on a fortnightly basis for six weeks - so three payments in total," Robertson said.

"This reflects the international experience that the peak of the Omicron outbreak should pass after about six weeks. We will continue to closely monitor the situation and have the option to extend the payment if this if necessary."

The previous Resurgence Support Payment, designed to help businesses with their fixed costs, only required businesses to show a 30 percent revenue drop.

"We have set a higher threshold in terms of revenue loss than previous support in order to target those most affected," continued Robertson.

"We looked closely at whether we could offer sector-specific packages but the definition of who is in what sector, and the need for cashflow to be provided quickly, meant that was not a feasible option to reach the most affected."

The Resurgence Support Payment dished out $2.2 billion to businesses. Coupled with the wage subsidy scheme, the Government has so far supported businesses and workers with over $6.9 billion since the Delta outbreak began in August 2021.

Support to be off work while isolating or to take leave while waiting for test results, currently provided by the Leave Support Scheme and the Short-Term Absence Payment, will remain available under all levels of the traffic light system.

Revenue Minister David Parker said changes were also being made to the Small Business Cashflow Loans Scheme to increase the amount of funding available to eligible businesses through the introduction of a 'top up' loan. Interest will now only start accruing at the beginning of year three.

"We are also extending the Commissioner of Inland Revenue's ability to apply flexibility for tax payment dates and terms to assist firms with cashflow pressures," Parker said.

Businesses struggling to pay tax because of the impacts of COVID-19 can contact Inland Revenue to check if they can delay starting payments to a later date, or if any part of the tax could be written off.