Checks on paid Covid wage subsidies to take years
In the first round of the NOW regulation, 139 thousand companies who suffered turnover loss due to the coronavirus crisis received some 7.8 billion euros in subsidies so that they could continue paying their employees' wages. Starting today, benefits agency UWV will check whether these companies were entitled to the subsidy, and whether they have to pay any of it back. This is "an enormous job" that will take years, UWV director Janet Helder said to NOS.
"Determining the final amount of the subsidy is much more difficult than drawing up the scheme in March," Helder said. The second and third round of the NOW regulation will also have to be checked. Helder expects the UWV will be busy with this until 2023 or 2024 .
The process of applying for the NOW regulation, especially in the first round, was relatively simple. Employers had to indicate how much revenue decline they expected and how high their wage costs were. This simplicity was intentional - the government wanted to get wage subsidies to employers as quickly as possible, to prevent mass layoffs. If the company made more turnover than expected, or if wage costs turned out to be lower, part of the subsidy will have to be paid back to the government. That is what the UWV will be checking from today.
Helder said she would not be surprised if about half of the companies have to repay at least some of the subsidy they received.
NOS spoke to dozens of companies and found that they expect the same. About half of the companies think the odds are reasonably- or very high that they will have to repay some or all of the subsidy. For most this is because they made more money than expected.
That's not surprising, Annete Houwaart, accountant and SME advisor at the profession organization NBA, said to NOS. "At the beginning of the crisis, it was difficult for entrepreneurs to make that assessment." Part of the problem is that other coronavirus support subsidies are considered part of a company's turnover, and companies did not know whether or how much other subsidies they would receive.
Houwaart's experience is that companies were cautious and reported less revenue loss than they really expected. "Companies were then also afraid that they would have to pay back money afterwards."