Dáil Éireann Debate, Thursday - 10 February 2022
238. Deputy Kathleen Funchion asked the Minister for Finance if the employment wage subsidy scheme supports for ELC and SAC services reduced from €350 per week to €200 - €150 per week on 1 February 2022, will reduce on 28 February 2022 to €100 and remain at this level until the end of April 2022. [7146/22]
View answerThe objective of the Employment Wage Subsidy Scheme (EWSS) is to support 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 Covid-19 crisis. It is an economy-wide scheme that operates across all sectors.
In money terms, the overall support provided to-date (3rd February) by EWSS is over €7.3 billion comprising direct subsidy payments of €6.34 billion and PRSI forgone of €989 million to 51,900 employers in respect of over 711,600 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, positions 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 Government and I have been clear that there will be no cliff edge to supports for employers but we have also been clear that the EWSS cannot run indefinitely, nor is it sustainable to continue with the enhanced rates for a prolonged period of time given the very substantial costs to the Exchequer.
As part of Budget 2022, the Government agreed the future of EWSS including its graduated exit strategy. These arrangements were subsequently enhanced in response to the public health situation, namely the extension of the enhanced rates of subsidy for a further two months (across December 2021 and January 2022) and the reopening of the scheme for certain businesses as announced on 9 and 21 December 2021 respectively.
From 1 February 2022, for most businesses including those in the childcare sector, the original two-rate structure of €203 per week and €151.50 per week will apply; for March and April 2022 the flat rate subsidy of €100 per week will apply and the scheme will end on 30 April 2022.
As the Deputy will be aware on 21 January 2022, I announced that businesses availing of EWSS that were directly impacted by the public health regulations of last December, will continue to receive the enhanced rates of subsidy for the month of February and the graduated step-down in subsidy rates will be delayed by one month with such firms continuing to receive support under the scheme until 31 May 2022.
Since the introduction of EWSS there has been regular and, where necessary, detailed engagement between my Department and the Department of Children, Equality, Disability, Integration and Youth (D/CEDIY). Analysis undertaken by D/CEDIY informed the approach taken with regard to the childcare sector. Childcare business will continue to benefit from the EWSS exemption until end April 2022.
As announced by my colleague, Minister O’Gorman, it is intended to put in place a transition fund between May and August 2022, which early learning and childcare providers can access. From September 2022, a major new funding stream will be introduced, to support providers in meeting their operating costs in return for a commitment that fees to parents will not increase.
Therefore, I am satisfied that a coherent approach has been taken as regards the exit strategy for EWSS and the introduction of the new funding stream for the childcare sector.
Finally, as has been the case to date, the Government will continue to monitor developments.
