Over 80% of businesses must pay back some Covid wage support
More than 80 percent of businesses who made use of the Dutch government's NOW regulation for wage support during the coronavirus pandemic, will have to pay at least some of that money back, NOS reports based on a publication by three Ministry of Finance officials.
This involves 50 thousand companies that applied for wage support for the period of March to October 2020. In total they'll have to pay back 4.2 billion euros.
In their application, companies had to estimate how much turnover they would lose. On that basis, they received an advance of 80 percent of the requested aid, so that they could continue to pay their employees' wages. Based on these estimates, the government paid out a total of 12.2 billion euros in wage support between March and October 2020.
The officials' publication showed that over 80 percent of entrepreneurs were too pessimistic about their company's outlook. Their eventual turnover loss turned out to be lower than they estimated, and they'll therefore have to repay part of the advanced wage support. A third of them will likely have to repay the entire amount.
There were major differences between the sectors and how justifiable entrepreneurs' pessimism was. Virtually none of the travel organizations that received wage support have to pay anything back. The same is true for most catering entrepreneurs. On the other hand, many veterinarians turned out to be too pessimistic and received more business than they expected.
Entrepreneurs who correctly estimated their losses will still receive the remaining 20 percent of requested aid. A few thousand entrepreneurs were too optimistic when applying for aid and lost more turnover than expected. They will receive additional wage support.