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Covid-19 Wage Subsidy Update

May 14, 2020

DO I NEED TO REPAY?

With the looming deadline nearing for the end of the first round of the wage subsidy on 9 June this is a gentle reminder to those that have claimed the subsidy to review your financial results.Specifically, taking consideration of whether you have indeed met the criteria under the scheme – which was a proven 30% reduction in revenue over a period of a month, or 30 days, when compared with the same month or 30 days, and that decline is related to COVID-19.

This means your business has experienced a 30% decline in:

  • actual revenue, or
  • predicted revenue (e.g. for businesses who have seen a reduction in bookings such as accommodation providers), and
  • that decline is related to COVID-19.

Your business must experience this decline between January 2020 and 9 June 2020.

Definition of revenue

Revenue means the total amount of money a business has earned from its normal business activities, before expenses are deducted.

If you are a pre-revenue research and development start-up business, you can include a drop in projected capital income when determining a 30% decrease in revenue.

Determining a decline in revenue

To determine a decline in revenue, the business must compare one month’s revenue (or 30 days) against the same month (or 30 days) the previous year (e.g. February 2020 compared with February 2019).

The revenue in the affected period must be at least 30% less than it was in the period it was compared against.

With this deadline looming you should be in a position (if you not have experienced that decline but have applied and received the subsidy) to repay.

Should you wish to discuss your status and whether you should consider repaying please contact us.