The EWSS was introduced by the Financial Provisions (Covid-19) Act 2020. The scheme replaced the Temporary Wage Subsidy Scheme (TWSS) from 1 September 2020 and will run until 31 March 2021. The scheme provides a flat-rate subsidy to qualifying employers based on the numbers of eligible employees on the employer’s payroll and gross pay to employees.
Eligibility
To qualify for the EWSS an employer must demonstrate
- their business will experience a 30% reduction in turnover or customer orders between 1 July and 31 December 2020; and
- Covid-19 is the cause of this disruption.
The reduction in turnover or customer orders is relative to
- The same period in 2019 for a business in existence prior to 1 July 2019;
- The date of commencement to 31 December 2019; or
- Where a business commenced after 1 November 2019, the projected turnover or customer orders
Employer’s are required to carry out a monthly review to ensure that they continue to meet the eligibility criteria and to de-register where they no longer qualify under the scheme.
The turnover test does not apply to childcare businesses, registered in accordance with Section 58C of the Childcare Act 1991.
An employer is required to have tax clearance from the Revenue in order to be eligible for the EWSS.
Additionally the Revenue have confirmed that the EWSS is available to employers who have had to temporarily close their business due to level 5 public health restrictions in respect of eligible employees that are maintained in the payroll during the period they are closed.
Employee eligibility
A subsidy can be claimed for eligible employees. An employee is eligible where they are in receipt of weekly gross wages of between €151.50 and €1,462.
The Revenue Commissioners
confirmed that the EWSS can be claimed in respect of Proprietary Directors where
- The employer meets the eligibility criteria of the EWSS;
- The proprietary director is on the payroll of the eligible employer; and
- The proprietary director has been paid wages which were reported to Revenue on the payroll of the eligible employer at any stage between 1 July 2019 and 30 June 2020
Where a person is a proprietary director of two or more eligible companies, a claim for EWSS can only be submitted in respect of a single company
Registration
Registration for eligible employers has been available through Revenue’s Online Service (ROS) since 20 August 2020.
Operation of the EWSS
Unlike the TWSS the PAYE system must be operated on payments made to eligible employees under the EWSS. This means that PAYE, USC and employees PRSI is operated by the employer with the employee receiving their wages net of tax.
A .5% rate of employer’s PRSI applies to wages that are eligible for the subsidy. However, an employer must report and apply the full rates of employee and employer PRSI. The Revenue Commissioners will apply the reduced .5% rate for eligible employees and revise monthly employer PRSI liabilities accordingly.
Subsidy Rates
Under the scheme a flat rate subsidy is paid determined by the gross weekly earnings of eligible employees.
The Minister for Finance, Paschal Donohoe, T.D. recently announced that the rates of subsidy under the EWSS were to be revised to achieve better alignment with the Pandemic Unemployment Payment rates. The revised EWSS subsidy rates are effective in respect of payroll submissions with pay dates on or after 20
th October 2020 and are expected to remain in place until 31 January 2020.
The revised rates are as follows
- Between €151.50 and €202.99 gross per week – subsidy of €203 (previously €151.50)
- Between €203 and €209.99 – subsidy of €250
- Between €300 and €399.99 – subsidy of €300
- Between €400 and €1,462 – subsidy of €350
There continues to be no subsidy available for employees paid less than €151.50 or more than €1,462 gross per week.
Frequency of EWSS payments
The EWSS was originally designed to pay the subsidy due once a month in arrears as soon as possible after the due date of the relevant monthly Employer PAYE return (the 14th of the following month).
On
6 October 2020, Revenue announced that it had brought forward the date for EWSS payments to the fifth day of the following month. October EWSS payments, including the increased rates announced by the Minister for Finance in respect of payroll submissions with pay dates on or after 20 October 2020, will be paid by 5 November 2020.
Revenue is currently working to further significantly shorten the EWSS payment timeframe. In this regard, the first EWSS payments in respect of November payrolls will be made in early November, rather than by 5 December. Thereafter, subsequent payments for November will be paid following the receipt of a payroll submission containing an EWSS claim. This means EWSS will be paid on a similar basis to the Temporary Wage Subsidy Scheme (TWSS), providing a significant positive cashflow boost for businesses.
July/August Sweepback
Under the July/August Sweepback and eligible employer can backdate a claim to 1 July 2020 in respect of newly hired and seasonal employees and employees not previously included in the TWSS. A claim can be made by downloading and populating a
sweepback template and submitting the claim using Revenue’s Online Service (ROS) before 14 October 2020.
Publication
The names and addresses of employers who claimed the EWSS will be published on the Revenue website in January and April 2021.
Assurance Checks
Revenue will undertake assurance checks in relation to the operation of the scheme. It is important therefore that appropriate records in relation to the operation of the scheme are retained. Further details are to be issued as to how this program of assurance checks will operate.
Useful information