On 23 July last, the Government announced the Employment Wage Subsidy Scheme (EWSS). This provides economy-wide enterprise support to give a flat-rate subsidy to eligible employers on the basis of the numbers of paid and eligible employees on the employer’s payroll. The EWSS replaces the Temporary Wage Subsidy Scheme (TWSS) for pay dates on or after 1 September 2020 and is expected to continue until 31 March 2021.
If you wish to avail of the EWSS it is necessary to meet the qualifying criteria and register to participate in the scheme. The general eligibility criteria require that your business experiences, as a result of the COVID-19 pandemic, a 30% reduction in turnover or orders between 1 July and 31 December 2020. Childcare businesses registered in accordance with Section 58C of the Child Care Act 1991 are also included in the scheme.
Under the scheme the following subsidy amounts apply:
Employee Gross Weekly Wage Subsidy Payable
Less than € 151.50 Nil
From € 151.50 to € 202.99 € 151.50
From € 203 to € 1,462 € 203
More than € 1,462 Nil
Employers are required to operate and make their payroll submissions as normal and Revenue will calculate the subsidy payable based on these submissions on a monthly basis on the 15th of the following month. The subsidy will be paid to the employer as soon as practicable thereafter.
While employers are required to report and apply the full rates of employer and employee PRSI, on receipt of payroll submissions, Revenue will apply a reduced rate of 0.5% employer PRSI in respect of employees for whom a subsidy is payable i.e. where gross weekly wage is between € 151.50 and € 1,462. Monthly employer PRSI liabilities will be revised accordingly by Revenue and any resulting PRSI credit will be available for offset against future employer PAYE/PRSI liabilities.
Employers eligible for EWSS who were either ineligible for TWSS, or who had employees ineligible for TWSS, can claim EWSS in respect of these employees for pay dates from 1 July 2020 onwards. Revenue will pay the subsidy in these circumstances, as soon as practicable after 15 September 2020.
From 18 August onwards, you, your agent or payroll provider will be able to register for the EWSS through Revenue’s Online Service (ROS). Applications will only be processed if you are registered for Employer’s PAYE/PRSI (PREM), have a bank account linked to the PREM registration and have tax clearance.
Employers must have tax clearance to be eligible to join the EWSS and remain tax cleared to continue receiving the EWSS benefits over the course of the scheme. To qualify for tax clearance, employers must be compliant with all obligations under tax legislation in relation to the filing of tax returns and payment of taxes. If you have filed all your tax returns but are not in a position to pay all your tax liabilities, and have tax debts that cannot be ‘warehoused’ under Revenue’s COVID-19 debt warehousing scheme, you can still obtain tax clearance if you enter a phased payment arrangement with Revenue.
As part of the Government Stimulus Package, a reduced annual interest rate of 3% is available in respect of tax debts that relate to periods prior to the onset of the COVID-19 pandemic and are included in a phased payment arrangement. In these circumstances, the reduced rate is available across all tax types and represents a significant reduction on the standard annual rates of 8% and 10% that normally apply. To avail of this measure, taxpayers must agree to a phased payment arrangement before 30 September 2020.
Information on the reduced interest rate and other stimulus measures relating to tax debts is available at www.revenue.ie/en/corporate/communications/documents/debt-warehousing-reduced-interest-measures.pdf.
Information on how to apply for tax clearance is available at www.revenue.ie/en/starting-a-business/tax-clearance/index.aspx.
Information and detailed guidance on the operation of the EWSS is available at www.revenue.ie/en/corporate/communications/covid19/employment-wage-subsidy-scheme.aspx