The Employment Wage Subsidy Scheme (“EWSS”), first announced as part of the government’s July Jobs Stimulus, is the new flat-rate subsidy support for employers. Employers that meet certain criteria can claim the EWSS from 1 July 2020.
An employer must demonstrate to Revenue’s satisfaction that a reduction of at least 30% in turnover or orders will occur, due to the impacts of COVID-19, in the period from 1 July to 31 December 2020 compared with the same period in 2019.
For employers who commenced their business later than 1 July 2019 and before 1 November 2019, the reduction in turnover or orders is relative to the date of commencement to 31 December 2019. Employers who commenced their businesses after 1 November 2019 the reduction is compared to projected turnover or orders had Covid-19 not arisen.
Employers registered under the Child Care Act 1991 may participate in the EWSS.
All employers who wish to avail of the EWSS, even if already registered for the Temporary Wage Subsidy Scheme (“TWSS”), must apply via ROS and submit a declaration of their eligibility for the new scheme.
- If an employee, in relation to the employer, was a qualifying employee for the TWSS.
- Any employee who during the period from 1 July 2020 to 31 March 2021 is in receipt of emoluments from the employer – seasonal and new hires are included.
- The legislation currently provides that proprietary directors do not qualify for the scheme. It is reported that the Minister for Finance has requested a review of this exclusion with the aim of admitting proprietary directors to the EWSS with effect from 1 September 2020 where they are retaining ordinary employees on their payroll.
Excluded from the scheme are employees who are connected (e.g. spouse, sibling, child) with the employer unless such employees were on the payroll of that employer and received a payment, during the period from 1 July 2019 to 30 June 2020.
The scheme is a weekly flat-rate amount payable per eligible employee based on gross weekly wages as follows:
Backdating of the support to 1 July 2020 is expected for eligible employers.
Employer’s PRSI for those employees for whom a subsidy is being claimed, will apply at a rate of 0.5%.
The scheme requires employers to review their business circumstances at the end of each month (excluding July 2020). If it transpires to the employer that reduction of at least 30% in turnover or customer orders will not occur, then the employer should:
- make a declaration that the employer is no longer an eligible employer for the scheme – this declaration will be effective from the first day of the next income tax month; and
- cease claiming the EWSS supports with effect from that date.
Interaction with the TWSS and timeline
July & August 2020 - the TWSS and EWSS will run in tandem
31 July 2020 - no new applications for the TWSS
31 August 2020 - TWSS will cease
1 September 2020 - EWSS replaces the TWSS
31 March 2021 - EWSS due to cease
An employer may not claim the EWSS for a selected employee if they are also availing of the TWSS for that employee.
However, eligible employers may operate both schemes during July and August for separate categories of employees e.g. an eligible employer can make a claim under the EWSS for new hires in July – new hires do not qualify under the TWSS conditions.
Guidance from Revenue on the scheme is expected to be published.
Employment Wage Subsidy Scheme
To hear more on the latest updates to the TWSS and EWSS from Grant Thornton and Revenue register for our webinar on Friday 7 August at 3pm.
DISCLAIMER: Please note that the content of this summary does not amount to professional advice. Legal and tax advice should be sought in respect of specific queries. The COVID-19 situation continues to evolve and this update is provided on the basis of information available as at 4 August 2020.