Financial support to move to traffic light system

A new transition payment will be made available particularly for affected businesses in Auckland, Waikato and Northland to acknowledge the restrictions they have faced under the higher Alert Levels.

  • Transition payment of up to $24,000 as businesses move into traffic light system
  • Leave Support Scheme and Short Term Absence Payment available under new framework
  • Further targeted support will be considered once framework beds in
  • RSP adjusted to support recently acquired businesses

“The one-off transition payment will be activated through the Resurgence Support Payment (RSP) system criteria and be available on December 10,” Grant Robertson said.

This payment is at a higher base rate than the current RSP and will be $4,000 per business plus $400 per FTE up to a cap of 50 FTEs – a maximum payment of $24,000. Treasury has estimated the likely total cost of the payment to be between $350 and $490 million.

The affected revenue period for the Transition Payment will be set between October 3 and November 9, and must be compared to a typical week in the six weeks prior to August 17.

This payment is a recognition of the long period of time businesses in Auckland in particular have spent with restrictions in place prior to shifting to the new framework.

“As I said last month we are moving away from the broad based economic supports provided under the Alert Level system. This is because at all levels of the new framework, most businesses will be able to operate at almost full capacity,” Grant Robertson said.

“On Friday the final Wage Subsidy and RSP opened for applications. These will still open, and pay out even though we are moving to the new framework, in addition to the transition payment.

“Support to be off work while isolating or to take leave while waiting for test results, currently provided by the Leave Support Scheme (LSS) and the Short Term Absence Payment, will remain available under all levels of the traffic light system.

“However, the LSS will move to a weekly payment rather than fortnightly under the new system, reflecting the changed isolation period.

“We will monitor any economic impacts the new system may be having on businesses. I expect to report back to Cabinet in early 2022 on this and will make recommendations for support as necessary.

“To be clear about this, if it is deemed necessary targeted support would only be available under the Red setting of the new system as businesses that operate vaccine passes have no significant restrictions at Orange and Green.

Cabinet has also agreed to change the rules so recently acquired businesses can access the Resurgence Support Payment.

This issue arose because the RSP rules required the applicant to have been operating as a business for at least one month before August 17 so businesses acquired after July 17 have not been eligible for any payment.

“I estimate very few businesses have will been in this situation, but for those that are, it will have been a difficult time.

“The test will now be that the business itself must have been in operation for at least one month prior to August 17 and the business must be carrying on the same or similar activity as before the change in ownership.

“The revenue decline test also needs to be amended to allow the applicant to use the revenue received by the previous owner over the comparator period in order to demonstrate the necessary revenue decline during the affected period,” Grant Robertson said.

The change will come into effect on December 10 and recently acquired businesses would then be eligible for RSPs made on and after October 29.