Auckland salon owner 'speaking up' for those stressed by wage subsidy delays

Monday, 13 September 2021

Lush Hair owner Lyndsey Erasmus says she “triple, quadruple checked” her wage subsidy application.

Hair salon owner Lyndsey Erasmus says she is distressed by an unexplained delay receiving wage subsidies that has left her unable to pay her staff or herself.

Erasmus, owner of Lush Hair in the Auckland suburb of Silverdale, is among an unknown number of business owners who believe their subsidies have been delayed for no good reason, or declined for reasons that they could not understand.

The extent of unexplained issues remains unclear, with the Ministry of Social Development and Inland Revenue maintaining the usual reason for payment delays is businesses submitting incorrect information.

Usually that is numbers for staff that don’t match up with the numbers Inland Revenue has on record, they say.

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Erasmus said that in her case she had no issues applying for the first round of wage subsidies that covered the period between August 17 and 31, receiving that money in three days.

But she had heard nothing from MSD 10 days after applying for the second round of subsidies on September 3 using the same information “copied and pasted” from her Xero payroll.

“I triple, quadruple checked all the information that I put in, so I know that it is correct.”

Erasmus had been unable to pay her eight staff or herself anything because of the delay, she said.

“My team is heading into their second week of no money coming in whatsoever. We are all struggling financially as we all have rent or mortgage commitments to make.

“As a business owner I feel massively responsible for my employees and I feel that I have let them down. My mental health has taken a bit of a dip because of that burden. Most of the girls have got children, including myself.”

Eramus reached MSD by phone on Friday and was told by “a lovely gentleman” that the application was being processed, she said.

“I understand that MSD is under huge amounts of pressure to get these subsidies paid. However I, feel that the big corporations get first choice and the small businesses like myself and sole traders are getting shoved to the bottom of the pile.”

Erasmus said “quite a few” other salon owners on a hairdressing forum had reported payment delays.

“I hope it gives other business owners the courage to speak up, because a lot of people are too scared to say anything,” she said.

MSD services manager Jason Dwen responded shortly after 2pm on Monday – after being contacted for comment by Stuff – that Lush Hair’s application had been waiting to be processed while the ministry worked through verification checks.

The Social Development Ministry says its performance is in line with its aim.

It had reviewed the application on Monday, he said.

“It has been approved and payment should follow shortly. We apologise for this initial delay.”

Erasmus said she felt “100 per cent relieved”.

Nothing MSD had communicated had suggested the delay had been her fault, she said.

Another business owner, who requested anonymity, said he had also received the first-round subsidy without a problem, but not the second.

“Certain that our application was correct, we set about reviewing it and found that inexplicably and somewhat mysteriously our bank account details had been changed by IRD to those of a previous bank account we had not operated for two years,” he said.

Workers from surf and skate shop Amazon Surf have said they have not been paid since the beginning of the lockdown, while the company waits approval for its wage subsidy application.

National Party shadow treasurer Andrew Bayly said he had been contacted by about two dozen businesses reporting problems getting the subsidy since he asked them to share experiences on Saturday.

In many cases that was because applications had been declined but they were unable to tell why, he said.

The standard email from MSD stated that could be because of four reasons, including staff details not matching those held by IR, another application having already been approved, businesses using the wrong application form, or MSD not being able to confirm “you are self-employed”.

Just less than $1.8 billion had been paid out to a total of 274,246 businesses since the wage subsidy scheme was reactivated last month.

Dwen said that in most cases applicants were receiving the subsidy the same day they applied, or the next business day.

Eighty-seven per cent of applications were either approved, declined or otherwise closed out within three days. About 9 per cent of applications that were paid out had not been paid out within that time frame.

Those numbers were “in line with our stated aim to have payments reach applicants within three working days of applying”, Dwen said.

Applications that were taking longer were largely from sole traders, he said.

Inland Revenue spokesman Rowan McArthur said the hold-ups that were occurring approving applications were “not because of problems with the data matching/sharing systems or processes themselves”.

“Everything is working as it should,” he said.

“There are a lot of applications coming in and IR is working hard with MSD to make sure that the communications around the whole process are as clear as they can be so that money [gets] to the businesses as quickly as possible.”