A business or organisation must have been in business for at least 1 month prior to 17 August 2021 and experienced at least a 30% decline in revenue over a continuous 7-day period (set out below), due to the increased COVID-19 alert level (subject to all other criteria being met).
This decrease in revenue is compared with a typical continuous 7-day revenue period in the 6 weeks prior to 17 August 2021(or, for businesses or organisations that have been in business for 1 month, a typical continuous 7-day revenue period in the 1 month prior to 17 August 2021).
If the business or organisation is part of a commonly owned group, each member of the group may be eligible for RSP. Your business or organisation and the commonly owned group must have both:
- experienced at least a 30% decline in revenue
- used the same 7-day period at the increased alert level and the same 7-day comparison period when calculating the decrease in revenue.
This 30% drop in revenue also needs to be satisfied across the commonly owned group as a whole. For more information on commonly owned groups, please see below.
If your business or organisation has taken active steps towards being market ready but has not yet begun trading, please see “Pre-revenue businesses and organisations” below for more information about eligibility.
To be eligible for the Resurgence Support Payment, your business or organisation must meet all the following criteria.
- Applicants must have experienced at least a 30% decline in revenue due to the increase in alert level. (If the applicant is part of a commonly owned group, this 30% decline also needs to be satisfied across the group as a whole.)
- Businesses and organisations (including sole traders) must have been in business for at least 1 month before the alert level increase on 17 August 2021.
- The business or organisation must be viable and ongoing.
- Charities and not-for-profit organisations may be entitled to the RSP, provided they meet the other eligibility requirements.
- State sector organisations are excluded from the RSP, but can apply to the Minister of Finance for an exemption to apply for the scheme.
- Income that is received passively – such as interest and dividends, and all forms of residential and commercial rent – is excluded from the measurement of revenue.
- Your business must be physically present in New Zealand.
- Applicants must be 18 years or older.
- Businesses and organisations (including sole traders) must have a New Zealand Business Number.
Receiving any other Government COVID-19 support does not affect eligibility for the RSP.
The Government may make more than one RSP available during an alert level rise. If this is the case, a start date for the payment will be set.
The Government has decided to make two RSPs available for the August activation of the RSP : one for each of the two periods set out below.
When applying for the RSP, the start date of the continuous 7-day period where your business or organisation has experienced a drop in revenue must be in the following affected period:
- For the first RSP: On or after 17 August 2021 and immediately before all of New Zealand returns to alert level 1
- For the second RSP: On or after 8 September 2021 and immediately before all of New Zealand returns to alert level 1.
You are only entitled to apply for 1 RSP for each of the above-mentioned periods.
Calculating your drop in revenue
Revenue refers to income generating activity by a business or organisation. Standard accounting principles relating to income recognition apply.
- For a cashflow business, such as a restaurant, this is likely to be the daily takings.
- For a business that invoices clients, this will be the activities the business carries out that would entitle it to bill or invoice either immediately or at a later date.
To calculate affected revenue due to an increase in COVID alert levels, businesses and organisations need to measure their revenue over a continuous 7-day period where your business or organisation has experienced a drop in revenue due to the raise in alert levels. This continuous 7-day affected revenue period needs to be in the following affected period:
- First RSP: On or after 17 August 2021 and immediately before all of New Zealand returns to alert level 1.
- Second RSP: On or after 8 September 2021 and immediately before all of New Zealand returns to alert level 1.
This continuous 7-day affected revenue period then needs to be compared against a typical regular 7-day revenue period that starts and ends in the 6 weeks prior to 17 August 2021 (or, for the purposes of organisations that have been in business for 1 month, a typical continuous 7-day revenue period in the 1 month prior to 17 August 2021) to determine whether there has been a 30% decline in revenue.
Both the affected revenue period and the comparison period must be calculated retrospectively. The calculations must be based on what has happened, not a forecast of what might happen.
Make sure you keep a record of your calculations so you can give it to us if requested. This includes:.
- dates of the affected revenue period and comparison period
- amount of revenue earned in each period
- how the revenue drop has been calculated.
Seasonal businesses and organisations
Businesses or organisations with highly seasonal revenue must meet the revenue drop test as set out above. However, they may select a 7 day comparison period outside the six weeks prior to 17 August 2021 and which may be from a prior year, which reflects their typical revenue.
Commonly owned groups
A commonly owned group of businesses is generally considered to be one where each business has the same combination of owners. It does not matter whether those owners have the same proportion of ownership in each business.
A business may also be treated as being in a commonly owned group if it is in substance part of a larger group of businesses. For example, this may occur in the following situations.
- The group has a dominating shareholder or group of shareholders, and the businesses operate together as if they were one.
- The group of businesses involves a complex ownership structure where the overall control is centralised and businesses are in substance one enterprise.
Each business or organisation in the commonly owned group is eligible for RSP if they and the commonly owned group as a whole meet the criteria noted above. This is a change from previous alert level increases.
Pre-revenue businesses and organisations
Pre-revenue businesses and organisations may be eligible if they both:
- have experienced a minimum of 30% reduction in their capital-raising ability over a continuous 7-day affected revenue period as a result of an increased alert level
- meet the other RSP eligibility criteria.
A pre-revenue business or organisation is one that has taken active steps towards being market-ready, but has not yet begun trading.
Capital raising - for the purposes of the 30% reduction in capital raising test, includes external funding raised by a pre-revenue business or organisation for the purposes of becoming market-ready. This includes the following types of external funding:
- debt funding (for example, bank funding and debt funding from external investors)
- equity funding
- grant funding
- fit-out contributions (for example, a landlord may contribute to assist in getting an applicant's business market ready).
However, capital raising does not include the following types of funding:
- funding that a self-employed person provides to their own sole proprietorship business
- funding that a shareholder (or other associated person) in a close company provides to that company. This point also applies to funding provided by associated persons to other types of closely held business or organisations.
- Covid-19 related government assistance payments (for example, the Small Business Cashflow Scheme loan).
Pre-revenue businesses or organisations will need to keep records of how their ability to raise capital or begin trading was affected by the raised alert level.
Resurgence Support Payment amount
The maximum size of the RSP your business or organisation may be eligible for depends on the number of full-time equivalent employees (FTEs) you have, and your level of revenue.
The RSP is calculated as $1,500 plus $400 per FTE (up to 50 FTE). The maximum payment is $21,500. Sole traders can receive a payment of up to $1,900.
- Employees regularly working up to 20 hours per week are considered part-time (0.6 FTE)
- Employees regularly working 20 hours or more per week are considered full-time (1.0 FTE)
Businesses with low revenue will have their payment capped at 4 times (4x) the amount their revenue has dropped over the 7-day period. For example, if your business has 3 FTEs, they would, subject to the low revenue cap, be entitled to $2,700. However, if their revenue drop was $500, their RSP payment would be limited to $2,000.