We have had many requests for more information on the Resurgence Support Payment (RSP) and we provide further details here. This payment has been set up by the Government to support businesses with reduced revenue due to a COVID alert level increase to level 2 or higher – as we have experienced this week.
To be eligible for the RSP, a business or organisation must have:
- experienced at least a 30% drop in revenue, or 30% decline in capital-raising ability,
- over a 7-day period at the raised alert level compared with a typical 7-day revenue period
- in the 6 weeks prior to the increase from alert level 1.
Businesses and organisations (including sole traders) must have been in business for at least 6 months to be eligible.
Applying for the payment
The Government has now activated the RSP and applications can be made through the IRD, in myIR, from Tuesday 23 February 2021.
Eligible businesses can apply to receive the lesser of:
- $1,500 plus $400 per fulltime-equivalent (FTE) employee, up to a maximum of 50 FTEs, or
- Four times (4x) the actual revenue drop experienced by the applicant.
The RSP will remain open for applications for one month after the return to alert level 1.
Most applicants will receive their RSP from Inland Revenue within 5 working days of their application being approved.
‘Activating the RSP’
The Government will announce whether the RSP will be activated each time the COVID alert level is increased from level 1. Generally, the Government will activate the RSP when the period of increased alert level is at least 7 days. Once activated, the RSP will be available nationally even if the alert level isn’t increased across the whole country.
It’s possible that the Government could decide to activate the RSP multiple times if there are multiple alert level increases from level 1. Businesses and organisations can apply for the RSP each time the RSP is activated if they meet the eligibility criteria.
Tax and the RSP
Payments received under the RSP are not subject to income tax.
Expenditure funded by payments under the RSP is not deductible.
GST-registered businesses will return GST on payments received under the RSP. These businesses will be able to claim input tax deductions for expenditure funded by payments under the RSP.