Resurgence Support Payment and Wage Subsidy FAQs
I have a client that is a shareholder employee of a company that she works part time at and also has a sole trader business that she works part time. Can the company claim for a wage subsidy as well as via the sole trader business?
Yes the wage subsidy can be claimed once by the company of which your client is an employee and once by your client (as a sole trader), assuming all other requirements have been satisfied to qualify for the wage subsidy. The Wage Subsidy eligibility criteria is available on the MSD website here.
Wage Subsidy & Resurgence Support Payment
Can you claim both the Wage Subsidy and the Resurgence Support Payment (RSP)?
The wage subsidy and the RSP can both be claimed at the same time as they are different payments.
One is to support employers to continue to pay their employees (the Wage Subsidy) and the RSP is a payment to the business, to support the business. Each of these schemes have different qualifying criteria.
However, if an employer applies for the Wage Subsidy for an employee, they cannot simultaneously apply to receive Leave Support / COVID-19 Short-Term Absence Payment (i.e. other subsidies which are employee specific cannot be applied for if the employer is already receiving a Wage Subsidy in respect of a particular employee). The RSP eligibility criteria is available on the IRD website here.
Resurgence Support Payment
Could you confirm that GST is payable on the RSP received. My understanding is you pay GST on it and can claim GST (if it has GST) on the expenses you use it on. For income tax it is not taxable income but what you spend it on is also not a taxable expense.
For income tax purposes, the RSP is like the Wage Subsidy and is treated as excluded income (and as you have pointed out, expenditure to which the payment is applied is also not deductible).
However, unlike the Wage Subsidy, the RSP is not specifically exempt from GST (i.e. the RSP will be treated like a normal subsidy paid by the Crown and will be treated as consideration for the supply of goods and services, and therefore treated as a taxable supply). Therefore, yes you pay output tax on
the payment received and claim GST on the expenses the payment is applied to.