New Metlifecare board decides to repay $6.8m wage subsidy

Metlifecare's new board decided on the repayment. Photo / Natalie Slade

Retirement giant Metlifecare says it will repay the $6.8 million wage subsidy, its new owner saying the return honours the spirit of the Government scheme.

The new board has issued a statement today saying it got the money in April but will repay it in full.

Paul McClintock, the chairman, said: "The whole Metlifecare team has done an extraordinary job in managing the Covid-19 crisis and should be commended for their efforts.

"Metlifecare maintained its high standards of care for residents whilst also supporting the safety and health of its staff throughout this challenging period. While Covid-19 has created significant and lasting economic uncertainty globally and in New Zealand, and Metlifecare did qualify for the scheme, EQT and the Board has now determined that repaying the wage subsidy is the right thing to do."

Metlifecare is now owned by Swedish giant EQT whose representative Ken Wong said it was only right to return the money.

"EQT is very conscious this scheme was put in place by the Government to support vulnerable businesses through a period of unprecedented uncertainty.

"Given the valuable work undertaken by all Metlifecare staff through the Covid crisis and the essential nature of all Metlifecare employees, EQT believes that it is in the spirit of the scheme to return the subsidy," Wong said.

The new board is McClintock who chairs Australia's St Vincent's Health, ex-MP Jonathan Coleman, Kāinga Ora programme director Ken Lotu-Iiga, Bupa operational director Maggie Owens, Murray Jordan who is also on the boards of Chorus, SkyCity, Southern Cross, Stevenson Group and the Starship Foundation and EQT's Wong.

Metlifecare was established in 1984 and has 25 villages throughout New Zealand, mainly in the upper North Island.

EQT bought it for $1.27b in a controversial takeover opposed by ex-Metlifecare chairman Kim Ellis, the NZ Shareholders' Association and investors Matt Goodson of Salt and Craig Priscott.

Metlifecare made a net after-tax loss of $33.7m for the June 2020 year, compared to a $51.2m profit the previous year. Yet revenue rose 7.7 per cent and the loss was only on paper, due to valuers' assessment of the investment property. Those values rose $53.9m in 2019 but this year fell $74.8m.

Businesses have been reported to have repaid hundreds of millions of dollars in wage subsidies they found they did not need.

By July, it was reported that nearly 10,500 recipients of the wage subsidy had paid the money back, totalling $323.6m.

More than 10,000 companies have been audited to check they have met the rules of the Government's wage-subsidy programme.

On October 30, it was reported that more than $14b has been paid in wage subsidies, with some of the larger recipients since reporting profits and paying dividends.

That has raised questions about the eligibility requirements.

Ryman Napier received $780,500 for 136 employees, according to the employer search. Other Ryman businesses applied for the subsidy under other names.

Summerset Management Group got $8.6m for 1344 employees, the scheme run by Work and Income showed.

Jeremy Nicoll of Arvida said today that business claimed $400,000 "in relation to some builders and café workers that were unable to work from home during the lockdown".

Julian Cook, Summerset chief executive, said the $8.6m was used "to preserve jobs. Paying back the wage subsidy continues to be under review in the context of the full impact of the lockdown, any future outbreaks, and our financial outlook."