On 21 January 2021, the government announced that the extended NOW-3 scheme will be amended. It was originally planned that the NOW- 3 would be cut in three-month increments. To this end, the NOW 3 was split into three time periods, with the subsidy getting lower and lower and the threshold getting higher. However, reality is catching up with the plans. The lockdown demands a lot from entrepreneurs and an implementation of the austerity would kill a group of entrepreneurs - with the end in sight. Reason enough to abandon the austerity and readjust the scheme.
With no retrenchment, and even an increase in the subsidy, the hope is that everyone will make it to the end of the corona crisis. The possibility of reducing the wage bill - with no impact on the subsidy - under conditions remains, so that even now business operations can be adapted to the changed circumstances.
An overview of the original NOW-3 scheme can be found in this article. Below is a discussion of the January 2021 amendments.
The NOW 3.1 period looked at the fourth quarter of 2021 and has now expired. No more subsidy can be applied for on this. NOW 3.2 and 3.3 cover quarter 1 and quarter 2 of 2021 respectively.
For NOW 3.2 and 3.3, employers facing at least 20% turnover loss can apply to the UWV for up to 85% relief (this was 80% under NOW 3.1). The turnover loss for NOW 3.2 will be determined over a three-month period starting on 1 January, 1 February or 1 March 2021. The initial austerity in the allowance of 70% and 60% respectively and the turnover loss threshold of 30% have now been dropped.
The subsidy per employee is capped at twice the daily wage (€9,538) in the first two periods. In the last period, it is capped at once the maximum daily wage, bringing the situation more in line with usual social security.
The NOW 3.3 will apply from 1 April to 1 July 2021. The turnover loss will then be determined over a three-month period starting on 1 April, 1 May or 1 June 2021. This is subject to the same conditions as under the NOW 3.2.
The government wants to allow employers with long-term turnover losses to reduce part of the wage bill without affecting the subsidy. Employers will have the option under NOW-3 to reduce the total wage bill per period by 10% (compared to the reference month of June 2020). The wage decrease can occur through, for example, natural attrition, voluntary departure, a settlement agreement or reorganisation. The discount for business economic redundancy, which still applied under NOW 2.0, will lapse.
The obligation for employers applying NOW to encourage their employees to engage in training remains. So does the ban on dividend and bonus payments. The fixed surcharge for employer expenses, such as holiday pay and pension contributions, remains at 40%.
For the second period of the NOW 3 scheme, the UWV intends to open the counter from 15 February to 14 March 2021. This will allow retroactive application for the second period, January to March 2021. For each period, an employer can decide whether or not to apply. Even if an employer has not applied for the NOW 1.0, 2.0 or 3.1, it can make use of the NOW 3. The determination of the subsidy will take place after the end of the three periods, starting from summer 2021.
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