The Employment Wage Subsidy Scheme (EWSS) was introduced by the Irish Government in July 2020 to help businesses, that have been impacted by COVID-19 restrictions and public health measures, remain viable. This article provides an overview of the EWSS and its implications for employers, employees and self-employed individuals.
The purpose of this scheme is to subsidise wages paid directly to employees with a view to helping those businesses that are suffering due to reduced customer demand or closure as a result of Covid-19 restrictions. The scheme applies both nationally and locally throughout Ireland. Employers can receive up to €203 per week per employee with eligible employees receiving up to €151. Employees may also be entitled to additional income supports from other schemes such as Jobseeker’s Payment or Pandemic Unemployment Payment depending on their circumstances.
The EWSS has enabled employers affected by COVID-19-related restrictions or closures to retain existing staff members while ensuring that remuneration does not suffer too drastically during these unprecedented times. Analysing the design, operation and effectiveness of the scheme will allow us greater insight into how it has supported businesses through difficult economic conditions caused by the pandemic.
Government Support For Employers
The Irish Government has recently implemented a wide-reaching financial support package, the Employment Wage Subsidy Scheme (EWSS), to help employers and employees cope with the economic fallout from the global pandemic. This comprehensive scheme is designed to provide immediate relief for businesses that have been adversely affected by Covid-19 related restrictions, allowing them to maintain their current workforce levels or increase new hires. As such, it offers an invaluable lifeline for many organisations in Ireland during this challenging period.
The EWSS provides direct subsidies on wages paid to qualifying employees working at least 33% of normal hours. It replaces both the Temporary Wage Subsidy Scheme (TWSS) and Employer Refund Scheme which were introduced earlier in 2020 as part of the government’s response to Covid-19. The purpose of this article is to provide an overview of how the scheme works, who is eligible and what actions are required when claiming assistance under the scheme.
In order for businesses to be able to access payments under the EWSS they must meet several criteria including being registered with Revenue Commissioners and filing returns up-to-date; having valid tax clearance certificates; providing evidence that turnover has decreased due to Covid-19 restrictions; ensuring employees are not receiving other wage subsidy supports; and adhering strictly to certain terms and conditions set out by Revenue Commissioners. These eligibility requirements will be discussed further below in more detail.
Eligibility Criteria
In order to receive payments under the EWSS, employers must meet a range of eligibility criteria. Firstly, they must be registered with Revenue Commissioners and filing returns up-to-date as well as having valid tax clearance certificates in place. Secondly, businesses will need to provide evidence that their turnover has decreased due to Covid-19-related restrictions; this could include providing details such as accountancy records or financial statements. Thirdly, employees claiming assistance through the scheme cannot already be receiving other wage subsidy supports from the government; if so then these must be fully repaid before payment can be made via the EWSS. Finally, organisations are required to adhere strictly to certain terms and conditions set out by Revenue Commissioners regarding how funds received may be used.
The Irish Government’s Department of Employment Affairs & Social Protection (DEASP) is responsible for assessing applications against these criteria and making decisions on whether payment should be made or not. Once approved, employers can begin claiming under the scheme using an online form which requires detailed information about their organisation including employee numbers, payroll amounts and dates of commencement/cessation for each employee involved.
As part of the process, there are also requirements for employers to notify DEASP when employees leave their employment during this period and inform them of any changes in circumstances which may affect their entitlement to claim under the scheme. It is important that businesses ensure they remain compliant with all regulations associated with claiming subsidies under the EWSS in order to maximise benefits while minimising costs incurred through non-compliance penalties or missed opportunities where eligible persons have been left off claims forms or otherwise excluded from accessing support available.
Level Of Subsidy
Having established the eligibility criteria for claiming subsidies under the EWSS scheme, it is also important to consider how much employers may receive in terms of financial assistance. As a general guide, payments are calculated by taking into account an employee’s average weekly wage from 6th April 2020 to 25th October 2020 and then applying a percentage rate to this figure based on their income level. Those earning up to €151.50 per week will be eligible for a 70% subsidy; those earning between €151.51-€202 per week will get 60%; and those with wages above €202 can claim 55%. It should be noted that these percentages are subject to change at any time as part of government policy updates.
