Given the effect that this virus has had on the world over the past 6 months or so, and the likely flow for many months ahead, governments are scrambling to pull together assistance packages and relief measures; these are aimed to help embattled small to medium businesses and individuals.
This is the first part of a three-part article that will take a brief look at how the Government of the Hong Kong SAR is approaching this seemingly insurmountable challenge. We believe that any measures taken by the HKSAR Government will be welcomed by individuals and small businesses, as it is extremely difficult/near impossible for most to survive without regular income if they are unable to work.
Easing the Burden for Both Businesses and Individuals
The HKSAR Government so far has introduced more than 70 measures to help relieve the burden. In February we were introduced to the first round of the Anti-Epidemic Fund (AEF) of HK$30 billion, then HK$120 billion in relief measures introduced in the 2020/21 Hong Kong Budget.
In April 2020, there was the second round of the AEF totaling HK$137.5 billion to support and help businesses, employees and individuals reduce some financial weight.
Employment Support Scheme (ESS)
The ESS is a wage subsidy scheme introduced by the Government, to help encourage employers to keep their employees on staff.
The ESS is calculated based on 50% of monthly wages capped at HK$9,000 per employee, a month for up to six months. The ESS is based on the monthly wage of the employee from December 2019 to March 2020 which is designated by the employer.
Successful applicants will receive 2 payment instalments, with payments to be handed out three to four weeks after submission of the application.
Eligibility includes employers who do not undertake redundancies, wage cuts and give no-pay leave to their employees, make Mandatory Provident Fund (MPF) contributions or be part of an ORSO Scheme. For employers who are part of the ORSO Scheme to be eligible, individuals must have been a member on or before 31st March 2020.
Employees from government and statutory bodies, as well as government-assisted organizations, are also not eligible for this scheme. Additionally, individuals who have set up an MPF account after the 31st of March will not be eligible for the first wage subsidiary payment.
For areas such as catering, construction and transportation, who are not covered by the MPF will receive support through a separate sector-related scheme. The ESS will also cover those who are self-employed (SEPs) and have contributed to MPF, with a one-off subsidy to be given of $7500, regardless of the number of MPF accounts they may have.
From the 25th of May to the 14th of June, applications will be open for the first portion of subsidies for June, July and August. For SEPs who apply during these dates, their one-off payment will be given three to four weeks after approval. Application dates for the second portion have yet not been announced but will cover wages for September, October and November 2020.
Follow this link for the dedicated website on the ESS with an online application platform and additional information.
Next week in part 2, we will take a brief look at the Special 100% Guarantee on Loans to help with rent and wages for SMEs.
Disclaimer: The views, thoughts, and opinions expressed in the text belong solely to the author and should not be deemed to be legal or tax advice. No responsibility is accepted for errors or omissions. Readers are encouraged to seek professional advice regarding their respective situations.
