This FAQ pertains to IRD’s support for self-employed contractors, freelancers, and sole traders in New Zealand as related to the Coronavirus (COVID-19).
For medical questions related to the COVID-19, please refer to the Ministry of Health’s questions and answers page.
If you have a medical emergency, please seek help from Emergency Services or dial 111.
If you believe you may have COVID-19, please refer to the Ministry of Health’s COVID-19 (novel coronavirus) – health advice for the general public. They have been asking people to call the dedicated COVID-19 0800 Healthline (0800 358 5453) before seeking out medical care.
TL;DR
Prefer a quick summary? We have a TDLR down at the bottom. =)
What support is available for sole traders?
Resurgence Support Payment
Amount - upto $1900
The resurgence support payment is designed to help cover any decrease in revenue your business has experienced due to increased alert levels.
This payment is available to sole traders who have experienced a 30% drop off in revenue or capital raising ability over a 7-day period due to Covid-19 the increase in alert levels. The decrease in revenue will be determined by comparing revenue to a typical 7-day revenue period in the 6 weeks prior to the increase in alert level. You can find further information on eligibility here.
Wage Subsidy Scheme
Amount - upto $600 per week
The Wage Subsidy Scheme is designed to help businesses and self-employed individuals subsidise employee wages while experiencing reduced revenue due to increased alert levels.
For self-employed individuals, employee wages include the wages they pay to themselves.
The Wage Subsidy Scheme can be claimed by registered sole traders who are not claiming the ‘Short-term Absence Payment’ or ‘Leave Support Scheme’. You will have to prove that the alert level changes have led to a 40% decrease in revenue compared to a comparative previous period. If you are eligible, you will be able to claim up to $600 per week to help cover wages that have been affected by Covid alert levels. Applications will be open from Friday, 20 August 2021.
Unlike the Resurgence Payment, the Wage Subsidy does not have an explicit requirement to have been in business for a certain length of time; however, you do have to prove at least a 40% decrease in revenue against a comparable 14-day period from the 6 weeks prior to the move to Alert Level 4.
Note that some sole traders WILL be eligible to claim BOTH the Resurgence Support Payment and the Wage Subsidy Scheme. Claiming one does NOT make you ineligible to claim the other.
Short-term Absence Payment
Amount - $350
The Short-term Absence Payment is designed to cover costs associated with having to self-isolate while waiting for the outcome of a Covid-19 test or have been ordered to self isolate as a result of being a close contact. This payment is $350 and can be claimed through MSD.
Short-term Absence Payment
Amount - Up to $585.80
This scheme is designed to assist self-employed people who have been advised to self-isolate and cannot work from home. This scheme can allow you to claim upto $585.80 per week. More information can be found here.
Resurgence Support Payment FAQs
Who can get it?
Sole traders who have been in business since the 17th of July and have seen a 30% decrease in revenue due to the alert level increase. Passive income such as rent, dividends, and interests is excluded from this measurement of revenue.
To demonstrate you have taken a 30% decrease in revenue, you must compare a full 7-day period under Covid increased alert levels with a typical revenue week from the 6 previous weeks.If your revenue has decreased by 30% and you meet other criteria, then you are likely to be eligible.
You must also be over 18 years old and have a NZ business number. If you do not currently have a NZBN you can easily apply for one for free here.
How much can I get?
Sole traders can receive a payment up to $1,900. There is a base amount of $1,500 and then you can get an additional $400 per week. These payments are not subject to income tax.
How do I apply?
You can apply for it on the IRD website here. You will need a NZBN number, your name and IRD number, bank account number and details proving your drop in income. Once filled out you should receive the payment within 5 working days.
I’ve only been trading for 3 weeks and with the lockdown beginning tomorrow is there any possible government funding I can apply for that will help with the loss of earnings for such a new business?
At this stage funding is only available for those who have been trading for 6 months prior to the increased Covid alert levels.
Looking at the Covid 19 resurgence payments and it says you must have a NZ business number - I’m pretty sure I don’t have one?
