Social development officials have fixed the terms of the wage subsidy after an embarrassing blunder
A Christchurch business owner has discovered government officials botched the wage subsidy criteria – a mistake that would have denied her and other businesses the much-needed support.
She approached Newsroom, pointing out business operators were required to sign a legal declaration of their reduced income for August 17 to August 30, inclusive.
August 17 was the start of lockdown, but only in the most technical sense. The country went into alert Level 4 from 11.59pm that Tuesday, after businesses had earned a full day's revenue.
"For semi-essential businesses such as ours this is incredibly punitive," the business owner said.
Their revenues will be down more than 40 percent for the first 14 days of lockdown – but if their pre-lockdown earnings on August 17 were included, they would miss out.
"I believe the intent of the subsidy would be that the calculation commences at the start of lockdown rather than including a full day of normal revenue. We can’t seem to get any assistance from the Ministry on this. We are obviously trying to provide wage assurance for our non-essential staff as soon as possible."
After being approached by Newsroom, the ministry admitted it had got it wrong, and changed the declaration to allow business owners to measure their income from August 18 to 31, instead.
George Van Ooyen, the group general manager for client services support, said the purpose of the wage subsidies had been to support businesses to protect wages and jobs, and in turn help New Zealand’s economic recovery.
"To address any potential disadvantage, there has been a change to the revenue test period in the declaration employers make when they apply," he said.
"The extended date will make a difference to some businesses who will now be eligible."
– Carmel Sepuloni, Social Development Minister
Employers could now calculate their revenue test period for any 14-day consecutive period between 17 August 2021 and 31 August 2021, inclusive, rather than just August 17-30. The change would also apply to the revenue test period for businesses that had highly seasonal revenue.
He said businesses that had already applied for the wage subsidy, before the criteria were fixed, could also apply the new revenue test period to the calculation of their revenue test period, if they wished.
Social development minister Carmel Sepuloni said it had been key to act quickly to protect jobs and the economy.
"Since applications opened we have received queries from some businesses concerned that having the period beginning on 17 August took into account a full day of trading and therefore it may affect their ability to meet the required 40 percent decline in revenue to claim the support.
"We agree with them, and have acted quickly to fix this issue. The revenue test period has now been extended.
"Having the start date at August 17 has not stopped money getting to businesses who need it, but the extended date will make a difference to some businesses who will now be eligible."
Sepuloni said the ministry had done a great job of rolling the wage subsidy out to businesses at speed, with more than $686m paid out to 174,169 businesses and sole traders by the end of Wednesday.
