Richard Bruton
Question:240. Deputy Richard Bruton asked the Minister for Finance if the extension of employment wage subsidy scheme to proprietors and executive directors of small businesses will be considered. [24901/20]
View answerTuesday, 22 September 2020
Questions (240)
Written answers
The Employment Wage Subsidy Scheme (EWSS) was legislated for in the Financial Provisions (Covid-19) (No. 2) Act 2020. The EWSS provides a flat-rate subsidy to qualifying employers, based on the number of qualifying employees on the payroll.
In order to be eligible for the scheme, an employer must be able to demonstrate that his or her business will experience a 30% reduction in turnover or customer orders between 1 July and 31 December 2020, by reference to the corresponding criteria in 2019, as a result of business disruption caused by the Covid-19 pandemic. Additionally, the employer must have a tax clearance certificate to be eligible to join the EWSS and must continue to meet the requirements for tax clearance throughout the scheme.
Executive directors are directors who are involved in the day to day management of the company. Executive directors are generally treated the same as ordinary employees provided, they are not also a proprietary director. Therefore, subject to the company meeting the eligibility conditions, the employer can claim a subsidy in respect of executive directors.
Proprietary directors are directors who can control, either directly or indirectly, more than 15% of the share capital of a company. Under the legislation as enacted, proprietary directors are not qualifying employees for the purposes of the scheme. However, as I announced at the end of July, this position has been revisited and the EWSS can be claimed by an eligible employer in respect of proprietary directors. Following the review of the matter undertaken by my Department and the Revenue Commissioners, it has been agreed that the only additional qualifying criteria that will apply in the case of proprietary directors as qualifying employees is that the proprietary director has to have been paid wages which were reported to Revenue on the payroll of the eligible employer at any stage between 1 July 2019 and 30 June 2020. Further, it has also been agreed that where a person is a proprietary director of two or more eligible companies, a claim for EWSS can only be submitted in respect of a single company only.
The amending legislation necessary to give a statutory footing to the above will be included in the Finance Bill later this year.
In the meantime, the above will be implemented by Revenue as confirmed in both a press release that was issued on 31 August (see https://www.revenue.ie/en/corporate/press-office/press-releases/2020/pr-310820-proprietary-directors-ewss-1-September.aspx) and the updated Guidance (see https://www.revenue.ie/en/corporate/communications/documents/ewss-guidelines.pdf).