NEC4 - Covid - Main Option C - Are we entitled to deduct the Government wage subsidy from the value of the Compensation Event and the payment claim

Our Government have provided wage subsidies (approx $500 per person) payable to companies to give to employees as part of their salaries as an incentive to keep people employed during the Covid-19 Pandemic.

In the assement of the value of the Covid-19 Compensation Event for the target cost adjustment, is it fair to take into account this wage subsidy i.e. deduct it from the value of the Compensation Event under clause 52.1 “deduction for all discounts, rebates and taxes which can be recovered”.

Secondly seperate but linked given this is a target cost Contract and given that payment is based on actuals it is assumed that this wage subsidy should not be paid in the payment claim.

Your reasoning is correct in in both respects as clause 52.1 applies both to the assessment of compensation events under all options and reimbursement of Defined Costs for doing all the works under options C to F.