Yesterday the Government unveiled its $12.1 billion support package for businesses affected by Covid-19. Below we set out the highlights and provide some details of the key measures:
- $5.1 billion wage subsidy package
- $2.8 billion towards benefit increases
- doubling of the Winter Energy Payment
- $2.8 billion for tax changes to free up cash flow
- $126.5 million for a Covid-19 sick leave scheme
- $500 million towards the health industry, and
- $600 million towards the aviation industry
Wage subsidy package
The wage subsidy package is available from March 17 for any employer or self-employed person who has suffered, or is projected to suffer, a 30 per cent or more drop in revenue compared to any months between January 2019 and June 2019.
$585 per week will be available for full-time workers and $350 per week for part-time workers for a period of 12 weeks, with the maximum amount an employer can receive being $150,000.
Employers must declare that they will use their best endeavours to continue to employ affected employees at a minimum of 80 per cent of their income for the next 12 weeks. Employers must also have taken active steps to mitigate the impact of Covid-19, such as engaging with their banks or financial advisors.
Apply for the wage subsidy here.
Leave and self-isolation support
Leave and self-isolation support will be available for employees and self-employed for 2 weeks at the same rates as the wage subsidy package for people caring for others who have Covid-19 and for people in self-isolation. People with Covid-19 will have support for the entire period of their sickness. The leave and self-isolation support will however not be available for those who can work from home. Nor will the self-isolation payments be available to people who leave NZ after March 16 and return.
Apply for the leave support here.
- Depreciation deductions will be reinstated for commercial and industrial buildings
- The low-value asset threshold will increase to $5,000 for one year, then drop to $1,000
- From 1 April 2020 the provisional tax threshold will rise to $5,000
- Use of money interest will be waived for those taxpayers unable to make payments due to Covid-19
- Starting 1 April, benefits are increasing by $25 a week
- Working for families with children who are not receiving a main benefit and have some level of employment income each week will no longer have to satisfy the hours test to receive the In-Work Tax Credit
- The Winter Energy Payment will increase to $40.91 per week for single people and $63.64 per week for couples and people with dependents for 2020 only
- Working capital support is being looked at for small and medium businesses and tailor-made support for larger businesses
The Government’s May Budget will now be a ‘recovery budget’ and will contain further support measures.
If you would like to discuss any of the above, or how Covid-19 is impacting your business, please contact your Hayes Knight Advisor.