Covid wage subsidy payback

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JaseNZ

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#269827 9-Apr-2020 18:03

So simply a business get's x amount of dollars for 25 people for wage subsidy. As seen per register.

Company is fully operational and nobody has gone off because of covid.

Does this mean they have to pay this money back at the end or would this be fraud.

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networkn

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#2458595 9-Apr-2020 18:08

There will be auditing. They would be asked to return it.

Grant Robertson said he believes it's extremely likely almost every business in NZ would have a 30% decline in at least 1 month of the period it's for.

If you are worried, put it in an interest bearing account in case you need to return it.

It would be exceptionally unlikely fraud charges would be laid if there was at least some doubt.

cshwone

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#2458597 9-Apr-2020 18:11

I think there is more than auditing happening

https://www.stuff.co.nz/business/120942826/coronavirus-employers-pocketing-wage-subsidy-face-fraud-charges

Handle9

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#2458598 9-Apr-2020 18:15

The wage subsidy is available to companies who believe their turnover will reduce by a minimum of 30% as a result of COVID19.

Just because everyone is at work doesn't mean that a company isn't severely affected

JaseNZ

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#2458599 9-Apr-2020 18:15

networkn:

There will be auditing. They would be asked to return it.

Grant Robertson said he believes it's extremely likely almost every business in NZ would have a 30% decline in at least 1 month of the period it's for.

If you are worried, put it in an interest bearing account in case you need to return it.

It would be exceptionally unlikely fraud charges would be laid if there was at least some doubt.

Thanks not my company but a good friend works for them and they are dodgy employers at the best of times, I just don't want to see them ripping the system off.

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nickb800

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#2458603 9-Apr-2020 18:19

They'll need to have a tipoff line/form as there's no way they can audit a decent proportion of that many businesses.

Need to create enough fear so that those who applied but didn't experience such a revenue drop will proactively pay it back. The register is part of that

networkn

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#2458616 9-Apr-2020 19:21

Handle9: The wage subsidy is available to companies who believe their turnover will reduce by a minimum of 30% as a result of COVID19.

Just because everyone is at work doesn't mean that a company isn't severely affected

Or won't be in the intervening time.

My gripe with the system is the fact it's all being paid at once.

In my opinion it should have been paid monthly.

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tripp

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#2458759 10-Apr-2020 09:04

networkn:

Handle9: The wage subsidy is available to companies who believe their turnover will reduce by a minimum of 30% as a result of COVID19.

Just because everyone is at work doesn't mean that a company isn't severely affected

Or won't be in the intervening time.

My gripe with the system is the fact it's all being paid at once.

In my opinion it should have been paid monthly.

Would have been a lot more work, the real kicker (which happen to me) is because i applied and got the wage sub before the 1st of april the whole amount has to be taxed as income from last finance year and not split with 1 week in 2020 and remain in 2021 finance years. This means it's taxed higher. I will have a 30% decrease in revenue from next weeks as my contract ends and there isn't much work at the moment :(

snnet

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#2458764 10-Apr-2020 09:25

tripp:

Would have been a lot more work, the real kicker (which happen to me) is because i applied and got the wage sub before the 1st of april the whole amount has to be taxed as income from last finance year and not split with 1 week in 2020 and remain in 2021 finance years. This means it's taxed higher. I will have a 30% decrease in revenue from next weeks as my contract ends and there isn't much work at the moment :(

Apparently there are situations where it shouldn't be fully included in the tax period it was received as it is a subsidy (weird, I know!), but instead calculated as if it was paid out weekly to you? There's apparently something on the IRD site with this on it. I haven't found it yet, but I haven't looked either

OldGeek

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#2458767 10-Apr-2020 09:41

nickb800: They'll need to have a tipoff line/form as there's no way they can audit a decent proportion of that many businesses.

Need to create enough fear so that those who applied but didn't experience such a revenue drop will proactively pay it back. The register is part of that

IRD can audit against PAYE records for the employees named in the wage-subsidy claim and I am sure they will have ways of auditing turnover. Cash payments (both to the employer by customers and by the employer to employees) is another issue - but that is nothing new (ie not specifically a wage-subsidy problem). Initial 'discovery' of fraud can be automated.

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clevedon

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#2458775 10-Apr-2020 09:57

tripp: Would have been a lot more work, the real kicker (which happen to me) is because i applied and got the wage sub before the 1st of april the whole amount has to be taxed as income from last finance year and not split with 1 week in 2020 and remain in 2021 finance years. This means it's taxed higher. I will have a 30% decrease in revenue from next weeks as my contract ends and there isn't much work at the moment :(

Can't you just adjust it in your accounting Cash Book module and reconcile it how you have described as it would happen in the monthly/EOFY cycles - if you haven't already electronically rolled over your systems month.