Background of the Employment Wage Subsidy Scheme (EWSS)

On 23 July 2020, the Government announced the July Jobs Stimulus 2020, which provided for several measures to boost the economy and get people back to work. The legislation underpinning the tax measures announced in the July Jobs Stimulus, the Financial Provisions (Covid-19) (No. 2) Act 2020, was signed into law on 1 August 2020 and it inserted section 28B into the Emergency Measures in the Public Interest (Covid-19) Act 2020. This provided for the introduction of the Employment Wage Subsidy Scheme (EWSS) on 1 September 2020, which replaced the Temporary Wage Subsidy Scheme (TWSS), and was initially planned to run until 31 March 2021.

The scheme provided for a flat-rate subsidy to qualifying employers based on the numbers of eligible employees on the employer’s payroll and was based on an employee’s gross weekly wage, including notional pay, before deductions, and excluding non-taxable benefits.

A valid tax clearance was required to enter the EWSS and employers need to continue to maintain tax clearance for the duration of the scheme. A reduced rate of employer’s PRSI of 0.5% was charged on wages paid which were eligible for the subsidy payment.

Following the introduction of the EWSS on 1 September 2020, it was confirmed that seasonal and new hires were eligible for the EWSS and claims could be backdated to 1 July 2020 (subject to limited exceptions).

On 31 July 2020, the Minister for Finance, Paschal Donohoe T.D. announced that he had asked Revenue to reinstate proprietary directors to the EWSS from 1 September 2020, where they meet the objective of the scheme of retaining ordinary employees on the payroll.

On Tuesday, 20 October 2020, the Government announced changes to the EWSS subsidy rates to reflect the move to a higher level of national restrictions and better support for businesses dealing with COVID-19 Level 5 restrictions. Broadly, the EWSS rates were aligned with the rates of payment under the COVID-19 Pandemic Unemployment Payment (COVID-PUP), up to €350 per week up to 31 January 2021.

During the Committee Stage amendments to Finance Bill 2020, the Minister for Finance, Paschal Donohoe T.D., introduced a change to the eligibility criteria for employers claiming subsidy payments under EWSS from 1 January 2021. For 2021, the general eligibility criteria required that businesses experience, as a result of the COVID-19 pandemic, a 30% reduction in turnover or orders between 1 January and 30 June 2021 compared with actual reported turnover or customer orders between 1 January and 30 June 2019.

On 23 February 2021, the Government published the COVID-19 Resilience and Recovery 2021 – The Path Ahead and confirmed that the support schemes for businesses, including the EWSS, would be extended until the end of June 2021. On 1 June 2021, the Government launched the Economic Recovery Plan 2021. The Plan set out a new phase of supports for the next stage of the economic recovery after the COVID-19 pandemic. As part of the measures announced the EWSS was extended from 30 June until 31 December 2021. The enhanced payment rates were maintained for July, August, and September. The time-period for assessment was also expanded from the current 6-month period of assessment to a full 12-month period.

The Finance (Covid-19 and Miscellaneous Provisions) Act 2021, which included the amendments to the EWSS was signed by the President of Ireland, Michael D. Higgins on 19 July 2021.

The changes to the EWSS announced in June also included a new requirement for eligible employers to complete and submit an online monthly EWSS Eligibility Review Form (ERF) on ROS to continue to avail of the EWSS. The form is due for submission after each month by the 15th of the month.

Further enhancements to the EWSS were announced in Budget 2022. It was confirmed that the EWSS would remain in place in a graduated form until 30 April 2022 and there would be no changes to the rates for October and November 2021. A two-rate structure applied to subsidy payments for the months of December 2021, January 2022 and February 2022, with subsidy rates of €151.50/€203 per contribution week. A flat-rate subsidy of €100 would apply in March and April 2022. The reduced rate of Employers’ PRSI (of 0.5%) would cease on 28 February 2022 and the full rate of Employers’ PRSI would then apply for March and April.

On 21 December 2021, in light of the newly announced public health restrictions, the Minister for Finance announced a re-opening of the scheme for certain employers who would otherwise be ineligible. Businesses that were previously registered for the EWSS and received a payment in compliance with the scheme could re-qualify for the scheme where they met certain conditions.

• Businesses established on or before 30 April 2019 could re-qualify for the EWSS, if the business anticipated that their combined turnover/customer orders for December 2021 and January 2022 would be down by at least 30% compared with their combined turnover/customer orders for December 2019 and January 2020.
• Businesses established between 1 May 2019 and 31 December 2021 could re-qualify for the scheme if the business anticipated that their average monthly turnover/customer orders for December 2021 and January 2022 would be down by at least 30% compared with the average monthly turnover/customer orders for the period August 2021 to November 2021 (or on a pro-rata basis if established during this four-month period).

Employers that qualified for re-entry to the EWSS were eligible to receive support from 1 January 2022 onwards and these businesses could remain in the scheme until its expiry date of 30 April 2022.

The scheme closed to new employer entrants from 1 January 2022.

The public health regulations imposed with effect from 20 December 2021 were removed on 22 January 2022. A further extension to the EWSS was agreed by government at Cabinet meeting on 21 January 2022 for businesses that were directly impacted by the public health regulations imposed with effect from 20 December 2021.

The impacted businesses would continue to receive the enhanced rates of subsidy for the month of February and the graduated step-down in subsidy rates, as previously announced, was delayed by one month with such firms continuing to receive support under the scheme until 31 May 2022.

The revised dates and subsidy rates for impacted sectors are as follows:

• Where the employees gross weekly wage is between €151.50 and €202.99 the rate of subsidy for January and February will be €203, for March the subsidy rate will be €151.50 and for April and May the subsidy will be a flat rate of €100.
• Where the employees gross weekly wage is between €203 and €299.99 the rate of subsidy for January and February will be €250, for March the subsidy rate will be €203 and for April and May the subsidy will be a flat rate of €100.
• Where the employees gross weekly wage is between €300 and €399.99 the rate of subsidy for January and February will be €300, for March the subsidy rate will be €203 and for April and May the subsidy will be a flat rate of €100.
• Where the employees gross weekly wage is between €400 and €1,462 the rate of subsidy for January and February will be €350, for March the subsidy rate will be €203 and for April and May the subsidy will be a flat rate of €100.

The full rate of Employers’ PRSI will be reinstated with effect from 1 March 2022 for all businesses, as announced in Budget 2022 and legislated for in the Social Welfare Act 2021.