Our intentions: Looking at how the Wage Subsidy Scheme is managed
The Scheme provided a lump-sum payment for eligible employers. It was based on a weekly payment of $585.80 for each employee working 20 hours or more each week, and $350.00 for each employee working fewer than 20 hours each week.
Employers were required to use the money to pay employees. Employers were also required to use their best endeavours to pay employees at least 80% of their regular incomes for the period of the subsidy (unless their regular incomes were less than the subsidy).
We intend to look at how the Scheme has been managed. Our work will cover all the phases of the Scheme – the original 12 weeks’ support (the Wage Subsidy), the extension for a further eight weeks (the Wage Subsidy Extension), and the extra two weeks when there was a resurgence of Covid-19 in August 2020 (the Resurgence Wage Subsidy).
What we’re focusing on
The components of our work include our annual audits, the Controller function, and a performance audit.
During the annual audits, we will be looking at how the Ministry of Social Development has accounted for the public funds involved and reported on its performance in managing the Scheme.
We will also look at the applications for the subsidy made by the public organisations that have received the wage subsidy and the supporting evidence for those applications.
Through the Controller function, we will look at whether the Government has spent public money in line with the authority it has from Parliament.
Our performance audit will look at how effectively the Ministry of Social Development, and the Ministry of Business, Innovation and Employment, and the Inland Revenue Department have managed the Scheme. The Scheme uses a high-trust model, relying on applicants to make accurate declarations about their eligibility.
We will be seeking answers to the following questions:
- How well was the Scheme set up, given the policy direction of a high-trust model?
- Were payments effectively managed?
- How well was the integrity of the Scheme managed (including the recovery of money from anyone who might have deliberately or accidentally received more than they should have)?
- Was there effective oversight, monitoring, and review of how the Scheme was managed?
This is part of a wider suite of work we have planned to look at the Government’s response to the Covid-19 pandemic.
The difference we expect to make
Our work will provide the public and Parliament with an independent view on how well the Scheme has been managed. We expect to identify the challenges in operating high-trust models and lessons for decision makers.
We expect to complete the performance audit aspect of our work in the second quarter of 2021.
An important note
Please use the feedback form on the right if you’d like to speak to a staff member about this audit, make a suggestion, or ask a question.
Please note that any complaints about an employer who has participated in the Scheme need to go to Employment New Zealand.