Yes, a NZBN is a requirement for the resurgence payments. You can easily apply for the NZBN for free here. As long as you supply a valid NZ Drivers Licence or Passport whilst applying, this application should be processed immediately.
It is saying that you can only apply 7 days after an alert level change, just wondering if you guys knew more about the process.
Because you have to compare revenue from a 7-day period under increased alert levels (and all 7 of those days must be under an increased alert level) to a previous 7-day period, the earliest you can apply for the resurgence support payments is 7 days after the start of the increased alert levels.
Do you apply for this for us, or do we have to do this ourselves?
You will have to apply for this assistance yourself through the IRD website here. We highly recommend putting this money straight into your own personal bank account rather than your Hnry Account as this payment is not subject to income tax.
Wage Subsidy Scheme FAQs
Who can get it?
Self-employed individuals will have to be able to prove, among other things, the following:
- That you operate a business in New Zealand and the person claiming lives in New Zealand
- That you meet the revenue decline test due to increased alert levels (decrease of 40% in revenue compared to a 14-day period from the 6 weeks prior to the move to Alert Level 4).
- You are not receiving any other Covid support schemes with exception to the ‘Resurgence Support Payment’
How much can I get?
A maximum of two weeks worth of payments are available at this time. How much you can get per week depends on if you work full or part time.
- If you work over 20 hours a week you are considered full time and can claim $600 per week
- If you work under 20 hours a week you are considered part time and an claim $359 per week
How do I apply?
You can apply on the Work and Income site here. Applications will be open from 9am on Friday the 20th August. You will need your IRD number, business address, contact details, and bank account number. In some cases, you may have to phone IRD to prove that you are a self-employed person before MSD will process your claim.
Short-term Absence Payment FAQs
Who can get it?
If you are self-isolating due to a pending Covid test or as a close/secondary contact of a Covid case, then you may be eligible for this payment.You cannot apply for this if Covid testing is done routinely through your workplace, you are in managed isolation, or are overseas.
This cannot be claimed in conjunction with the wage subsidy or leave support scheme. A full list of requirements can be found here.
How much can I get?
This is a one-off payment of $350 regardless if you work part or full time.You may only apply for this once every 30 days.
How do I apply?
You can apply here. You will need an IRD number, bank account and business address and contact details.
Leave Support Scheme FAQs
Who can get it?
People who are sick with Covid, have been identified as a close contact by a health professional, or are considered ‘high risk’.
Similar to the Short-term Absence Payment, you must be based in New Zealand. This cannot be claimed in conjunction with the Wage Subsidy or Leave Support Scheme. A full list of requirements can be found here.
How much can I get?
How much you can get depends on if you are considered full or part time:
- If you work 20 hours or more per week, you are considered full time and can claim $585.80 per week.
- If you work less than 20 hours per week, you are considered part time and can claim $350 per week.
This payment only covers a two week timeframe.
How do I apply?
You can apply through the MSD website here. You will need your IRD number, contact details, business name and bank account number.
TL;DR
If you have to self-isolate due to contracting Covid, awaiting a pending Covid test, or being a close or secondary contact of a Covid case, then you should look into the Short-term Absence Payment or the Leave Support Scheme for financial support.
If you have been a sole trader since the 17th of July and have seen a 30% decrease in revenue, then you should check your eligibility for the Resurgence Support Payment. Please note that this will not be able to be paid in conjunction with the Wage Subsidy or Short-term Absence schemes.
If you are a sole trader and have seen a 40% decrease in revenue then you should see if you are eligible for the Wage Subsidy Scheme. Unlike the Resurgence Support Scheme, there is no requirement to have been a sole trader for a certain amount of time. The Wage Subsidy Scheme and Resurgence Support Scheme can be both claimed in conjunction if you meet the eligibility criteria.
If you are a Hnry customer you should apply for these subsidies all yourself through the relevant platforms. In the article above we link to the websites where the applications can be lodged.
Further Information to Come
Information on this is constantly updating so please ensure to visit here for more information as it comes about the Government support available to sole traders during these Covid-19 restrictions.
Stay inside, stay warm, drink lots of water and be kind. Kia kaha Aotearoa ❤️
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