~ Stimulus support to launch this week, website goes live ~
PHILIPSBURG--Social and Health Insurances SZV has been designated as the entity to manage the payroll support programme of the St. Maarten Stimulus and Relief Plan (SSRP) from government.
Finance Minister Ardwell Irion said in a press release late last night that SZV had been entrusted by government to execute the COVID-19 Stimulus Payroll Support Plan on its behalf. Employers who want to apply for the Payroll Support Plan must have an active account for SZV’s Employer Portal. This form will be accessible via SZV Employer Portal as of Tuesday, April 21.
Employers who would like to make use of the Payroll Support Plan or the Lockdown Payroll Support Plan, are urged to read the detailed information on the COVID-19 Stimulus Payroll Support Plan at
www.ssrp.sx. They should register for an account for the SZV Employer Portal via
www.szv.sx and start gathering all supporting documents. They will then have to fill in the application form to request the Payroll Support Plan.
Irion said government will roll out the details of the SSRP this week. Government is working closely with SZV for the Payroll Support Plan, which is geared towards job retention and creating a buffer for the increasing economic impact. Government will pay a maximum of 80 per cent of payroll for qualifying businesses. The programme has been prepared for a period of three months maximum.
Irion said that although St. Maarten is still awaiting a response from the Netherlands on its request for aid to cover the proposed stimulus plan, and no COVID-19 financial support has thus far been received, government will start implementing the plan using existing government liquidity.
For employers to qualify for the Payroll Support Plan, they will have to prove that their revenue declined by more than 20 per cent as a result of COVID-19. In addition, government has introduced a programme for employers to support employees who do not qualify for the Payroll Support Plan but have a decline of revenue of more than 20 per cent in the month of April 2020 as a result of the lockdown. This additional programme is referred to as the Lockdown Payroll Support Plan.
The Lockdown Payroll Support Plan is for employers who do not qualify for the Payroll Support Plan and have a decline of their revenue of more than 20 per cent in April 2020 (compared with April 2019) as a result of the lockdown that was enforced by government. Payment of the applicable contribution for Lockdown Payroll Support Plan will be done via SZV between May 25 and May 30.
Government has launched a website regarding information on support:
www.ssrp.sx. Employees will be able to contact a digital Employee Helpdesk. The Employee Helpdesk will become operational as of noon on April 20. Employees will be able to ask questions and/or request information.
The Netherlands has provided no financial assistance thus far. The continuation of the stimulus plan as written is reliant on the approval and support of the stimulus plan being approved by the Netherlands, Irion said.
The Relief and Economic Stimulus Programme offers direct relief for payroll support for businesses that are impacted, and income support for sole proprietors, vendor licence holders, and bus and independent taxi drivers; income support for the unemployed; and liquidity support for the government.
The Income Support Programme includes income support for sole proprietors, vendor licence holders, and independent bus and taxi drivers who are facing revenue losses due to COVID-19. Qualifying applicants will receive up to NAf. 1,150. The St. Maarten Training Foundation (SMTF) will assist government with the administration of this part of the programme. The total cost of this part of the programme is estimated to be NAf. 1.34 million per month.
In addition to the established social assistance, which will continue to be provided, a COVID-19-specific Unemployment Support Programme has been developed. In a scenario in which payroll support is provided further limiting and reducing layoffs, NAf. 1,150 will be provided to persons who become unemployed due to COVID-19. A total of NAf. 3.6 million has been reserved.
This part of the programme will also be implemented with the administrative assistance of SMTF. Details of the application can be found at
www.ssrp.sx.
Irion said the closure of St. Maarten’s borders has resulted in a drastic decline in the country’s economic activity, which is further projected to have continued adverse effects on the major economic pillar, tourism.
The Central Bank for Curaçao and St. Maarten (CBCS) forecasts an economic contraction of approximately 30 per cent of the country’s gross domestic product (GDP) if the borders remain closed for six months.
