Wage subsidy extension
The government have confirmed today the revenue requirement for the wage subsidy extension will be a 40% decline as compared to the closest period last year and not 50% as initially advised. The testing period needs to be any 30 days in the 40 days before your application date (can’t use any days before 10 May 2020).
Applications open 10 June. If you are applying for an employee you’ve received the previous wage subsidy for, you are unable to apply until the 12 week period has elapsed (recorded from the date of our application).
The main WINS information site and the government release is silent regarding access to this scheme for new companies (who do not have a prior year comparative), high growth entities (where the prior year would not provide an appropriate comparative) or pre-revenue R&D companies (who were able to include projected capital income to determine the level of decline). However, Employment New Zealand’s page confirms the new company and pre-revenue concessions made for the original wage subsidy scheme will apply to the extension. We anticipate further guidance next week and will circulate details as they become available. In the interim, please contact VCFO if you would like to discuss your options.
Applications for the original wage subsidy scheme or leave support scheme close on 9 June (next Tuesday); if you have suffered a 30% revenue decline due to COVID-19 in any month (or 30 day period) between 1 January and 9 June 2020 and you haven’t made as application yet, please contact us to discuss. Remember, there are options around the comparative period if you are a new company or in a high growth phase or if you are pre-revenue R&D entity. Please contact VCFO if you are unsure.
If you have received the wage subsidy but no longer meet the requirements, e.g., you do not have a 30% revenue decline after all, please contact us to discuss repayment options and requirements.
Small Business Cashflow Loans
The application period has been extended to 24 July. As a reminder, a summary of the scheme follows. Please contact VCFO if you have any questions or would like assistance to apply.
- Eligible firms have 50 or fewer full time equivalent staff (IRD are using the wage subsidy received (if applied for) as a reference)
- Up to $100,000 per applicant based on the number of employees; $10,000 plus $1,800 for each FTE up to 50
- Interest free if repaid in 1 year, 3% thereafter, max 5 year term
- No repayments for 2 years if required
- Eligibility criteria is as per the wage subsidy plus confirmation of a viable business
- Must be used for core business operating costs
- Administered by IRD, applications are made via MyIR