Thousands of businesses waiting more than three days for wage subsidies

Thursday, 9 September 2021

Business owners are reporting mixed experiences claiming wage subsidies.

Businesses are continuing to complain of delays receiving wage subsidies but the Ministry of Social Development has indicated that “most” of the issues are not within its control.

Services manager Jason Dwen said that the ministry had yet to either approve, decline or otherwise close out 59,851 of the 340,420 applications it received for the first round subsidies, for the period August 17 to August 31.

Applications for those payments closed last Friday.

“The trend we are observing is that most delays are the result of information held by Inland Revenue about a business or self-employed person not matching up with the information on that company’s application form,” he said.

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“Our approach to resolving this issue is to work with applicants and Inland Revenue on bridging any information gaps as quickly as possible. In many cases, this involves contacting each applicant individually, which takes time,” he said.

Dwen said the ministry took its duty to taxpayers seriously and had to “balance the integrity of the scheme with paying applicants as quickly as possible”.

Of the claims that had been paid, about 9 per cent were not paid within three working days, according to the ministry’s figures.

One business owner said he had been waiting since August 29 for word on his first wage subsidy application and had been told by Work & Income that a large number of claims were being “bounced” because of data-matching issues with Inland Revenue.

The ministry was not immediately able to clarify whether any of data-matching issues that were causing hold-ups might be at the government end, rather than the result of businesses providing incorrect information.

Other reasons why applications could be held up is they had been submitted by an employee, rather than the business owner as required, and if business used the applications form for self-employed people, or vice versa, it said.

The business owner said he was in a “fortunate position” of having savings to pay his bills but said he felt for those “without the means to meet these costs”.

“I feel incredibly let down by the Government,” he said.

The ministry copped criticism last week after it accidentally advised businesses that applications for the first round of wage subsidies had closed, a few hours before the actual deadline.

Other businesses complained of having to repeatedly re-submit applications the following day for the second round of subsidies, for the period August 31 to September 13.

The ministry confirmed then that the online service had been experiencing congestion.

Finance Minister Grant Robertson said on Wednesday that he expected total claims for the first round of subsidies, for the period August 17 to August 31, would total about $1.2 billion once they were all tallied.

The Government is still considering whether businesses outside Auckland will be able to claim the subsidies for revenue drops that they have experienced as a result of level 2 Covid restrictions.

The declarations that businesses are required to sign currently stipulate that they must have experienced at least a 40 per cent revenue drop during the relevant two-week period as a result of either level 3 or 4 restrictions in order to claim.

Because the rest of country outside Auckland came out of the lockdown in the middle of the second fortnight, that could leave some businesses in other parts of the country only able to claim two weeks subsidy despite spending three weeks badly affected at level 3.

Not all businesses have been unhappy about the operation of the subsidy scheme.

Alan Chambers, owner of Wellington joinery business French Door Factory, which employs 12 people, said he believed people had been too critical about the ministry’s earlier issues.

“An amazing job has been done helping all of those businesses keep their staff employed” and some businesses had left their claims “to the last minute”, he said.