The amount which businesses can receive each month through the scheme is capped in order to ensure fairness across different types and sizes of organisations while making sure that the funds provided are sustainable in the long term. To calculate exact amounts, employers must divide total monthly payroll costs before tax by 4 and multiply this by the relevant percentage rate applicable to each individual employee covered under the scheme; they can then submit claims via DEASP’s online portal on a fortnightly basis seeking reimbursement for 75% of those sums paid out (up to maximum limits set).
As such, when used correctly, the EWSS provides significant support for organisations struggling financially due to Covid-19 restrictions whilst ensuring that employees retain incomes during difficult times and do not face undue hardship or insecurity caused by job losses.
Duration Of Subsidy
Having laid out the level of subsidy and how it is calculated, it is now important to consider the duration for which businesses can access support. The scheme will remain in place until 31st March 2021; however, there are certain criteria that must be met in order to ensure ongoing eligibility:
1) Businesses have already registered with DEASP for EWSS payments before 1st October 2020;
2) Employers continue to meet all other terms and conditions associated with the scheme as set out by Revenue Ireland;
3) Employees continue to work an average of at least 40 hours per month throughout this period; and
4) All wages paid are subject to PAYE payroll deductions.
Given these requirements, employers should aim to maintain full records of financial transactions related to their staff during this time frame so they can easily demonstrate compliance when asked. Any discrepancies or irregularities identified may lead to delays in receiving subsidies or even potential rejections of claims depending on severity.
Record-Keeping Requirements
In order to remain eligible for the Employment Wage Subsidy Scheme (EWSS) employers must ensure that accurate and reliable records are kept. These should include all financial transactions related to staff wages and other associated costs, such as PAYE payments, over the duration of the scheme. This is necessary in order to be able to demonstrate compliance with Revenue Ireland’s criteria when requested.
It is advisable for businesses to keep a detailed record of their EWSS claim history, including the date submitted, the rate paid and any correspondence received from Revenue Ireland. Any claims rejected by Revenue Ireland can also be tracked on this system to help identify issues which may have caused the rejection. Additionally, it is important that employees’ hours worked per month are recorded accurately in order to maintain eligibility for the scheme going forward.
By keeping up-to-date records of payroll information, businesses will not only stay compliant with Revenue Ireland but will also enhance their efficiency and reduce administrative burden each time they submit an EWSS claim. Moving forward, maintaining these systems allows businesses access to timely support while simultaneously ensuring continued eligibility until March 2021. With appropriate record-keeping measures in place, employers can then move on to understanding how best to apply for subsidy payments under this scheme.
How To Apply
The Employment Wage Subsidy Scheme (EWSS) is designed to provide employers with financial assistance during the Covid-19 pandemic. In order to access this support, businesses must first understand how to apply for subsidy payments under this scheme. This process can be broken down into three simple steps:
- Step 1: Determine Eligibility o Check Revenue Ireland’s eligibility criteria and ensure that all required information is submitted in a timely manner. \to Obtain approval from Revenue Ireland before making any claims or payments.
- Step 2: Submit Claim Form o Complete and submit an online claim form via ROS along with supporting documentation such as payslips and bank details of staff members receiving payment. \to Keep records of submission date and the amount claimed for future reference.
- Step 3: Receive Payment o Payments will normally be received within five working days if all necessary documents are verified by Revenue Ireland. \to Ensure that employees receive their appropriate wages on time each month while remaining compliant with EWSS rules throughout the duration of the scheme until March 2021.
By following these three steps correctly, employers should have no difficulty accessing the financial aid available through the EWSS program. Furthermore, understanding these processes will help businesses remain eligible for the scheme going forward whilst also ensuring they meet their record-keeping requirements outlined earlier in this article. The next section will discuss some key tax implications associated with claiming subsidies under this scheme.
