24 February 2022
New financial support for businesses
On 21 February 2022, a new targeted COVID-19 Support Payment (CSP) was announced for businesses struggling with revenue during the Omicron outbreak.
The CSP is a payment to help support viable and ongoing businesses or organisations which have experienced a 40% or more drop in revenue as a result of 1 or more of the following COVID-19 circumstances:
- the widespread presence of COVID-19 in the New Zealand community
- the legislative public health measures taken in order to reduce the spread of COVID-19 in the New Zealand community
- any business circumstances that are, or are reasonably likely to be, a consequence of the circumstances described above.
Three fortnightly CSPs will be available with applications opening for the first payment at 8am on 28 February 2022 for the period starting from 16 February 2022.
Each CSP will be $4,000 per business plus $400 per full-time employee (FTE), capped at 50 FTEs or $24,000.
The maximum size of the CSP your business or organisation may be eligible to apply for, depends on the number of FTEs you have, and your level of revenue. Businesses or organisations with low revenue will have their payment capped at 8 times their actual decline in revenue.
To be eligible for the CSP a business or organisation must:
- have experienced the revenue decline of 40% or more as a result of 1 or more COVID-19 circumstances (as detailed above)
- have been operating the business or organisation for a period of at least 1 month before 16 February 2022 – if you have acquired a business or organisation after 16 January 2022, you may still be eligible for the CSP
- have taken all reasonably practicable steps (if any) to minimise revenue losses
- been operating in compliance with the COVID-19 Vaccine Certificate requirements (pursuant to COVID-19 Public Health Response (Protection Framework) Order 2021), for both the comparator period and the affected revenue period
- not have received, have an application pending for, or apply for or receive in future, a grant under the Cultural Sector Emergency Relief Fund: Grant for Self- Employed Individuals administered by Manatū Taonga – Ministry for Culture and Heritage (further details on this will be provided soon)
- be living, or (if a non-natural person) registered or otherwise established in New Zealand.
Drop in revenue
Businesses and organisations need to measure their revenue over a period of 7 consecutive days in the affected revenue period where the business or organisation has had a drop in revenue due to the COVID-19 circumstances detailed above.
To get the first payment you will need to show income is 40% lower in a 7-day period any time from February 16, compared to a typical 7-day period between 5 January 2022 and 15 February 2022.
The dates of the affected revenue period for the second and third payments are still to be decided.
The affected revenue period and the comparison period must be calculated based on what has happened, not a forecast of what might happen. If the revenue drop you have calculated is 40% or more you may be eligible for CSP.
If your business or organisation is part of a commonly owned group, the 40% revenue drop needs to be satisfied by you and by the group as a whole.
Businesses or organisations with highly seasonal revenue may still be able apply for the CSP. Further details for businesses with seasonal revenue will be provided soon.
Recently acquired businesses
Businesses that changed ownership after 16 January 2022 may be able to apply for a CSP.
To get a CSP, the business:
- needs to meet the CSP criteria.
- must have been operating for at least 1 month before 16 February 2022.
- activity must remain largely the same as before the change in ownership.
Pre-revenue businesses or organisations
If your business or organisation has taken active steps towards being market ready but has not yet begun trading, you may be eligible for the CSP. A pre-revenue business or organisation may be eligible if both of the following apply.
- They have had a minimum 40% drop in their ability to raise capital over a 7-day affected revenue period (7 days in a row) as a result of 1 or more COVID-19 circumstances.
- They meet the other CSP eligibility criteria.
Example – Revenue drop
Sparkle Electrical does urgent electrical repairs. Some of Sparkle’s staff have to isolate due to contracting COVID-19 and Sparkle is not able to offer some of their on call services.
In the 6 weeks before 15 February, Sparkle earned between $10,000 and $12,000 every 7 days. A typical 7 day of revenue is $11,000. In the 7 days from 16 February they were only able to earn $4,000. Sparkle has had a revenue drop of 64%. If Sparkle meet the other eligibility criteria they can apply for the CSP.
Source: IR – 24 February 2022