You may also want to read our article: NOW helpdesk set to open: look before you leap.
State Secretary Koolmees of the Ministry of Social Affairs and Employment announced this morning in a press conference It is expected that the NOW scheme application portal will most likely open on Monday 6 April 2020. Payment of the (first) advance payments will then follow within 2 to 4 weeks. Whether the application portal actually opens on 6 April depends on the technical tests to be carried out over the coming days.
NOW scheme
This refers to the Temporary Emergency Measure to Safeguard Jobs, under which employers are reimbursed up to 90% of their wage bill, provided that they:
- retain their staff and;
- continue to pay in full.
Koolmees emphasises that, given the speed with which the scheme and the helpdesk need to be up and running, the scheme must be simple. For this reason, there is no scope within the scheme for sector- and/or company-specific adjustments.
And Koolmees is (once again) calling on business owners to make use of the scheme only when their company’s (liquidity) position makes it necessary.
In practical terms, the condition that staff must remain in employment means that no redundancy may be requested on commercial grounds. If this does happen, 150% of the wages of the employee(s) who have been made redundant will be excluded from the wage bill for the purposes of calculating the NOW benefit.
Wage bill
The allowance is calculated on the basis of the wage bill (the social security wage; SVW wage). The UWV uses the wage bill for January 2020 as a basis (if this is not available, the wage bill for November 2019 is used). This information is taken from the payroll declaration submitted to the Tax and Customs Administration (this information is transferred by the UWV into its policy records).
A surcharge of 30%, which is the same for all companies, is applied to the wage bill determined in this way. The basis for the NOW benefit is therefore: 130% of the SVW wage. The 30% surcharge covers employers’ contributions (such as the accrual of holiday pay, employers’ social security contributions and pension costs).
Only the total wages of employees who are covered by statutory employee insurance schemes are taken into account for the NOW benefit (and therefore not the wages of the uninsured director and majority shareholder).
The maximum monthly wage taken into account per employee is €9,538 (twice the maximum daily wage).
Decline in turnover
The payment under the NOW scheme therefore amounts to a maximum of 90% * 130% * SVW wage. This maximum payment is made to business owners who have experienced a fall in turnover of 100%. Business owners with a fall in turnover of less than 100% will receive a pro-rata payment. For example, if the drop in turnover is 45%, the payment will be: 45% * 90% * 130% * SVW wage.
If the fall in turnover is 20% or less, there is no entitlement to a payment under the NOW scheme.
How is the decline in turnover calculated?
To this end, the consecutive three-month period of March–April–May 2020 is taken into account. When submitting the application, the business owner must estimate the turnover that will be generated during that period. This is compared with one quarter of the annual turnover achieved in 2019.
If the employer expects the effect to become apparent in the figures with some delay, they may indicate that they wish to extend the reference period by one or two months. Even in that case, however, the total wage bill for March, April and May 2020 will remain decisive for the amount of the benefit.
For employers who did not yet exist on 1 January 2019, a different turnover provision will apply. However, for other employers, for whom the periods used are not representative – for example, due to the growth of the business or seasonal factors – an adjustment is not possible in view of the need for simplicity in the scheme.
Enterprises comprising a group of legal entities must determine the decline in turnover at group level. It is not yet entirely clear what exactly constitutes a group for the purposes of this scheme.
Grants and other contributions from public funds, for example to schools and cultural institutions, are treated as turnover under the scheme.
Advance payment
Once the UWV has approved the application, an advance payment of 80% of the amount calculated on the basis of the application will be paid out. This advance payment will be paid in three instalments.
Applications for the NOW scheme can be submitted up to and including 31 May 2020.
Employers with multiple payroll tax numbers must submit a separate application for each payroll tax number. As indicated above, the decline in turnover must be assessed at group level. All applications must therefore state the percentage of the decline in turnover for the group as a whole.
Settlement
Within 24 weeks of the end of the period for which the NOW has been granted, the employer must apply for a final assessment. Within 22 weeks of this application, the UWV will determine the final benefit amount.
Naturally, the final determination of the benefit may result in:
- an amount to be paid retrospectively by the UWV;
- an amount to be recovered by the UWV (if it transpires that the advance payment was too high).
An auditor’s report is required when applying for final approval. An exception to this requirement will apply to small employers, although the threshold for this has yet to be determined.