Coronavirus: Thousands received wage subsidy payouts from multiple employers

STUFF
The Government has paid out $11 billion in wage subsidies to businesses that have suffered a loss of income as a result of the coronavirus crisis.

This story was originally published on RNZ.co.nz and is republished with permission.

More than 40,000 people have received wage subsidy payouts from more than one employer - with several hundred people getting the payout from four employers or more.

The government's wage subsidy scheme has helped cover nearly 1.7 million jobs, at a cost of nearly $11.9 billion.

But that payout does not cover 1.7 million people - with tens of thousands of people working in multiple jobs receiving multiple payouts.

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Information released to Checkpoint shows 42,200 people have been paid out by two employers - 2200 had three employers, and 364 employees were linked to four employers or more.

Many of those instances involved one or more part-time jobs.

Unite Union national secretary Gerard Hehir said the figures showed how many New Zealanders needed more than one job to get by.

He said there would be lots of people with part-time businesses who have been hit hard.

More than 40,000 people have received wage subsidy payouts from more than one employer, critics want payments to be scrutinised.
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More than 40,000 people have received wage subsidy payouts from more than one employer, critics want payments to be scrutinised.

"A lot of people want to work 40 hours - or even more sometimes - but the jobs that they can get simply don't allow for that to happen."

The wage subsidy was paid directly to eligible employers at a flat rate of $585.80 for people working 20 hours or more per week, and $350 for anyone working less than 20 hours per week.

The New Zealand Rugby Union has confirmed its players, who are employees of both New Zealand Rugby and the Provincial Unions, received the full-time rate from both organisations.

In a statement, New Zealand Rugby head of professional rugby Chris Lendrum said its players were like thousands of New Zealanders who work for different employers across a variety of industries.

"In their case, they are employees of both New Zealand Rugby and the Provincial Unions, and all organisations were eligible to apply for the Government wage subsidy. Our applications have been guided by and approved by the Ministry of Social Development."

A tax specialist with Dunedin firm Findex, Scott Mason, said even receiving multiple payouts, it was unlikely people profited from the scheme.

"It's possible that at an individual level, there might be people who got $50 more a week than they would've otherwise, simply because there were two lots of wage subsidy being paid to them by two employers - but that's absolutely at the margins.

"For the vast majority of the 42,000 odd people that received it from two employers, the $585 times two is probably less than they would've [received] otherwise."

Independent tax researcher Dr Michael Gousmett, who has raised concerns about how the wage subsidy scheme has operated, said some payouts may require a closer look.

"Looking at the numbers, there's a lot of people that have had subsidies claimed on their behalf.

"I think it does pose the question, is this all legitimate and above board?"

The Ministry for Social Development said it was aware of the potential risk associated with employees being claimed by multiple workplaces and was part of its audit programme.

So far there have been nearly 6000 refunds made to the wage subsidy programme, worth $176 million.

The largest payout to date is Silver Fern Farms, who paid back the $42m it initially claimed.

In a statement, the Minister for Social Development, Carmel Sepuloni, said a survey of more than 90,000 employers receiving the wage subsidy, found the wage subsidy had a positive impact on cashflow, with nearly two thirds saying that support for wages has helped employers address other business costs.

She said the NZRU and Provincial Unions were legitimate employers who had been assessed as fitting the eligibility criteria by MSD.

This story was originally published on RNZ.co.nz and is republished with permission.

RNZ