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09.09.2020

New Wage Subsidy Scheme qualifying criteria

By Marilyn Baxter

The Government announced the July Jobs Stimulus plan in late July. Part of the plan was the introduction of the Employment Wage Subsidy Scheme (EWSS). The EWSS came into effect in place of the Temporary Wage Subsidy Scheme (TWSS) on September 1st.

Despite the late July announcement, the EWSS has been available since the pay period beginning on July 1st. Having run parallel to the TWSS up until the end of August, the EWSS is expected to run until March 31st, 2021.

While the EWSS and TWSS are similar, some qualifying criteria changes have been made. Here, we look at what those changes are and how they may affect your business.

Changes to qualifying criteria

The introduction of the EWSS brought along changes to eligibility criteria.

One of the major changes is that businesses must show a 30% decrease in turnover or orders between July 1st and December 31st, 2020. The decline required for the TWSS was 25%, meaning the increase may prevent certain businesses from accessing the EWSS. Another major change to affect businesses is the reduced subsidy available which we will cover shortly.

Under the EWSS seasonal workers and new recruits are eligible. This was not the case under the TWSS.

The other change of note relates to tax clearance. Businesses applying to the EWSS must have a valid Tax Clearance Certificate to confirm the business’s tax affairs are in order. This can be arranged through Revenue’s online ROS system and businesses are encouraged to apply as soon as possible.

Reduced subsidy available

As mentioned earlier, one of the major changes is the subsidy amount. Businesses that qualify will receive the following subsidy per paid employee:

 

Employee Gross Weekly Wages Subsidy Payable
Less than € 151.50 Nil
From € 151.50 to € 202.99 € 151.50 per week
More than € 203 and less than € 1,462 €203 per week
More than € 1,462 Nil

 

This decrease will come as a hit for businesses that qualified for the TWSS, where wages were subsidised by up to €410 per worker per week.

There is also no subsidy available for workers earning less than €151.50 per week. That means that businesses who use lower-paid or part-time workers may be denied support under the scheme.

Changes to timing of payments

The EWSS poses a cashflow issue for businesses as the timing of payments has changed.

Where TWSS subsidies from Revenue were received within 48 hours of the submission of the relevant payroll details, the timeframe for receiving EWSS subsidies could now be up to six weeks.

Redundancies on the rise?

It’s estimated that almost 70,000 employers availed of the TWSS after it launched in March. It’s helped part pay the wages of nearly 600,000 employees for at least one payroll period.

Now though, with the EWSS’s stricter eligibility criteria in place and the reduced level of subsidy available, a rise in redundancies is predicted.

The suspension of redundancy claims by employees relating to short-time working and lay-off is set to expire on September 17th. As a result, we could see an increase in employees seeking statutory redundancy payments.

Need our help?

If you would like further complimentary advice on the Employment Wage Subsidy Scheme from an expert, our advisors are ready to take your call. Call us on 01 886 0350 or request a callback here.

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