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 Employment Wage Subsidy Scheme (EWSS) from 1 January 2021.

As outlined by Minister Donohoe during the Committee Stage debates; “For EWSS claims from 1 January 2021, the benchmark period for the turnover test will be rolled forward to quarters 1 and 2 of 2021 compared with the same period in 2019. This will update the benchmark period for the new year for all recipient firms and ensure new firms may enter the scheme from January 2021, should the need arise.”

Finance Bill 2020, as passed by Dáil Éireann, reflects the Minister’s amendment – Section 63(3)(d) Amendment of Part 7 of Emergency Measures in the Public Interest (Covid-19) Act 2020.

New eligibility criteria to claim EWSS from 1 January 2021

An employer’s eligibility to make an EWSS claim from 1 January 2021 will be based on demonstrating, to Revenue’s satisfaction and in accordance with its guidance, that due to COVID-19, at least a 30% reduction in their business turnover or in customer orders received will occur in the period from 1 January 2021 to 30 June 2021 by reference to the period from 1 January 2019 to 30 June 2019 (if the business was in existence prior to 1 July 2019).

Where the business did not exist for the first six months of 2019, the benchmarked periods to determine eligibility depend on when the business operations began:

• On or before 1 May 2019
  

  The 30% decline in turnover or customer orders, due to COVID-19, must be determined in 2021 by reference to the same period in 2019 in which the business was operating.

  For example, if the business started on 1 March 2019, then the business must be able to show that there has been a 30% decline in the period from 1 March 2021 to 30 June 2021 when compared to 1 March 2019 to 30 June 2019, due to COVID-19.

• After 1 May 2019
  

  The employer must be able to show that the turnover or customer orders during the period 1 January 2021 to 30 June 2021 will be at least 30% less than what it would have been, had there been no disruption caused by COVID-19.

Employers currently availing of EWSS that intend to submit EWSS claims from 1 January 2021, will need to review their eligibility for the scheme at the end of December by reference to the new eligibility criteria for 2021, as outlined above.

Employers claiming EWSS are required to review their eligibility on a rolling basis on the last day of every month, to compare their actual turnover to the projected turnover over the period in question. This will determine whether they continue to meet the eligibility criteria. If they do not, employers are required to deregister for the scheme on the first day of the following month.

Exceptions to this requirement

It continues to be the case that employers, who are childcare businesses, registered in accordance with Section 58C of the Child Care Act 1991 , are not required to meet the reduction in turnover or customer orders “test”. However, they must meet the other conditions of the scheme, as set out in Revenue Guidelines.

Further Information

Finance Bill 2020 is expected to be signed into law by the end of the year. Revenue is also updating its guidelines on the operation of EWSS to reflect the new eligibility criteria and other EWSS measures in the Bill. The updated Guidelines are expected to be available in the coming days.

The EWSS is due to expire on 31 March 2021 or such later date as provided for by the Minister for Finance. The Minister also has the power to amend the percentage reduction in turnover or customer orders to qualify for EWSS and other elements of the scheme by ministerial order.

We will include information on any important updates on EWSS in 2021 on our Wage Subsidy Schemes webpage in our COVID-19 Hub as they are announced.