Dáil Éireann Debate, Thursday - 8 September 2022
366. Deputy Ged Nash asked the Minister for Finance the number of employers that availed of the temporary Covid-19 wage subsidy scheme and the employment wage subsidy scheme that have been contacted by the Revenue Commissioners regarding repayments; the total amount of repayments due from employers under each scheme; and the total amount collected to date in tabular form. [42727/22]
Amharc ar fhreagra367. Deputy Ged Nash asked the Minister for Finance if he will provide an update on dividend withholding tax returns filed by temporary Covid-19 wage subsidy scheme and the employment wage subsidy scheme claimant companies in respect of distributions made in 2021 and to date in 2022; and if he will make a statement on the matter. [42728/22]
Amharc ar fhreagra368. Deputy Ged Nash asked the Minister for Finance further to Parliamentary Question No. 74 of 28 April 2022, the number of companies that availed of the temporary Covid-19 wage subsidy scheme and the employment wage subsidy scheme that filed dividend withholding tax returns; the number of companies in receipt of State support that filed DWT returns; the total gross subsidy payment received by companies that filed DWT returns; the number of companies to date which have fully or partially returned subsidies and the total amount returned; and if he will make a statement on the matter. [42729/22]
Amharc ar fhreagra370. Deputy Ged Nash asked the Minister for Finance the number of companies that availed of the Covid-19 restrictions support scheme which subsequently filed dividend withholding tax returns; the number of companies in receipt of State support that filed DWT returns; the total gross subsidy payment received by companies that filed DWT returns; and if he will make a statement on the matter. [42731/22]
Amharc ar fhreagraI propose to take Questions Nos. 366 to 368, inclusive, and 370 together.
The Temporary Wage Subsidy Scheme (TWSS) was provided for in section 28 of the Emergency Measures in the Public Interest (COVID-19) Act 2020, as amended, and the Employment Wage Subsidy Scheme (EWSS) was provided for in section 28B of that Act, as amended. Both of these economy-wide supports played a central role in helping to maintain the link between employers and employees between March 2020 and May 2022. TWSS provided supports to over 689,000 employees linked to almost 67,500 employers throughout the scheme. EWSS provided supports to almost 52,000 employers to secure employment for nearly 746,000 employees.
As regards eligibility for the schemes, an employer must have been able to demonstrate, to the satisfaction of Revenue, that its business experienced a decline of turnover or customer order values of 25% and 30% for TWSS and EWSS respectively, and that the decline in trade was as a result of a disruption to business caused by the Covid-19 pandemic. Furthermore, the employer was required to have a valid tax clearance certificate to be eligible to join the EWSS and to continue to meet the requirements for tax clearance throughout the scheme.
From June 2020, Revenue engaged in a phased programme of compliance checks on all TWSS participating employers. The compliance checks are now substantially complete with 13 checks ongoing. In March 2021 Revenue, using data provided by employers to Revenue via their payroll submissions, calculated the total TWSS subsidy paid to each employer, the total TWSS subsidy payable in respect of each employee and the total TWSS subsidy paid by the employer to their employees. The results of this reconciliation exercise are reflected in the table below.
Revenue undertook a risk-focused program of compliance interventions to safeguard the integrity of the EWSS. In late Q2 of this year, Revenue invited some 42,500 employers who received subsidy payments to perform a final self-review of their eligibility for all periods of the scheme and to repay any subsidy monies incorrectly claimed before 30 September 2022. To date, €3.3m subsidy has been repaid by 281 employers following that invitation.
The following is the overall position regarding subsidy payments and repayments made by employers under the wage subsidy schemes.
|
- |
EWSS |
TWSS |
|
Total recipients |
51,800 |
67,232 |
|
Total paid |
€7bn |
€2.8bn |
|
Contacts made regarding repayment issues |
7,728 |
38,049 |
|
Total repayment value agreed following contact |
€78.2m |
€258m |
|
Compliance contacts regarding repayments not yet resolved |
1,708 |
13 |
|
Repayments agreed with employers and included in the Debt Warehouse scheme |
€37m |
€50m |
|
Recipients who have returned all subsidies (amount repaid) |
542 (€57m) |
696 (€7.2m) |
|
Recipients who partially repaid subsidies (amount repaid) |
4,269 (€76.8m) |
31,300 (€258m) |
The Covid Restrictions Support Scheme (CRSS) was introduced by Section 11 of the Finance Act 2020 as a targeted support for businesses significantly impacted by restrictions introduced by the Government under public health regulations to combat the effects of the COVID-19 pandemic. It was available to entities who carried on a trade or trading activities, the profits of which are chargeable to tax under Case 1 of Schedule D. CRSS provided € 719m in support to over 22,000 businesses in respect of approximately 25,000 premises.
In order to be eligible for the CRSS, a number of conditions must have been satisfied, including that the person carrying on the business must have had an up-to-date tax clearance certificate throughout the scheme. In order to qualify for the CRSS following December 2021 restrictions, hospitality and indoor entertainment sectors qualified where the turnover from the relevant business activity in the period for which the restrictions were in operation was no more than 40% of the average turnover in a reference period.
The eligibility criteria for the schemes, as provided for in legislation, did not include any conditions regarding a company making distribution payments to shareholders. Companies making distributions have obligations to deduct and return Dividend Withholding Tax (DWT). DWT applies to a wide range and different types of distributions. This includes both intra-group distributions and dividends paid to shareholders, including both cash and non-cash distributions (e.g. distributions made in the form of the issue of additional shareholdings). The DWT return does not distinguish between these different forms of taxable distribution, nor does it set out the accounting period to which distributions may relate. Therefore, I am advised by Revenue that it is not possible to determine whether distribution payments relate to profit reserves earned before or during the pandemic.
Revenue carried out a short exercise to identify DWT returns filed by EWSS claimant companies in respect of distributions made in 2021. This showed that 866 employers, out of a total of nearly 50,000 who received EWSS payments, filed DWT returns advising of some form of distribution during 2021. However, it was not possible to determine whether the distributions were cash or non-cash in nature or whether any dividends were paid to shareholders. At that time, the 866 companies had received gross EWSS subsidy payments of € 396 m. 29 of these employers have returned all subsidies received totalling €28.7m while 121 have partially repaid EWSS received amounting to €8.6m.
There was and is no link or conditionality between eligibility for the schemes and the payment of distributions by companies. For that reason, and having regard to the considerations as outlined, I am advised by Revenue that the aforementioned exercise has not been repeated for 2022 or for recipients of any other subsidies, nor are there plans to do so.
It should be noted that the majority of companies that participated in the subsidy schemes did so because they had a reasonable expectation that their business would suffer a decline in turnover or customer orders as a decline in trade caused by the pandemic. I am satisfied that the schemes operated as effective and responsive instruments both to keep the economy afloat during the pandemic and aid economic recovery post pandemic.
