Tuesday, 29 September 2020

Ceisteanna (260, 286)

Carol Nolan


260. Deputy Carol Nolan asked the Minister for Finance the reason employers in a catering business must demonstrate that turnover has fallen 30% before they receive a flat-rate subsidy under the employment wage support scheme. [26370/20]

Amharc ar fhreagra

Róisín Shortall


286. Deputy Róisín Shortall asked the Minister for Finance further to Parliamentary Question No. 109 of 9 September 2020, if he will provide further clarification on matters raised in follow-up correspondence (details supplied) regarding the employment wage subsidy scheme; and if he will make a statement on the matter. [26936/20]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 260 and 286 together.

The Temporary Wage Subsidy Scheme (TWSS) operated from 26 March 2020 to 31 August 2020 and supported over 66,000 employers in respect of almost 664,000 employees that were negatively impacted by the necessary Covid-19 related restrictions, at a cost to the Exchequer of over €2.8 billion.

The Employment Wage Subsidy Scheme (EWSS) replaced the TWSS from 1 September 2020 as the Government’s focus has shifted from an employee income support paid via the employer that maintained the existing employee/employer relationship insofar as was possible, to a direct employer subsidy to help support viable firms and encourage employment, including prospective employment of new hires and seasonal workers. Its design reflects the changing environment around the COVID-19 pandemic which has shifted from crisis mode to one of living alongside the virus, in line with the recently announced Resilience and Recovery 2020-2021: Plan for Living with COVID-19.

I am advised by Revenue that, as of 25 September 2020, there were 36,746 employers registered for the EWSS which is considered a strong level of participation so far and, notably, over 82% of the employers availing of the TWSS when it finished at the end of August.

The EWSS “turnover test” has been specifically designed so as to target the subsidy at otherwise viable employers whose businesses continue to be adversely impacted by COVID-19 by requiring a comparison of the firm’s pre-pandemic operations with their current operations. The legislation provides that the employer must be able to demonstrate that they are operating at no more than 70% in either the turnover of the employer’s business or the customer orders received by the employer by reference to the period from July to December 2020 compared with the same period in 2019.

There is additional flexibility in the application of the turnover test to allow employers to take account of potentially sudden changes in turnover on a month-to-month “opt-in/opt-out” basis. Under the legislation, an employer is required to carry out a review of their turnover each month and confirm that they are still eligible for the scheme. At the same time, there is no cut-off deadline for access to the scheme, so if there is a reduction in turnover later in 2020 because of an unexpected reduction in business activity or a sudden change in business circumstances the employer may be entitled to make a claim for that future period.

The EWSS has broader application than the TWSS, for example to include employees that were not previously eligible, such as seasonal workers and newly hired personnel. The EWSS will also be in place for longer than the TWSS. The trade-off is that it has been necessary to narrow some other criteria to ensure the EWSS is sustainable in terms of cost.

I would note that the strictest public health measures that were in place in April and May have been eased and so it is reasonable to expect that businesses are able to shoulder more of the economic burden of their businesses. At the same time, the retention of a wage subsidy scheme is to recognise that economic outputs are unlikely to return to normal for many businesses for some time to come because of the continued need to observe public health requirements such as social distancing.

All the conditions of the turnover test have been carefully calibrated in that regard and there are no plans at present to re-visit the core eligibility criteria for the EWSS.

I will continue to closely monitor the administration of the EWSS as well as the uptake and utilisation of this important economy-wide employment measure in the weeks and months ahead to with a view to ensuring that it achieves its objective of supporting viable enterprises and employers. In fact, the relevant legislation obliges me to monitor and superintend the administration of the scheme and empowers me to make certain adjustments across the whole scheme where I determine that these are necessary.