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Update to the COVID-19 Support Payments and The Small Business Cashflow Loans – March 2022: WK Strawbridge Advisors and Accountants

COVID-19 Support Payment Update

The IRD has released an update on COVID-19 support (CSP) payments.

Firstly, from 8:00 am this morning (14/3/22) it is now possible to use a typical week between 5 January and 15 February 2021 as the revenue comparison period for any of the three CSP payments.

Secondly, the periods for the 2nd and 3rd CSP payments have been announced:

  • The second period starts on 7 March and applications opened this morning.
  • The third payment is for the period beginning 21 March, and applications will open 8 am on the 28th of March.

It has now been announced that applications for all 3 payments will close on 5 May 2022.

CSP – covid circumstances

There has been some confusion and controversy about which circumstances qualify for the CSP payment.  The IRD website contains updated guidance on what is or isn’t a “Covid-19 circumstance” as set-out below:

“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 public health legislative 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.

The COVID-19 circumstances include but are not limited to:

  • businesses not being able to operate to usual levels due to staff having to self-isolate
  • businesses impacted by New Zealand based supply chain disruptions
  • lower retail and recreation movements in a region (for example in a CBD) due to customers working from home or self-isolating.

They do not include circumstances where businesses, which are able to operate under the Red setting of the COVID Protection Framework, but have chosen to close temporarily without taking all reasonably practical steps to minimise their revenue losses. Additionally, they also do not include business circumstances that are a result of any border restrictions imposed or any overseas related impacts of COVID-19 such as global supply change issues, lack of overseas travellers or customers.”

The final paragraph above is a controversial and non-sensical restriction on applications by businesses that are clearly affected by Covid and the Government’s response to Covid.

As the IRD guidance changes frequently, please follow the link below for the latest IRD guidance.

Small Business Cashflow Loans

The changes to the SBCS scheme will take effect from 8:00 am on the 21st of March.

The main change taking effect next Monday is that businesses can borrow an additional $10,000.  This applies to new and existing borrowers.  Existing borrowers can apply for a top-up of $10,000.

The other change is the automatic extension of the interest-free period for another year.  No action is required for this.

Applications will remain open until 31 December 2023

Source:  https://www.wkstrawbridge.co.nz/blog/update-to-the-covid-19-support-payments-and-the-small-business-cashflow-loans-march-2022/

 

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