What is the RSP?
When there is an increase in COVID-19 Alert Levels, as was the case on 17 August 2021, the Government may activate the Resurgence Support Payment (RSP). The RSP is a payment to support viable businesses with their financial commitments if they have been impacted by the change in Alert Levels and meet the eligibility criteria.
The Minister of Finance has announced that eligible businesses and organisations can apply for six payments of the Resurgence Support Payment (RSP) for the Alert Level increase that started on 17 August.
Businesses and organisations are able to apply for all six payments. Applications for the first three payments closed at 11:59pm on 1 December 2021. Applications for the remaining three RSP payments will remain open until 11:59pm on 13 January 2022.
Eligible businesses can apply for the RSP as well as the Government’s COVID-19 Wage Subsidy Scheme.
How do I apply?
The RSP is administered by Inland Revenue (Te Tari Taake). Eligible businesses can apply here.
As part of the application process, businesses will be required to provide their NZ Business Number (NZBN). All registered companies in NZ will have an NZBN but other types of entities may not. Check your NZBN number or apply here. Applications may take a few days to process, so we suggest commencing as soon as possible.
How much can I claim?
Eligible applicants can receive the following:
1st - 4th RSPs:
$1,500, plus $400 per full time equivalent (FTE), up to 50 FTEs. The maximum payment is $21,500. Sole traders can receive up to $1,900.
5th and 6th RSPs:
$3,000 plus $800 per FTE (up to 50 FTE). The maximum payment is $43,000. Sole traders can receive up to $3,800.
An FTE is defined as an employee that ordinarily works 20 hours or more per week.
What is the test?
Applicants must have experienced a decrease in revenue or capital-raising ability of at least 30% over a continuous 7-day period (“affected period”), due to the increase in Alert Level.
The affected revenue periods for payments 4, 5 and 6 are:
4th RSP: 22 October 2021 to 1 December 2021.
5th RSP: 5 November 2021 to 1 December 2021 (payment at an increased rate).
6th RSP: 19 November 2021 to 1 December 2021 (payment at the increased rate).
For each of the 4th, 5th, and 6th RSPs, the affected revenue period ended on the close of the day before any area of New Zealand moves to the COVID-19 Protection Framework.
Applicants will need to document and be prepared to prove that they have suffered this decrease when compared with a typical 7-day continuous period in the 6 weeks prior to the increase in Alert Level 1 (“comparison period”).
The start date of the 7-day affected period is the date the increase in the Alert Level started, unless this Alert Level lasts for more than 7 days - in this case you can choose a different 7-day affected period, but it must be within the increased Alert Level.
Seasonal businesses and organisations are permitted to compare their 7-day affected period decrease against a continuous 7-day period that is at a similar point in their seasonal cycle for a year prior to the revenue drop.
If the applicant is part of a commonly owned group, then this test needs to be satisfied across the group as a whole.
Am I eligible?
It is important that applicants ensure the eligibility criteria specific to each payment are met before applying. Businesses that were eligible for a previous payment, might not be eligible for subsequent ones.
There are other eligibility requirements aside from the revenue/capital raising test noted above:
- Businesses and organisations that have been operating for at least one month prior to the Alert Level increase on 17 August 2021 will be eligible to apply for the payment.
- The business or organisation must be considered viable and ongoing
- Charities and not-for-profits can apply
- Passive income is excluded from the revenue test (i.e. interest, dividends, residential and commercial rents)
- Applicants must be aged 18 or more
Each business or organisation in a group is eligible for the RSP if they and the group as a whole meet the test and criteria noted above.
How is the RSP treated for tax?
The payment received is non assessable for income tax purposes, but equally the expenses it covers are non-deductible.
Applicants that are registered for GST will need to return GST of 3/23rds of the RSP funds received but will be able to claim 3/23rds of any costs covered by the RSP that include GST.
What else do I need to know?
Every business or organisation that receives the RSP will be publicly named in a register.
As is the case with the Wage Subsidy Scheme, it is essential that applicants take their time to ensure that they meet the eligibility requirements and document this carefully. Please contact your BDO adviser for help with this process and related RSP enquiries. You can also view our detailed RSP FAQs here.