As a result, the impact is not limited to the rapid increase of unemployment, but includes businesses and individuals failing to meet financial obligations, increased government budget deficits due to a sharp drop in tax revenues and increasing expenditures putting pressure on the balance of payments and foreign reserves coming under pressure.
Irion said St. Maarten is in dire need of financial assistance to implement measures to assist affected groups, mitigate any potential spill-over effects and restore growth, and confidence.
How to apply
According to a copy of the government’s stimulus plan, to apply for payroll support, employers will be required to submit their employee mutation forms to SZV online. Mutation forms are how employers are required to report changes regarding their employees to SZV. The changes normally reported are changes in wages, in the number of working hours per day, in the number of working days per week, and in the contract duration, and new contract information.
Employers would also be required to submit their monthly ZV and OV declarations for the support for April and for May; it is proposed that these be submitted no later than May 15.
According to the stimulus plan, regarding the procedure, employers will be required to submit their February and March 2019 Tax and Payment Declarations, and February and March 2020 Tax and Payment Declarations as proof of their revenue decrease of at least 20 per cent. Businesses with arrears will not be barred from qualifying.
Employers will also be required to sign a declaration before payments can be released to ensure that payroll support received is based on accurate information and that the employees will receive their net salaries as per the payroll support plan. SZV will process the mutation forms and make the payments to the employers via bank transfer.
In the SSRP, government proposes to pay up to 80 per cent of the payroll for qualifying businesses with a minimum of NAf. 1,150 for a full-time employee. The programme is estimated to cost NAf. 22.6 million per month. The main condition is that qualifying companies should keep their employees on their payroll to prevent mass layoffs. These companies will need to demonstrate that their revenue has decreased by more than 20 per cent because of the COVID-19 crisis.
As it relates to SSRP’s soft loan programme to support businesses facing revenue losses and to avoid layoffs, government is proposing in the SSRP to provide eligible employers a temporary wage subsidy for a period of three months. The subsidy will be equal to 80 per cent of their March 2020 payroll. Employers will be able to benefit from the support immediately by reducing their payments of wage tax and social premiums.
Government will also make available NAf. 33 million of additional support which will be targeted to small and medium-size businesses. This is intended to help viable businesses remain resilient. Government will provide direct lending at a minimum of 2.5 per cent to businesses with viable business models whose access to funding has diminished.
Businesses seeking support through this part of the programme would be required to contact their financial institutions with which they have a pre-existing relationship. Once the financial institution has made a positive assessment, it will notify an Oversight Committee who will signal the transfer of funds to the respective banks. The respective financial institutions would then pay the qualifying business.
The businesses will have a grace period of six months before their first loan payment is due and will then have a minimum of two years to pay off their loans to their banks. Minimum monthly payments of three per cent of the total borrowed can be made over the duration of the first two years at 2.5 per cent. After the two years, businesses will be granted another three years at an adjusted interest rate of five per cent. There will be no minimum monthly payments allowed.
All regular bank fees associated with the disbursement of the loan will be applied. Businesses will remit their monthly payments to the financial institutions, which will then credit the account of the Central Bank for Curaçao and St. Maarten (CBCS).
To qualify for the programme, businesses must have an existing relationship with a financial institution in the country; must be a small or medium-size business with fewer than 550 full and part-time employees; or can be a person who operates as a sole proprietor.
No collateral will be required, but a personal or business guarantee will be mandatory for the disbursement of the loan. Businesses that were in operation before March 15, 2020, and had employees for whom they paid salaries and associated premiums and taxes, or that paid independent contractors can also qualify.
Businesses can use the loan proceeds to make mortgage, lease, and utility payments.
According to government’s proposed relief plan, businesses will be able to borrow a maximum of 1.5 times their average monthly payroll cost between January and March 2020 that does not exceed NAf. 5,000,000. For sole proprietors, the maximum loan can be up to 1.5 times their average income from January to March 2020 that does not exceed NAf. 15,000. Excluded from payroll cost are individuals who gross more than NAf. 15,000 per month.
