COVID-19: Some business support gets a red light

As we farewell the “Alert Level” system on Friday 3 December 2021, we inevitably farewell some of the business support options which have a link to Alert Levels. The Wage Subsidy requires part of New Zealand to be at Alert Level 3 and the Resurgence Support Payment requires part of New Zealand to be at Alert Level 2; the 4 tier Alert Level system doesn’t easily collapse into a traffic light system.

The Government has advised that there will be some transitional support available, but to date the details are limited. What we do know is that support is likely to be more targeted toward “red areas” and there may be a “transition grant” made, focused on Auckland businesses. Work is being done to consider whether businesses which could, but do not, use vaccine certificates should continue to be eligible for business support.

The Taxation (COVID-19 Support Payments and Working for Families Tax Credits) Act 2021 was tabled in Parliament on 23 November 2021 and enacted on 25 November 2021. It introduces an ability for the Governor-General, by Order in Council, to authorise grants to be made to eligible persons financially affected by a public health measure, business circumstance or a matter related to COVID-19.

While we await further details of what support will actually be available, it’s important that businesses consider whether they have a need for further support, and whether (if they’ve not claimed to date) applications should be made for the existing support.

It’s important to note that applications for the first 3 rounds of the Resurgence Support Payment close on 1 December 2021, and rounds 4 – 6 close on 13 January 2022. The closing date for the Transitional Payment is 13 January 2022.

The Wage Subsidy

An eighth round of the Wage Subsidy opened on Friday 26 November and applies where there is a 40% reduction in revenue between 23 November – 6 December 2021 due to Alert Level 3 settings or the application of the COVID-19 Protection Framework in Auckland.

The wage subsidy settings have remained steady throughout the eight rounds of the scheme. Our previous articles summarise how the Wage Subsidy works.

With the move into the COVID-19 Protection Framework on Friday 3 December, it’s unclear whether there will be further rounds of the Wage Subsidy. If there are, the settings will need to change to no longer refer to Alert Level 3. Many businesses will be hoping for a post lockdown surge in sales, meaning there may be fewer businesses who will be eligible requiring any ongoing support. The number of businesses claiming the wage subsidy has been steadily declining, the following table outlines the claims made for the six rounds of the Wage Subsidy which have been completed to date:

Wage Subsidy Round


Total applications


Approved applications


Amount Paid ($000)


























































*Claim data is available from the Ministry of Social Development each week, the data above is updated as of 19 November 2021.

COVID-19: Some business support gets a red light

Resurgence Support Payment

The Resurgence Support Payment (RSP) has gone through a number of changes during this outbreak. Originally it was intended to be a single payment but has instead has had six rounds of payments available. The value of the RSP doubled from the fifth round.

Details of the RSP eligibility criteria are available here.

RSP payment


Revenue loss period


Payment amount


Application closing date




17 August 2021 – 1 November 2021


$1,500 + $400 per FTE


1 December 2021




8 September 2021 – 1 November 2021


$1,500 + $400 per FTE


1 December 2021




1 October 2021 – 1 November 2021


$1,500 + $400 per FTE


1 December 2021




22 October 2021 – 1 December 2021


$1500 + $400 per FTE


13 January 2022




5 November 2021 – 1 December 2021


$3,000 + $800 per FTE


13 January 2022




19 November 2021 – 1 December 2021


$3,000 + $800 per FTE


13 January 2022


Transitional Payment


3 October 2021 – 9 November 2021


$4,000 + $400 per FTE (maximum 50 FTEs)


13 January 2022


As of 18 November the following amounts have been paid out under the first five rounds of the RSP:

RSP payment


Number of customers


paid ($000)
































Other support

The existing Small Business Cash Flow Loan Scheme, Leave Support Scheme and Short-Term Absence Payment should remain available for businesses to access, these schemes are not directly connected to the Alert Level framework.


As New Zealand gradually returns to a more “normal” state, it’s important that businesses which have accessed either the Wage Subsidy or the RSP ensure that they have met all the relevant eligibility criteria. The Wage Subsidy, in particular, has been run on a high-trust model and businesses were able to claim the subsidy on the basis of anticipated revenue losses. A number of subjective criteria also need to be satisfied for both the Wage Subsidy and the RSP. We’ve found in many instances that minimal effort has been put toward documenting eligibility beyond the objective revenue loss test. It is a requirement of both schemes that evidence is prepared and held available for review.

Given all receipts of the Wage Subsidy and the RSP can be seen on public registers, those who have claimed these payments should be verifying entitlements and making repayments to the extent eligibility criteria have not been met. Obviously, all claims could be reviewed by either the Minister of Social Development or Inland Revenue, but we’ve also seen an increasing number of businesses having claims queried as part of external audits and also when a business sale is being contemplated. We strongly urge everyone to ensure documentation is in place. You can read more about getting audit-ready here.

Rental Agreements: Ensure your GST housing-keeping is in order

Since the advent of COVID-19 lockdowns, many businesses have suffered significant downturns in their revenue and several landlords have granted reductions to commercial rental charges to assist their commercial tenants. In addition, many commercial tenants have disputed the amount of rent that they are required to pay to their landlords. In light of this, it is important not to forget about GST on rental payments as it can often add significant unforeseen costs as well as penalties and interest if ignored.

Many commercial landlords will be on the invoice basis, where a GST output obligation is imposed at the earlier of when an invoice is issued, or payment is received. Importantly in the COVID-19 environment for GST invoice basis landlords, it is irrelevant if your client has not paid and is disputing the amount, if a valid invoice has been issued, GST output is still payable by the landlord to Inland Revenue.

Frequently for commercial rental charges, a “perpetual invoice” would have been issued at the start of the lease, setting out the rental payments and when they fall due.

If adjustments are agreed between the parties to reflect changes in rental payments, a GST credit or debit note must be issued. The requirements for a credit or debit note are similar to a GST tax invoice with the required ‘tax invoice’ wording replaced with ‘credit note’ or ‘debit note’.

Changes proposed in the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Bill signal a move away from paper-based invoicing systems, and changes to the requirements for credit and debit notes. But there will still be a need to communicate the adjustments if earlier information showing a higher amount of GST payable had been issued by the landlord.

It is also important to consider the accounting implications for the lessor, due to the reduced rental income over the term of the lease.

For more information contact your usual Deloitte advisor.

Did you find this useful?