Wage Subsidy Scheme (WSS)
WAGE SUBSIDY SCHEME (WSS)
The Government through the Council of Minister's Decision No. 036 of 2022 has approved the rollout of a Third Policy Stimulus to assist businesses cushion the impact of the current COVID-19 restrictions due to community transmission in Vanuatu. The Council of Ministers has approved a number of programs under the third policy stimulus to support businesses. This package aims to give some breathing space to businesses in need, by supporting cash flow while they adapt to the 'new normal'. The Government sees this as an opportunity for businesses to adapt to these challenges and find opportunities in this economic environment. These schemes are:
- Small Business Grant (SBG) to support monthly cash flow until the end of August 2022 for all businesses with an annual turnover of less than VT 4 million;
- and a Wage Subsidy Scheme (WSS) to support businesses that are VAT-registered and distressed (“faenem se hemi hard blong winem mani') with their staffing costs until the end of August 2022.
Wage Subsidy Scheme (WSS)
Under this scheme, the Government will pay distressed businesses (as identified through a ‘stress test’ detailed below) 50% of the monthly wage level of each VNPF-registered employee, up to a maximum of VT 15,000 per month, over 6 months (from March to August 2022). The Ministry of Finance and Economic Management has already compiled a list of firms that meet the stress test and are eligible for help under this scheme.
The list of the Businesses can be found:Download here.
Eligible businesses must continue to pay their employees their total correct wage and VNPF contributions as normal, and then the Government will check VNPF submissions and reimburse the business afterwards for 50% of the wage up to a total of VT 15,000.Business are required to submit their VNPF employer receipts and schedule from February 2022 to date.
- Please download an application form in the format of an Excel spreadsheet from the website for the Department of Finance and Treasury www.doft.gov.vu (to do this you need to have access to a computer with the Microsoft Excel application)
- Fill in the Excel spreadsheet and make a copy of your business license and your VNPF Employer Certificate
For the purposes of this scheme, any business applying for the scheme must:
(a) have a valid business license for 2021;
(b) be registered for VAT and have submitted returns in 2020 and 2021;
(c) be identified as ‘distressed’ by MFEM, based on a stress test detailed below; and
(d) be registered with VNPF and have been contributing to their employees’ VNPF since at least February 2022.
Businesses will be identified as distressed based on a test that shows a reduction in turnover as declared in VAT returns. The amount of the fall in turnover that is required to meet the test will be equal to or greater than 30% (when comparing either turnover experienced in December 2021 against turnover experienced in December 2020, or turnover experienced in the 4th quarter of 2021 against turnover experienced in the 4th quarter of 2020). To calculate this, we take the 2020 value, minus the 2021 value, and divide this number by the 2020 value. If the result is equal to or greater than 0.3 (or 30%) then the business will be eligible for the Wage Subsidy Scheme.
- All businesses that are already eligible under the Second Policy Stimulus
- Businesses that have a valid license for 2021 (and provide a true copy of this license) issued by a licensing authority as per the Business License Act No. 19 of 1998.
- Businesses that are registered with VNPF and have been contributing to their employee’s VNPF
- Businesses that were registered for VAT and submitted returns in 2019 and 2020
- Businesses that are identified as ‘distressed’ based on a stress test indicating a reduction in turnover equal to or greater than 30% when comparing:
a) December 2021 and December 2020, or
b) the fourth quarter of 2021 and the fourth quarter of 2020
Businesses that submit an application form, in a format provided by MFEM, ensuring all fields required are provided, including:
- Contact details for the business owner
- Bank account details for the business (or a written letter from the owner to confirm alternative payment arrangements) and a letter from their bank confirming these details and that the bank account is active
- A declaration that all information provided is accurate
Businesses that do not benefit from the SBG scheme (businesses that are eligible for both schemes may choose which scheme to apply for)
Download application form here..