Big law firms repay millions of dollars in wage subsidies

Wednesday, 6 May 2020

Subsidy has been paid to nearly 1000 companies who should'nt have received it.

Law firm Simpson Grierson has repaid the $2.3 million it received in wage subsidies.

There had been criticism of big law firms claiming payouts under the subsidy scheme, which is designed to help businesses that have experienced a 30 per cent or greater reduction in revenue as a result of Covid-19.

Among them, Bell Gully claimed $1.8m for 260 employees; Simpson Grierson, $2.3m for 335 staff; Duncan Cotterill, $1.4m for 215; Lane Neave, $1.1m for 162; Minter Ellison Rudd Watts, $2m for 300; and Meredith Connell, $1.6m for 236.

In a statement, Simpson Grierson said it repaid the money on Monday.

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Big law firms have been criticised for claiming Government handouts.

“We applied for the subsidy at the beginning of the lockdown in late March, based on a forecast decline in revenue due to the impacts of Covid-19 and in order to help protect the jobs and incomes of our people.

“While Covid-19 will continue to create significant challenges, we are now forecasting less impact on our revenue and in line with this we have repaid the subsidy.”

Meredith Connell Chief Executive Kylie Mooney said her firm expected to do something similar.

“For our firm, the Government’s scheme has been absolutely fantastic, working exactly as Grant Robertson intended, but most likely at no cost to taxpayers.

“It gave us the confidence to guarantee our entire 240-strong team that there would be no redundancies or pay cuts during the crisis, except for equity partners.

“This allowed us to keep the entire Meredith Connell team together, with everyone focussed on supporting clients, rather than worrying about their jobs, so that we haven’t experienced anything like the downturn in April we feared back in March.

“We’ve been careful to keep the taxpayers’ money in a trust account and, especially if the country moves to level 2 next week, it’s most likely we’ll be paying it all back soon.”

Minter Ellison Rudd Watts has also returned its subsidy.

'Our firm is currently performing better than we forecast coming into the alert level 4 lockdown, and so we have repaid the subsidy today,' said Andrew Poole, the firm's chief executive.

'From the outset, when we made the decision to apply for the wage subsidy, we hoped this would be possible.

'Business needs certainty and confidence for the economy to recover. While the impacts of Covid-19 will be felt for some time yet, the well-being of our staff has been and remains our key focus.'

Businesses that have claimed wage subsidies they now think they may not be entitles to have been warned by the Government to come forward.

Finance Minister Grant Robertson said the Government had a duty to all New Zealanders to make sure taxpayers' money was 'going to where it is intended to support the economy'.

'Everyone who has taken money from the wage subsidy scheme needs to know that our audit teams will be looking across the full sweep of applications,' he said.