Dáil Éireann Debate, Tuesday - 15 September 2020
251. Deputy Neale Richmond asked the Minister for Finance the status of the review of the employment wage subsidy scheme as it relates to cash flow issues for businesses; and if he will make a statement on the matter. [23297/20]
Amharc ar fhreagraThe Employment Wage Subsidy Scheme (EWSS) is an economy-wide enterprise support that gives a flat rate subsidy to qualifying employers to preserve the link between employee and employer and support firm viability through an unprecedented enterprise environment.
The EWSS has been in operation since July and it replaced the Temporary Wage Subsidy Scheme (TWSS) from 1 September 2020. It will remain in place until March 2021, thereby allowing employers to rely on the continuation of support over a longer period of 8 months while also ensuring such support is sustainable and affordable.
As set out in the recently enacted Financial Provisions (Covid-19) (No. 2) Act 2020, payment of the EWSS will be made following receipt of the regular monthly payroll return to Revenue which is due on the 14th of the month following payment of the emoluments. The transfer of the subsidy will, in general, be made within two working days after receipt of the monthly payroll submission. Depending on the pay-date used by the employer, this may be as short a turnaround as 16 days, although it could be up to 6 weeks after the pay date in some cases.
The up-to-date position is that having regard to the timeline for employers to make claims to Revenue for support under EWSS, which aligns with the normal operation of the PAYE system, it is likely to be closer to the end of this month or early next month before we are in a position to get a fuller picture of the operation of the payment system and to evaluate its efficacy.
The main purpose behind the adaption from the TWSS is to reduce the administrative burden of the scheme for employers by regularising the procedure for the processing of payments, and thereby reduce errors and the need for reconciliations which have had to take place under the TWSS.
It is acknowledged that the turnaround time for payments under the TWSS in some cases was shorter, but this is one of a number of changes in the nature and operation of the EWSS, many of which are more flexible than the TWSS – for example, the types of worker who qualify has been broadened to include seasonal workers and new hires.
Many of the strictest public health restrictions on the economy have been eased and it is expected that businesses are able to shoulder more of the economic burden of their businesses, so it is appropriate that the level of State subsidy be moderated. At the same time, it is recognised that economic outputs are unlikely to return to normal for many businesses for much of the rest of 2020, which is why the Government remains committed to supporting employers by means of a wage subsidy.
For these businesses who need further support, or who experience cash-flow difficulties arising for the timing of the subsidy payments, there are a number of options open to them – including State backed loans which may be repaid using EWSS funds as well as grants. Particular attention is drawn to the comprehensive package of business and employer supports that have been made available as part of the July Stimulus Plan - including the Credit Guarantee Scheme, the SBCI Working Capital Scheme, Sustaining Enterprise Fund, and the Covid-19 Business Loans Scheme.
