Update NOW scheme, as published on the governments’ website on 31 March 2020 (in-house translation)
The expectation is that companies with more than 20% loss of turnover can apply for the NOW scheme through the UWV as from 6 April 2020. Companies will be notified within three to five weeks.
Companies with a loss of turnover of at least 20% for three months can receive a compensation of up to 90% of the wage sum in proportion to the loss of turnover as from 1 March 2020. A condition is that companies continue to pay their employees their regular salary and that companies do not apply for dismissal for economic reasons during the period in which the subsidy is received.
Determination of loss of turnover
In order to determine the amount of the loss of turnover, employers must first divide their total turnover over 2019 by four. They then compare this with the turnover in March-April-May 2020. However, sometimes a lack of customers is not reflected in the drop in turnover until a later point in time. That is why employers can also indicate a period for the turnover comparison that starts one or two months later.
If a company consists of a number of business units (legal entities) that together form a group, the decline in turnover for the entire group is maintained. Otherwise, the organisation of the group can have a major influence on the amount of the subsidy. In addition, the Dutch government believes it is up to a group to responsibly deal with its employees if there is no substantial decrease in turnover overall. According to the NOW scheme, foreign entities (within a group) that do not have employees who are paid and insured under the social insurances in the Netherlands are not taken into account for the application for the NOW scheme.
The UWV automatically uses the data from the Tax Authorities’ payroll tax return for the wage sum. The UWV uses the so-called social insurance wage as the basis. A surcharge of 30% is added for all employer contributions, such as the accrual of holiday allowances, pension and employer contributions. There is also a maximum wage per employee which is capped at € 9,538 gross per month. Salary above this amount is not compensated.
The wage sum in the subsidy period is compared to the wage sum of January 2020, as known to the Tax Authorities. If this is not available, the wage sum of November 2019 will be taken into account. In order to prevent misuse, changes in the wage tax return for January that are reported after 15 March 2020 are not included in this scheme. Because of the importance of the wage sum for the subsidy, it is important that employers continue to file their wage tax returns with the Tax Authorities in good time.
Everyone for whom a wage tax return is filed and who is insured under the social insurances is covered by the wage bill for which a subsidy can be received. The salary of flex workers is also compensated; there is no distinction by type of contract. The Dutch government calls on employers, together with employers’ and employees’ organisations, to continue to pay flex workers if possible. If the wage bill shrinks because fewer people continue to be paid, the subsidy will be reduced accordingly. The salary of flex workers is also compensated; there is no distinction with respect to the type of contract.
The employer is not expected to apply to the UWV for permission to terminate an employment contract for economic reasons in the period from 18 March until and including 31 May 2020. This condition does not apply to dismissal applications submitted to the UWV during the period from 1 March until and including 17 March 2020.
The application period shall run until and including 31 May 2020. Employers must state the expected decline in turnover in the application. If the UWV gives a positive assessment, the UWV will pay out an advance of 80%. This is done in three instalments. The first part of the advance will be paid within two to four weeks after the application has been submitted, although the UWV expects that this can be done more quickly for most companies.
Within 24 weeks after the end of the period for which the NOW has been granted, the employer must apply for the subsidy to be determined. In principle, an accountant’s report is required for this. The UWV will then make a final statement of account within 22 weeks. This may be higher or lower than expected at the time of the first statement.
The Dutch government will monitor the exact operation of the measure and – if necessary and if practicable – make adjustments.
Work time reduction scheme
The NOW scheme replaces the work time reduction scheme. Companies who have already made use of the work time reduction scheme will be informed of what they still need to submit in order to qualify for the NOW scheme.
If you have any questions regarding the above, please do not hesitate to contact us.