Covid 19 Delta outbreak: Long wait for some business owners to get wage subsidy

Some business owners have had to wait more than two weeks to get the wage subsidy paid out putting financial pressure on them and their families.

An East Auckland cabinet-maker, who didn’t want to be named, said he applied to the Ministry of Social Development on August 22 – five days into the level 4 lockdown and had yet to see anything land in his account.

“They received it because I got an email on the first day saying they had got it. I did ring through to them a week ago and got someone that wasn’t involved in [the wage subsidy applications] but was helping out.”

That person wasn’t able to sort out the payment directly but left notes on his account and told him someone would be in touch.

“They did try and ring on Saturday but I missed the call – apparently it will finally go in in the next few days.”

The man, who normally works in a factory making kitchen cabinets largely on his own, said it was a frustrating situation.

“I’m not broke, but I am self-employed – a sole trader under a company name. All it is is you are just dipping into your savings because $600 doesn’t go far. I earn reasonably good money so obviously you live more towards what you are earning and that is not all coming in.”

He has also been unable to move house due to the level 4 lockdown restrictions.

“It’s the second time. We moved house last year and got delayed because of lockdown and we have actually sold and bought again and we are stuck in lockdown and can’t move again.”

In some ways that had helped as he was currently mortgage free.

“It’s not the end of the world for me – but it is annoying watching your bank account go down when you could be at work.”

In another situation a man who is a landscape gardener in Auckland said his wife who is also a director and shareholder of his business applied for the first tranche of the August 2021 wage subsidy on August 21 and they were still waiting to get the money on the morning of Monday September 6.

“We got an email on the day we applied confirming the application. But basically any correspondence you get says don’t ring us.”

She said she waited until last Thursday before trying to call.

“I didn’t know who to ring – it is not clear who pays it, whether it is MSD or IRD.”

She ended up calling Inland Revenue first and while they could see the application in their system they could not help. A second call to MSD revealed the application had been held up because they had put in the company’s IRD details rather than her husband’s personal IRD number.

“I filled in the form for a self-employed person but it asked for all his business details so I put in the business IRD number but apparently I should have put in his personal IRD number. So because I didn’t do that it is now sitting in a queue.”

But she said what was really frustrating was that even though the MSD contact identified the issue and took the updated details the woman couldn’t process it and instead told them they would have to wait for a call back from someone else.

“She couldn’t do anything to over-ride it – she had all the right details to progress it to the next step. Then on Friday we get an email saying someone is going to ring you in the next three working days. We are still waiting for that phone call.

“Meanwhile we have got no money to feed our kids or pay our mortgage.”

The landscaper had already applied for the Resurgent Support Payment and been paid out but that money had gone on business costs including paying a GST bill.

The wife said she had now applied for the second tranche of the wage subsidy with the correct details and was hopeful that would be processed quickly. Late yesterday afternoon both payments came through.

“It is just a layer of stress you don’t need, $600 a week is nothing anyway – our mortgage and bills are over $400 a week, so that leaves us $200 a week to feed a family of five. I am grateful we have got something.”

But she said if the level 4 lockdown went on much longer it would be impossible to survive financially.

“If this goes on much longer than four weeks – we can make $600 a week last – but if it is going to go on longer than that we are not going to be able to make things work.”

George van Ooyen, MSD group general manager client services support, said it was working as quickly as possible to support applicants and try to resolve issues over the phone during the first phone contact.

Van Ooyen said to ensure the integrity of the wage subsidy scheme it matched information provided by applicants against data held by Inland Revenue.

“If the data does not match, we work with both the applicant and Inland Revenue to find a solution, and in some instances an individual’s Inland Revenue number has been required to obtain an approval. To make this process clearer, small changes were recently made to the application form.”

He said any changes to an application would need to be reconfirmed with an Inland Revenue match.

“If the application information is correct payment will be made same, or next business day, and this has occurred for thousands of employer and sole trader applicants.”

On Friday Deputy Prime Minister Grant Robertson said most businesses had received their wage subsidy payments within the three-working-day timeline.

As of Friday 242,600 applications had been approved with total payments of $998 million going out the door.

Robertson said the majority of those that were applying continued to be sole traders or small firms rather than big companies.

About 59 per cent of employees covered by this wage subsidy period worked for businesses with between 1 and 19 staff members.

Some 2.5 per cent of total applicants were companies with 1000 plus employees – that figure compared with 10 per cent following the March 2020 lockdown.

“This does suggest larger firms are more confident about their resilience and have used the lessons learnt from 2020 lockdown to adapt their practices but equally we do recognise the longer the outbreak goes on the greater the pressure comes on those businesses.”

Applications for the second tranche of the August 2021 wage subsidy opened at 9am, Friday September 3, and will close at 11.59pm on Thursday September 16.


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