On 23 July 2020, the Government announced its intention to introduce a new Employment Wage Subsidy Scheme (“EWSS”), which will replace the current Temporary Wage Subsidy Scheme (“TWSS”). Th new Scheme starts on 1 September 2020 and is set to run until end of March 2021.
The first thing to note with the new Scheme is that the qualification criteria for the EWSS differs from the current qualification criteria under the TWSS.
- Employers need a valid Tax Clearance Cert.
- Businesses must demonstrate that they expect a 30% reduction in turnover and/or orders between 1 July 2020 and 31 December 2020 as a result of Covid.
The reduction in turnover or orders is calculated by reference to:
(a) the same business period in 2019 where the business existed before 1 July 2019;
(b) the date of commencement to 31 December 2019; or
(c) where a business commenced after 1 November 2019, the projected turnover and/or orders.
There is an exception in respect of registered childcare providers, with the EWSS being available without the requirement to meet the 30% reduction in turnover.
All employees who are on the payroll at any time in the “qualifying period” (i.e. between 1 July 2020 and 31 March 2021) will be eligible for inclusion, including seasonal workers and new employees.
The EWSS will provide a flat-rate subsidy to qualifying employers based on the number of qualifying employees on the payroll:
|EMPLOYEE GROSS WEEKLY WAGES||SUBSIDY PAYABLE|
|Less than €151.50||€0.00|
|From €151.50 to €202.99||€151.50|
|More than €203 and less than €1,462||€203|
|More than €1,462||€0.00|
As is the case with the TWSS, the subsidy will be paid directly to the employer.
The employer will pay the employee their normal wages and will then receive a subsidy from Revenue in respect of each eligible employee, following submission of each payroll return.
Employers will need to make the usual deductions for PAYE, USC and employee PRSI. The fact that subsidy payments will now be subject to tax and USC in the normal way is a welcome development and should rectify the issues which are being caused by employees eligible under the TWSS continuing to accrue a tax liability which is to fall due at year-end. Employer PRSI will continue to apply at a reduced rate of 0.5%.
As is the case currently with the TWSS, the names and addresses of all employers who avail of the EWSS will be published on the Revenue Website.