Question :
I have my own small business as a Health and Safety Consultant. I take drawings rather than a salary. I personally employ an au pair to look after my children while I work. In this capacity, I am registered as an employer with Inland Revenue. I have applied for the wage subsidy for myself through my business and that money will help cover my costs during this time but I am not taking any drawings as I need to keep the money in the business. My question is, can I apply for the subsidy to pay my au pair? I still have to pay her for 40 hours a week even though I don’t need her for those hours. Lastly, my husbands income has not changed and this is our main household income, my drawings top it up each month. Thanks in advance for your advice.

Question submitted 02/04/20 @ 10:09am
Industry: COVID-19 Funding & Support
  • Hi Rebecca – I am not 100% sure on this, albeit I think the key aspect will be what is the status of your pair’s employment and does she pay her tax or do you pay her tax/withholding payments? If she is employed by you, and you handle her tax then you can apply for the subsidy for her. However, if she is effectively a contractor herself, arguably part-time then she can herself apply for the subsidy. If she is totally on cash based payments, I really don’t know the full status, I will see if I can get one of our helpful lawyers to have a look at this and add to the below. Andy

    Thanks Andy. We pay for a payroll service to do her PAYE for us, so effectively yes we do that for her. She is an employee not a contractor.

    In that case, I can’t see any reason why you could not apply for her – just checking that she is probably defined as part-time, but I could be wrong – I have asked a couple more to come on board and give you some guidance. Hope to get you an answer quick.

    Hi Rebecca, as you have been taking drawings and do not appear to have personally derived any income I expect that you will not satisfy the 30% revenue reduction test and will therefore not satisfy the criteria to apply for the wage subsidy for the au pair you employ privately. An avenue may exist if a non-cash salary has been allocated to your current account to offset your drawings in which case a reduction in this salary could provide a basis for you to apply for the wage subsidy on behalf of your au pair.

    Thanks for your reply Darren!

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