Tax Implications
When claiming subsidies under the Employment Wage Subsidy Scheme (EWSS), employers must be aware of any associated tax implications. Depending on the size and structure of a business, these could include:
- Corporation Tax – Any subsidy payments received are not subject to corporation tax in Ireland but will form part of taxable profits for accounting purposes. This means that businesses should ensure their accounts reflect any subsidies received when it comes to filing annual returns with Revenue Ireland.
- PAYE/PRSI Contributions – When making payments to employees under EWSS, employers must ensure that all due contributions are made to Revenue Ireland according to the relevant legislation. Failure to do so can result in penalties or other sanctions being imposed by the authorities. It is therefore important for businesses to check their records regularly and adjust payroll accordingly where necessary.
- Employee Benefits – Employers may also have additional obligations such as providing certain benefits or compensations if required by law or employment contracts which need to be considered when offering support through this scheme. A thorough understanding of employee entitlements is essential for businesses wishing to remain compliant with applicable regulations whilst accessing financial relief from EWSS payments.
Employee Benefits
The importance of employee benefits when claiming subsidies under the Employment Wage Subsidy Scheme (EWSS) cannot be overstated. A recent report estimated that up to 66% of businesses in Ireland are not compliant with relevant employment regulations regarding providing sufficient benefits to staff. This highlights how crucial it is for employers to ensure they are adequately meeting their obligations towards employees, even when accessing government support through EWSS.
Under Irish law, certain minimum rights and entitlements must be provided by an employer depending on the nature of the job or contract. Common types include holiday pay, sick leave, pensions and other forms of remuneration such as bonuses or shares in profits. It is important for businesses to understand what these entitlements are so they can comply with legal requirements whilst still receiving assistance from EWSS payments. Neglecting any applicable rules could lead to costly penalties down the line if investigated by Revenue Ireland or other regulatory bodies.
When considering offering support via this scheme then, companies should also remember that they have a duty of care towards their staff which extends beyond simply paying salaries. By ensuring all due contributions are made according to applicable legislation, businesses can remain compliant while taking advantage of financial relief offered by the government during difficult economic times.
Employer Obligations
The Employment Wage Subsidy Scheme (EWSS) does not absolve employers of their legal obligations to employees. Businesses must still meet all statutory requirements in order to access the financial support offered through this scheme, including providing appropriate benefits such as paid holiday and sick leave. Furthermore, organisations should also ensure that they are compliant with other relevant regulations concerning employee welfare in areas such as health and safety.
Employers who fail to adhere to applicable laws can face prosecution leading to hefty fines or even imprisonment depending on the severity of any breach. As well as being held accountable under criminal law, companies may find themselves in violation of contracts entered into between them and Revenue Ireland related to the terms of accessing EWSS payments. In these cases, businesses could be required to repay funds received from the scheme if found guilty of malpractice or negligence.
For those looking for guidance when claiming subsidies through EWSS then it is important to seek professional advice where necessary regarding employment rights and entitlements. Doing so will help businesses remain within their legal remit whilst taking advantage of government aid during times of economic difficulty.
Future Outlook
The Employment Wage Subsidy Scheme has been a crucial lifeline for many businesses during the pandemic and it is likely to remain so in the coming months. It will no doubt be an important factor in helping companies survive economic hardship as the long-term effects of COVID-19 continue to be felt.
Symbolically, EWSS could represent the hope that there may still be light at the end of the tunnel. With further support from government initiatives such as this, businesses may find themselves better equipped to weather any future storms they are faced with. As economies begin to open up again and restrictions ease, employers should consider how best to make use of EWSS payments going forward if applicable.
Through careful planning and consideration, organisations can plan ahead now to ensure their workforce remains secure throughout these challenging times regardless of any potential changes or disruptions that could occur in the near future. With proper preparation and foresight, businesses can take control of their own destinies despite external pressures.
