The Employment Wage Subsidy Scheme (EWSS) ended on 31st May 2022. The scheme replaced the Temporary Wage Subsidy Scheme (TWSS), which had been in place since 1st September 2020. The EWSS ended on 30th April for businesses that weren’t directly impacted by COVID-19. Still, businesses that faced financial losses due to the public health restrictions introduced in December 2021 had an extension of a month.
The EWSS scheme provided a weekly flat-rate subsidy to businesses impacted by the pandemic. Your business turnover had to drop by 30%, and specific requirements had to be met to qualify for the scheme. For instance, you had to have qualifying employees on the payroll, and the wages determined the subsidy you received.
How the Scheme Started
The EWSS was a provision made in Section 28B of the Emergency Measures in the Public Interests Act 2020 to combat the economic impact of COVID-19 on local businesses. The scheme was economy-wide enterprise support based on business eligibility for the subsidy and eligible employees in the business. Providing the qualifying employers with a flat-rate subsidy based on employees’ number and gross pay reduced the chances of furlough and letting go of employees due to low revenues. For instance, the scheme was available for employers who kept staff on their payroll during the scheme period between 1st September 2020 and 30th April 2022. You were eligible for the scheme whether the employees worked temporarily or on reduced hours and pay. Nearly €10.7 billing was paid through the employment schemes, with the previous TWSS paying close to €2.8 billion and supporting 67,000 employers and 690,000 employees. The latter has spent close to €7.9 billion to support 51,900 employers and 744,000 employees.
In January 2022, the government made some changes that affected the COVID-19 support schemes like the EWSS. The changes came after new restrictions were introduced on COVID-19 in December 2021. Some of the changes include a one-month deferral on the end date of the EWSS scheme for businesses severely affected by public health restrictions. Aside from the extension of the 30th April deadline, other changes to businesses directly impacted by the COVID-19 restrictions included the following:
• The scheme would continue to provide enhanced subsidy rates for February, and the step-down in subsidy rates would be delayed by a month.
• A new two-rate structure of €151.50 and €203 was introduced and applied from December 2021 to February 2022. However, employers received a flat-rate subsidy of €100 for every qualifying employee in the final phase between March and May.
• The government reinstated a reduced rate of employers’ PRSI of 0.5% between December 2021 and February 2022, and the full rate kicked off in March 2022.
For businesses not directly impacted by the December 2021 changes to public health measures, changes to the EWSS included:
• The two-rate structure for subsidies was applied in February before a flat rate of €100 came into effect in March and April.
• The EWSS ended on 30th April, and the full employer’s PRSI was reinstated from 1st March 2022.
• Employers still received the enhanced support rates under the five payment bands, and the system continued to December 2021 and January 2022.
Who could use the EWSS Scheme
Qualifying for the Scheme
To benefit from the scheme, a valid tax clearance and meet the reduction in turnover requirements was needed.
You could not participate in the scheme without a tax clearance from Revenue, and you needed to maintain your tax clearance status throughout the scheme. Tax clearance status could be checked online through the Revenue Online Service (ROS). You could apply for one through the eTax platform if you didn’t have a clearance certificate. The July Stimulus package provided measures for deferral of unpaid VAT and Employers’ PAYE debt that accumulated due to COVID-19. That means you could still benefit from the scheme for PAYE debt associated with the pandemic. Alternatively, you could take advantage of the COVID-19 initiatives related to tax debts and get a clearance certificate after receiving the waivers.
Reduction in customer orders or turnover test
To qualify for the scheme, you had to show the negative economic disruption to your business caused by COVID-19. For instance, the employers needed to prove that they have a minimum decline of 30% in customer orders or turnover over 12 months to receive the subsidy. The turnover review involves an in-depth inspection of the turnover for the entire period instead of individual months. If your business was new, the projected forward test determined the turnover for the 12 months.
When you have a not-for-profit organisation and applied for the EWSS scheme, the funding you received from the Government’s Charity Stability was excluded from the definition of turnover used to evaluate eligibility for the scheme. Childcare businesses registered under Section 58C of the Child Care Act 1991 are eligible for the scheme. Qualifying childcare businesses didn’t need to meet the turnover test to get the EWSS, but they needed a tax clearance certificate.
Re-Qualification for the EWSS Scheme
When the government extended the EWSS scheme in December 2021, employers who didn’t qualify before could re-enter the scheme in January. The eligibility criteria for re-entering the scheme were a 30% decline in turnover. However, you could join the scheme if you anticipated that the business would suffer a decrease in turnover or customer order values due to new public health restrictions. During the evaluation, the sales data from December 2019 and January 2020 would be used to evaluate the accuracy of your projections.
Apart from the eligibility criteria, you also undertook a monthly review to determine your eligibility. If you no longer met the requirements for the scheme, you had to withdraw.
Eligibility Criteria for Employees
The scheme aimed at keeping employees on the payroll despite the low sales. Hence, you had to have employees on your payroll throughout the scheme. There were no restrictions on the hiring process. That means employers could recruit new workers or move employees. However, the reasons for hiring or transferring workers had to be for legitimate business reasons and not to maximise claims in the subsidy. You could also restructure the work hours depending on the performance of the business. For instance, your employees could be working on reduced hours and pay or move to temporary work instead of full-time schedules due to the reduced business requirements.
Employees receiving EWSS payments could also benefit from short-time work support if they worked less than three days a week. An employer had to pay between €151.50 and €1,462 per week to qualify for the scheme.
Some employees like the proprietary directors were not eligible for the EWSS scheme unless the director was on another employer’s payroll and had been working for them for at least one year. If a proprietary director worked for two eligible companies, a claim for EWSS for the employees could only be submitted by one company.
Compliance Checks and Anti-Abuse Measures
Applying for the EWSS did not require any proof and the eligibility relied on self-assessment principles. You did not have to provide any document during the registration stage, but the Revenue reviewed the eligibility during compliance checks and monthly reviews. The monthly eligibility review was filed online, and you had to keep accurate accounting records to support your eligibility. During compliance checks, Revenue contracted employees to get information relating to the EWSS operations. Sometimes, you had to prove that you met the eligibility criteria, especially reducing turnovers and customer orders. Businesses could be penalised for inappropriate accounting and false representations to qualify for the scheme.
The scheme’s success is evident in the employment supported throughout the scheme and the quick recovery of the economy despite the public health restrictions.