The Code has been approved as part the Authority’s response to COVID-19.

The urgent Code will come into effect on Wednesday 20 May and will expire after nine months

Eligibility

The Authority has appointed KPMG to assess all applications under the Retailer Debt Deferral Scheme.

The criteria for qualification for the scheme are set out in the urgent Code change. In summary, to qualify for the scheme a retailer:

  • must have experienced a 25% increase in overdue receivables ($) compared to a year ago or March 2020 depending firm growth rate.
  • will likely face liquidity issues within the next 6 months as a result of Covid-19
  • must be expected to be in a position to pay debts in 12 months
  • must have satisfied the solvency test set out in section 4 of the Companies Act 1993 as at 31 December 2019
  • must not be a subsidiary of a company with the capacity to supply loans or additional capital sufficient to address the liquidity problem arising from Covid-19
  • must not be a listed company or a subsidiary of a listed company

Application process:

  1. Email us at debtdeferralscheme@ea.govt.nz  and advise of your intent to apply
  2. Supply contact details so that KPMG can contact you directly with the information request
  3. KPMG will work with the retailer to clarify information and decide if the criteria are met
  4. KPMG will hen advise the Authority of its decision.


Additional information

If you are considering applying for the scheme please note the following:

  • Your application for the scheme will not be published - but the names of firms that qualify for the scheme will be published
  • Applicants should keep in mind that the Authority is subject to the Official Information Act.
  • The Code comes into force on 20 May 2020. Retailers wishing to have debt deferred from 20 May 2020 need to be certified as qualifying for the scheme by 20 May and so should begin the process with our nominated accountant as soon as possible, emails will be monitored over the weekend.
  • Applicants will need to supply financial information sufficient for KPMG to establish and be satisfied that the retailer qualifies for the scheme.
  • Applicants should supply requested financial information directly to KPMG.  This data will not be seen or held by the Authority. The Authority will receive certification from KPMG identifying whether applicants are either qualified or not qualified.
  • Applicants are required to pay a share of the accountant’s costs ($500 plus $1 per ICP, capped at $7,500).  If you start the application process and it becomes apparent at an early stage you do not wish to proceed with the application, the applicant won’t be required to pay the costs.

For further information please email us at debtdeferralscheme@ea.govt.nz or call Erich Livengood on 021 221 6524 .

Read more about the debt deferral scheme.