As most of you have heard on the news, the government recently announced a new financial support for businesses affected by the Omicron outbreak.
We have finally got details of this and it is called the Covid-19 Support Payment (CSP). There are 3 CSPs over 3 fortnights available to businesses who are eligible with the amounts being:
$4,000 per business plus:
$400 per full-time employee (FTE) capped at 50 FTEs
Maximum CSP is also limited to your level of revenue. If you have low revenue, the CSP will be capped to 8 times of actual decline in revenue
The first CSP payment opens at 8am Monday, 28th of February 2022.
The main criteria for businesses to be eligible for the CSP are:
Revenue decline of 40% or more as a result of 1 or more COVID-19 circumstances as follows
- 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
- business who cannot operate to usual levels due to staff self-isolating
- business impacted by NZ based supply chain disruptions (Covid-19 related)
- Lower retail and recreation movements due to customers working from home or self-isolating (eg CBD).
- any business circumstances that are, or are reasonably likely to be, a consequence of the circumstances described above.
Revenue decline has to be satisfied by the whole group if your business is part of a commonly owned group.
Has been operating for at least 1 month before 16 February 2022 (if you have acquired a business after 16 January 2022, you may still be eligible for the CSP.
Have taken all reasonably practicable steps (if any) to minimise revenue losses.
Have been operating in compliance with the COVID-19 Vaccine Certificate requirements for both the comparator period and the affected revenue period.
Covid Support Payment period (and Affected Revenue Period)
1st CSP payment open for period from 16/02/2022 - 4/04/2022
2nd CSP payment open for period from 07/03/2022 - 4/04/2022
3rd CSP payment open for period from 21/03/2022 - 4/04/2022
Please note that all 3 CSPs have to be applied by 5th May 2022
How to calculate the revenue decline
Calculate the income for a continuous 7-day period within the Affected Revenue Period as above depending on which CSP you are applying for.
Calculate the income of a typical 7-day period between 05/01/2022 - 15/02/2022 or between 05/01/2021 - 15/02/2021 (Comparator Period)
If you are a seasonal business, you can also use a 7-day period before 5 January 2022 and past year eg comparing 7-day in Mar 2022 to 7-day in Mar 2021
If the Affected Revenue Period is >40% lower than the Comparator Period, you will be eligible for CSP
Note - Affected Revenue Period is calculated based on actual income and not a forecast - similar to the RSP
Example of Revenue Drop as provided by IRD:
If you have a recently acquired business or you are a pre-revenue business, you may still be able to qualify. Please contact us and we'll be able to advise if you are eligible or not (or read the full details from IRD below).
A few things to note on the CSP:
"Typical" revenue is revenue during the 7-day period that is representative of the businesses' revenue ie not affected by Covid. You can choose to average your revenue over the 6 weeks periods and then choosing a 7-day period that is closest to the average.
For businesses that doesn't have daily sales eg service industry, IRD will look at the activities carried out during those period and not necessary the invoices.
For full details of the CSP eligibility and other details, please click on this link.