Employee Wage Subsidy Scheme

Since the 1st of September 2020, the Employment Wage Subsidy Scheme (EWSS) has replaced the Government's Temporary Wage Subsidy Scheme (TWSS), which has provided wage supports to employers since its launch on 26 March 2020.

This new scheme will run until March 2021, with the possibility of extension after this date.

Under the EWSS scheme, employers in sectors impacted by COVID-19 whose turnover has fallen 30% will now get a flat-rate subsidy per week based on the number of qualifying employees on the payroll, including seasonal staff and new employees.

 

Eligible Companies

To qualify for the scheme, the company must:

  • Have valid Tax Clearance Certificate
  • Must be able to demonstrate that the business is expected to experience a 30% reduction in turnover between 1 July and 31 December 2020 looking at the period as whole rather than on a monthly basis; and
  • this disruption is caused by COVID-19

 

Eligible Employees

Employees are eligible if they are in receipt of weekly gross wages between €151.50 and €1,462 or a monthly gross wage between €656.50 and €6,335.33.

Proprietary directors are also eligible for the scheme provided that they are on the payroll within the eligible company and have been paid wages that were reported to Revenue through payroll between 1 July last year and 30 June 2020.

If you have a new employee (new hire or a seasonal worker), they can start the EWSS from 1 July 2020.

 

Rates

The subsidy amount paid to employers will depend on the gross income of each employee.

EWSS will give a flat-rate subsidy to qualifying employers, based on the number of qualifying employees on the payroll.

  • For every employee paid between €203 and €1,462 gross per week, the subsidy is €203.
  • For every employee paid between €151.50 and €202.99 gross per week, the subsidy is €151.50.

No subsidy is paid for employees paid less than €151.50 or more than €1,462 gross per week.

 

Income tax and PRSI deductions

Under the EWSS, employers will have to resume the normal requirement to operate PAYE on all payments. This means you should resume the regular deduction of income tax, USC and employee PRSI from your employees’ pay.

If an employment is eligible for the subsidy, a 0.5% rate of employer’s PRSI will apply.

 

Eligibility Review

On the last day of every month, you must complete a review to make sure you continue to meet the scheme’s eligibility criteria (looking at the period as a whole rather than on a monthly basis). If you no longer qualify, you must:

  • De-register for EWSS through ROS with effect from the 1st day of the next month
  • Stop claiming the subsidy

The requirement to do an eligibility review does not apply for July 2020 and the final month of the scheme.

You can get more information on eligibility reviews in Revenue’s EWSS Guidance here.

 

Compliance checks

Revenue will be contacting employers in the future to check records relating to the operation of the scheme including:

  • Evidence that you meet the eligibility criteria, specifically the reduction in turnover
  • Details of monthly eligibility reviews

More information on compliance checks will be made available by Revenue.

 

Proofs required

Applications for EWSS are based on self-assessment principles. This means you will not have to provide proof of eligibility to Revenue at the registration stage. Revenue will review eligibility in the future, based on risk criteria.

You should keep proof of your eligibility for the scheme (evidence of reduction in turnover and other evidence).

 

Registration for the Scheme

A separate registration process is required for EWSS as the eligibility criteria differs from the eligibility criteria for TWSS.

As part of the registration process, employers or their authorised agents are now required to sign a declaration.

Please also note that Revenue will publish a list of employers who operated the EWSS at the end of January 2021 and April 2021.

Please do not hesitate to contact us on plcaccounts@iconaccounting.ie for more information.

Author

Vanessa Leech

PLC

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