Dáil Éireann Debate, Tuesday - 15 September 2020
255. Deputy Denis Naughten asked the Minister for Finance if the decision will be reviewed to cease the temporary wage subsidy scheme to public houses that remain closed in view of the fact that these employers are not in a position to top up the employment wage subsidy scheme; and if he will make a statement on the matter. [23398/20]
View answer280. Deputy Ged Nash asked the Minister for Finance the estimated cost to revenue of returning the new EWSS to the payment levels and thresholds that previously existed under the TWSS; if he will provide a comparison between returning to the previous TWSS rates and the current EWSS rates in tabular form; and if he will make a statement on the matter. [23744/20]
View answerI propose to take Questions Nos. 255 and 280 together.
Between March and August 2020, over 65,000 employers received a subsidy under the Temporary Wage Subsidy Scheme (TWSS) with payments worth over €2.8 billion paid out to a total of 663,100 workers. The average monthly cost of the TWSS was around €500m which would be the expected cost per month if the measure was to be retained beyond the end date of 31 August.
The Employment Wage Subsidy Scheme (EWSS) was legislated for in the recently enacted Financial Provisions (Covid-19) (No. 2) Act 2020, replacing the TWSS from 1 September 2020 until March 2021. It provides a flat-rate subsidy to qualifying employers, based on the number of qualifying employees on the payroll. This adaptation from the TWSS will allow employers to rely on the continuation of support over a longer period of 8 months while also ensuring such support is sustainable and affordable. The EWSS is an economy wide scheme and it cannot be tailored to meet individual sectors’ needs. For businesses experiencing financial difficulties, there are a number of options open to them apart from the EWSS, including State backed loans and grants. Measures include the Credit Guarantee Scheme, the SBCI Working Capital Scheme, Sustaining Enterprise Fund, and the Covid-19 Business Loans Scheme.
It is expected that the EWSS will support around 350,000 jobs into the beginning of 2021. On this basis, it is estimated that the EWSS will cost €2.25 billion (€1.35 billion in 2020 inclusive of seasonal workers and €0.9 billion in 2021). The scheme is demand led and a significant surge in claims may require a policy review and re-evaluation of the terms of the scheme. These cost predictions are therefore subject to review and for every additional 50,000 qualifying employments, the cost increases by €0.25 billion.
The tentative costs per month between EWSS and TWSS are set out in the table below but it is emphasised that the cost of the EWSS is a projection and subject to review. Further, in both cases, the costs are on the basis of the schemes as implemented in their totality and individual elements of the scheme (such as the rates and qualifying criteria) have not been disaggregated. It is not possible to provide a reliable estimate of the cost of applying TWSS rates of payment to the EWSS as currently configured.
|
EWSS |
TWSS |
|
|
Total Cost |
€2.25 billion (8 months) |
€2.8 billion (6 months) |
|
Monthly Cost |
~€300 million |
~€500 million |
Although many of the strictest public health restrictions on the economy have been eased it is recognised that economic outputs are unlikely to return to normal for many businesses for much of the rest of 2020 because of the continued need to observe some requirements such as social distancing. The Government is therefore committed to a wage subsidy scheme to maintain the link between the employee and employer insofar as is possible into 2021. The position in relation to the EWSS, as with the Temporary Wage Subsidy Scheme (TWSS), does not affect any legal obligations that the employer may have to their employee as regards any terms, conditions or entitlements of their employment, including pay, sick pay or pension schemes.
I am satisfied that the EWSS will allow employers to rely on the continuation of support over a longer period of 8 months while also ensuring such support is sustainable and affordable. The level of subsidy being granted under the EWSS is commensurate with the average payment per worker under the TWSS which had been reducing since the start of June and since 14 August was €283 across all recipients and €219 in the case of first-time recipients.
