Eligibility for the Resurgence Support Payment (RSP)

Bright Spark Electrical does wiring for businesses. During the increased alert level period, they’re not able to work for one of their clients due to social distancing requirements. Because of this, their revenue dropped by 50% compared to the week before the alert level raise. Bright Spark can apply for the RSP as their drop in revenue is more than 30%.

Dimmer Electrical issued no invoices during the increased alert level period. Most of their clients are not affected by the increased alert level restrictions, and over this period, their billable hours are 90% of the typical week’s revenue from the 6 weeks before the alert level increase. Dimmer Electrical is not eligible for the RSP because it has not experienced a 30% reduction in its income generating activity.

Standard accounting principles for income recognition apply. For a business whose revenue is not consistent over each week, income needs to be spread over the relevant period.

Elena is the director of Dolphin Entertainment Tours - which is not a registered employer and has no employee. However, Elena receives a shareholder salary from the company and shows this in the company’s income tax return. Dolphin Entertainment Tours can apply for the RSP with Elena as one FTE.

Scott has 8 full-time and 4 part-time employees. To work out his total FTE, Scott does the following calculations.

• 8 full-time employees × 1 FTE = 8
• 4 part-time employees × 0.6 FTE = 2.4. This is rounded up to the nearest whole number, in this case 3
• 8 + 3 = 11 FTEs, Scott can apply for the RSP based for 11 FTEs.

Daniel and Jordan are the shareholders in 2 building companies, Mario’s Builders and Luigi’s Building Services. Daniel is a 60% shareholder in Mario’s Builders and Jordan is a 40% shareholder in Mario’s Builders.

For Luigi’s Building Services, Daniel is a 20% shareholder and Jordan is an 80% shareholder. As the 2 companies have the same shareholders, they are a commonly owned group.

Mario’s Builders and Luigi’s Building Services will apply separately for a Resurgence Support Payment. Each company should include all of their employees in their application. The 30% drop in revenue test is required to be satisfied at both the applicant level and across the commonly owned group as a whole.

The Scrumptious Cooking School runs 4 12-week cooking classes per year. These start in February, May, and October. Fees are paid before each class starts. Even though there was an alert level raise during October, the classes were able to run and no fees were refunded. The income for the class starting in October is spread across October, November and December. This means there is no reduction in revenue in October, and they are not eligible for the RSP.

Mountain Peak Adventure carries on a hotel business in Queenstown. In late June 2021 a number of its Australian based customers have cancelled their hotel bookings because they were no longer able to travel to New Zealand - due to the halt to the trans-Tasman Covid-19 bubble. Mountain Peak Adventure experiences a 30% drop in revenue as a result of these cancellations. 

A business is only eligible for the resurgence support payment if they have experienced a 30% drop in revenue due to the raise in Covid-19 alert levels which at that time was n the Wellington region on 23 June 2021. 
Mountain Peak Adventure’s 30% drop in revenue here is caused by the halt to the trans-Tasman Covid-19 bubble and was not due to the raise in Covid-19 alert levels on 23 June 2021. Therefore, they were not eligible for the resurgence support payment even though they have experienced a drop in revenue.

Fine Cuisine Limited carries on a restaurant business in Napier. As a result of the raise in Covid-19 alert levels on 17 August the restaurant will be closed for 3 days. As the restaurant has been closed, Fine Cuisine Limited is likely to experience a 30% drop in revenue over 7 days starting from 17 August. They will need to recheck their revenue after 7 days have passed.

If after 7 days Fine Cuisine Limited has experienced a 30% drop in revenue due to the raise in Covid-19 alert levels and provided that they satisfy the other eligibility criteria, they will be eligible for a resurgence support payment.