On 6 April 2020, the UWV will open the application portal for the NOW grant at 9.00 am. This is compensation for wage costs arising from a fall in turnover as a result of the coronavirus crisis. This scheme includes a deduction, which leads to outcomes that many business owners are unlikely to expect.
NOW grant
The basis for the NOW subsidy is the total wage bill for January 2020 (or, where applicable, that for November 2019). You do not need to provide this information in your application. The UWV will retrieve this information from the payroll records. Any corrections to the January 2020 payroll declaration will be taken into account, provided they were submitted by 15 March 2020 at the latest.
The total wage bill for January 2020 will be increased by a surcharge of 30% to cover employers’ contributions. And as the subsidy period covers 3 months (March, April and May), this is naturally multiplied by 3. The maximum subsidy amounts to 90% of this sum. If the decline in turnover is less than 100%, the subsidy amount will be lower.
Example
Suppose your total wage bill for January 2020 is €1,000,000 and you expect a 50% drop in turnover.
The total wage bill for the NOW subsidy would then amount to: €1,000,000 * 1.3 * 3 = €3,900,000.
In response to your application, the following grant is awarded: 50% * 90% * €3,900,000 = €1,755,000.
As an advance payment, 80% will be paid out (in up to three instalments). This amounts to: 80% * €1,755,000 = €1,404,000.
Higher actual wage bill
The wage bill of €3,900,000 specified above will serve as the basis for the final determination of the grant. If the actual wage bill for the months of March, April and May 2020 exceeds €3,900,000, the grant will be set at €1,755,000 (the same calculation as above) and a supplementary payment of €1,755,000 – €1,404,000 = €351,000 will be made.
PLEASE NOTE: You will therefore NOT receive any additional compensation for the portion of the actual wage bill in March, April and May 2020 that exceeds the wage bill specified when the subsidy was granted. For example, if the total wage bill for March, April and May amounts to €4,100,000 (including the 30% surcharge), the subsidy will still only be granted on the basis of €3,900,000.
Discount
If the actual wage bill for March, April and May 2020 is lower, the subsidy will be reduced. Suppose this wage bill amounts to €2,400,000 (excluding the 30% surcharge). That is €600,000 less than the wage bill calculated on the basis of January 2020. When determining the subsidy, a reduction will then be applied, calculated as follows: 90% * €600,000 * 1.3 = €702,000.
The grant is therefore set at €1,755,000 – €702,000 = €1,053,000. This is less than the advance payment of €1,404,000, so, based on the final grant amount, the business owner must repay: €1,404,000 – €1,052,000 = €351,000.
Continue to pay the full salary
We have taken this example from the explanatory notes to the scheme, which can be found in the Official Gazette. The example relates to a relatively straightforward situation. Among other things, it is assumed that the final fall in turnover is equal to the fall in turnover estimated at the time the grant application was submitted.
The discount is included in the scheme as an (additional) incentive to ensure that employers continue to pay their staff’s wages for 100%. This is particularly challenging in the case of staff who are deployed on a flexible basis. See also our article Current pay rate for on-call staff. However, there may also be other reasons for the lower wage bill in March, April and May 2020 compared with January 2020.