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Covid-19 Pandemic Supports

Dáil Éireann Debate, Wednesday - 23 June 2021

Wednesday, 23 June 2021

Questions (89, 90, 91, 92)

Kathleen Funchion

Question:

89. Deputy Kathleen Funchion asked the Minister for Finance the amount of funding allocated in 2020 and 2021 to the employment wage subsidy scheme; the amount drawn down in tabular form; and if he will make a statement on the matter. [33688/21]

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Kathleen Funchion

Question:

90. Deputy Kathleen Funchion asked the Minister for Finance the amount of funding allocated in 2020 and 2021 to the temporary wage subsidy scheme; and the amount drawn down in tabular form. [33689/21]

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Kathleen Funchion

Question:

91. Deputy Kathleen Funchion asked the Minister for Finance the amount of funding allocated in 2020 and 2021 to the employment wage subsidy scheme for ECCE pay; and the amount of this allocation drawn down in tabular form. [33733/21]

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Kathleen Funchion

Question:

92. Deputy Kathleen Funchion asked the Minister for Finance the amount of funding allocated in 2020 and 2021 to the employment wage subsidy scheme for NCS pay; and the amount of this allocation drawn down in tabular form. [33734/21]

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Written answers

I propose to take Questions Nos. 89 to 92, inclusive, together.

The Temporary Wage Subsidy Scheme (TWSS) was in place for 22 weeks between 26 March and 31 August 2020. It was introduced as an emergency income support for eligible employees where the employer’s business activities were negatively impacted by the COVID-19 pandemic. Over 66,600 employers received a subsidy under the TWSS with payments of €2.8 billion paid out to a total of 664,500 workers. The scheme operated until 31 August 2020 and was replaced by the Employment Wage Subsidy Scheme (EWSS) from 1 September 2020.

Section 28B of the Emergency Measures in the Public Interest (Covid-19) Act 2020 provides for the operation of the EWSS, which is an economy-wide enterprise support for eligible businesses in respect of eligible employees. It provides a flat-rate subsidy to qualifying employers based on the numbers of paid and eligible employees on the employer’s payroll and charges a reduced rate of employer PRSI of 0.5% on wages paid which are eligible for the subsidy payment.

To date, EWSS payments of over €3.521 billion and PRSI credit of over €575 million have been granted to over 50,000 employers in respect of over 583,000 employees.

While the criteria for eligibility for business in general is based on a reduction in turnover, as a result of the pandemic and having regard to the importance of maintaining the provision of childcare facilities so as to enable parents to continue in, or to take up, position of employment, the legislation provided that childcare businesses in possession of tax clearance and registered in accordance with Section 58C of the Childcare Act 1991 are eligible for the EWSS.

The objective of scheme is to support all employment and maintain the link between the employer and employee insofar as is possible. The EWSS has been a key component of the Government’s response to the continued Covid-19 crisis to support viable firms and encourage employment in the midst of these very challenging times.

I have been clear that there will be no cliff-edge to the EWSS and, as the Deputy will be aware from announcements made on Tuesday 1st June, it has been decided that the scheme is now to be extended until the end of December 2021.

With the agreement by Government on the revised plan, COVID-19 Resilience and Recovery 2021: The Path Ahead, a cautious and measured approach will be taken as we lay the foundations for the full recovery of social life, public services and the economy. It is therefore appropriate that key business supports should remain in place until the end of December 2021.

As the revised plan is implemented, the EWSS will play an important role in getting people back to work as public health restrictions are eased, thereby reducing the numbers dependent on social welfare payments over time, including the Pandemic Unemployment Payment (PUP).

For Q3 2021, the Government has decided to broadly maintain the status quo for EWSS, including the enhanced rates of support, with a modification to widen eligibility, and maintaining the reduced rate of Employers’ PRSI of 0.5%. There are no changes in respect of the qualification criteria for EWSS eligibility for the childcare sector.

The Government has approved the extension of the EWSS for Q4 2021, however, it is considered too early as yet to prescribe the precise operational parameters of the scheme that should apply for that quarter. Decisions in that regard will be taken closer to the time, possibly around the end of August/early September, with the benefit of more up-to-date information on a number of variables, including the overall epidemiological situation, progress made in reopening all sectors of the economy, the vaccine efficacy, as well as the operation of the EWSS during the early parts of Q3. As such, no decisions have yet been taken on any changes to the scheme for Q4 2021.

It is important that, as the recovery gains further momentum, supports are further recalibrated in the longer-term interests of businesses that are in receipt of those supports and in the interests of the wider body of taxpayers. As such and as already signalled, for Q4, consideration will be given to a future change to EWSS which will require an employer contribution towards employee wages. As with all firms that will benefit from the scheme in the months ahead, businesses in the childcare sector also would be subject to the impact of this potential change.

With regard to the Deputy’s questions in relation to the amount of funding allocated to the EWSS generally and for specific childcare sub-sectors, the position is that it is a demand led scheme and as such the cost is driven by the number of employers and employees supported by the scheme. This was also the case for its predecessor, the TWSS. My Department develops cost estimates to inform the Government in good time in advance of any specific decisions being made in respect of the scheme. The process involves liaison and cooperation, as appropriate, with the Department of Public Expenditure and Reform and with the Department of Social Protection.

However, due to the fact that EWSS operates as a demand led scheme, a particular amount of funding is not allocated to any specific sector, including the childcare sector. This was the case in relation to the TWSS also. The EWSS is administered by Revenue and is paid for by funds allocated to the Department of Social Protection.

To assist the Deputy in understanding the extent to which the TWSS and EWSS supported the childcare sector, the table below provided by Revenue, gives an indication of the number of employers supported and the amount of subsidies paid out under the EWSS and TWSS to employers in the childcare sector, from inception of each scheme to May 2021 (the latest available data). This data is based on businesses classified to the childcare sector using the NACE code classification system.

Number(Employers)

€m

TWSS

March 2020

420

2.7

April 2020

2,100

25.6

May 2020

2,210

23.0

June 2020

2,230

20.4

July 2020

1,640

19.6

August 2020

1,610

16.8

EWSS

July/August 2020

360

1.1

September 2020

2,310

16.5

October 2020

2,400

25.0

November 2020

2,410

27.0

December 2020

2,400

29.5

January 2021

2,440

27.8

February 2021

2,480

26.0

March 2021

2.520

28.1

April 2021

2,470

30.6

May 2021

2,460

28.1

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