More than 37,000 businesses are still waiting to get paid the first round of the August 2021 wage subsidy five weeks after the lockdown began.
James, who doesn’t want his full name used, runs a business selling tools online to tradespeople and applied for the wage subsidy on August 20 – the first day it opened for applications.
But as of yesterday he was still waiting for the money to be paid out.
“I hit refresh on the bank account balance very frequently.
“It just means my suppliers are not getting paid, and I am only paying the bills I need to pay to survive.”
James reckons he has called the Ministry of Social Development at least 20 times since applying for the first round trying to find out why there is a delay. He has also applied for the second and third rounds.
But he says getting an answer out of MSD as to why his application is still pending is difficult.
“You just get stonewalled, you don’t get any information. All you get is, you give your IRD number, and they go yep we have got your application, it is in the queue pending processing, that’s it.”
James said it was tricky financially, although he still had some income coming in.
“It is surprising how little you can live on if you have to. It just means I have to be really careful with what goes out. Apart from food it’s not much that goes out.”
He said alert level 3 would help a bit as it meant his suppliers would also be open again allowing him to source stock.
James said most of the big tool suppliers were Auckland-based and had shut up shop for the month under level 4.
“I don’t think revenue will change very much but at least my suppliers are shipping now. It is improving but it won’t make a lot of difference.”
James said not knowing when the money could come in made it difficult to plan.
“The thing that is difficult is you look at your bank balance and you go: ‘I’ve got this much money – do I have to make that last a week or do I have to make that last a month?’ It is just very disconcerting when you can’t plan.”
MSD figures show 37,360 applications for the first round of the August 2021 wage subsidy were still pending as of September 19 – just shy of 11 per cent of the total 340,665 applications.
For the second round there are 22,187 applications still pending out of 263,659, or around 8.4 per cent.
So far MSD has approved 274,667 applications from the first round paying out $1.3 billion and approved 209,226 in the second round paying out $869.6 million.
The third round, which opened on Friday, has already seen 47,926 applications approved and $106.9m paid out.
Jason Dwen, general manager of centralised services at MSD, said in general wage subsidy applications were being processed rapidly.
As of September 6, 91 per cent of paid-out applications were paid within three working days and 87 per cent of applications were completed (either paid, approved, closed or declined) within three working days.
“We aim to process applications as quickly as possible, but there are a range of issues that could mean payment takes longer than usual.
“It is important for the integrity of the wage subsidy scheme that these issues are worked through carefully before any payment is made.”
Dwen said where applications were still pending it was because the ministry was not confident about making payment based on the information provided.
“We have an obligation to taxpayers not to make payments without the right information.”
He said the main issues with pending applications included;
• applications from people claiming to be self-employed when Inland Revenue can see no evidence that they have been working for themselves. This includes applicants whose Inland Revenue details show they are wage and salary earners
• applications with Inland Revenue numbers that don’t match IR records
• applications where employees have applied instead of their employer
• employers who have claimed for employees that Inland Revenue don’t have a record as working for them.
Dwen said it had been contacting pending applicants, most at least three times, using multiple contact methods.
“Where Inland Revenue can see no evidence someone has been self-employed, we ask them to work with IR to establish they are in fact self-employed before progressing their payment. If they fail to do so, their application will be declined.
“We continue to conduct an outbound call campaign to work with businesses and sole traders to resolve their applications.”
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