Frequently Asked Questions
What Is The Maximum Amount Of Subsidy Available Under The Ewss?
H2: What is the maximum amount of subsidy available under the EWSS?
The Employment Wage Subsidy Scheme (EWSS) provides financial support to employers to help them keep their staff employed during times of economic hardship. The scheme offers a subsidised payment, up to €203 per week and for up to 39 weeks in total, for eligible employees with an annual salary between €20,004 and €50,000.
In order to qualify for the full benefit rate under the scheme, employers must pay at least 85% of an employee’s normal wages or salary. This means that if a person earns more than €203 per week they will still receive the same amount as long as it does not exceed 85% of their usual income. In addition, employers are only able to claim one subsidy per employee. As such, this caps the maximum value of subsidies accessible by any individual employer at just over €7,995 – making it one of the most generous coronavirus-related aid packages currently available in Ireland.
This scheme has been widely praised since its introduction as providing vital assistance at a time when many businesses were facing considerable uncertainty due to restrictions imposed on them as part of public health efforts aimed at combating COVID-19. Benefits include: • Financial assistance to help retain existing jobs; • Direct payments made directly into employers’ bank accounts; • Payments received quickly following application; • Flexible eligibility criteria designed to fit specific business needs.
By providing much-needed cash flow at no cost upfront and allowing businesses greater flexibility when deciding who should receive wage subsidies, the EWSS has been instrumental in helping numerous companies survive challenging economic circumstances caused by pandemic lockdowns and social distancing requirements across Europe and beyond.
Are Employers Who Have Received Other Forms Of Covid-19 Related Support Eligible For The EWSS?
The eligibility of employers who have received other forms of COVID-19-related support for the Employment Wage Subsidy Scheme (EWSS) is an important consideration. This scheme provides a subsidy to eligible employers with reduced turnover, in order to help them retain employees and maintain their business operations during the pandemic. The level of subsidy available depends on the employer’s circumstances.
In order to be eligible for the EWSS, employers must meet certain criteria including having experienced at least a 25% reduction in turnover compared to last year. Employers may also receive other forms of financial assistance such as grants or loans from public funds, but they are still eligible under the EWSS scheme if they satisfy all other criteria. Additionally, businesses that have already had their employees furloughed through another government scheme can also qualify for the EWSS provided they meet all necessary requirements.
It is therefore possible for employers to receive both other types of funding and the EWSS without any issue. However, it should be noted that payments made through these schemes may need to be reported separately when claiming back money paid out by HMRC in respect of wage subsidies via this scheme.
TIP: It is advisable for employers to seek professional advice before applying for multiple sources of COVID-19-related funding in order to ensure compliance with relevant regulations and avoid potential issues further down the line.
Are There Any Restrictions On Who Can Be Hired Under The Ewss?
The current H2 question concerning the Employment Wage Subsidy Scheme (EWSS) is whether there are any restrictions on who can be hired under the scheme. When employing a new worker, employers must adhere to certain criteria in order for them to qualify for the EWSS.
Firstly, employees must have been employed since July 1st 2020 by the employer claiming the subsidy and they must also remain continuously employed until at least June 30th 2021. The employee’s normal rate of pay prior to this period cannot exceed €151 per day or €38,000 annually. In addition, their role within the business must not be affected negatively as defined by Revenue Ireland’s definition of ‘No Disadvantage Test’ which states that no existing staff should suffer a decrease in working hours or pay because of an increase in workforce due to access to EWSS funds.
Secondly, it is important that employees meet residency and tax requirements for eligibility; these include having a valid Personal Public Service Number (PPSN), being resident in either Ireland or Northern Ireland and paying Irish Income Tax/Universal Social Charge (USC). Moreover, individuals who are already receiving social welfare payments are not eligible although those previously on such schemes may become eligible if they leave those programmes before taking up employment with an EWSS participant company. Other exclusions from eligibility include apprenticeships and internships unless otherwise deemed suitable by Revenue Ireland regulations.
Finally, employers need to ensure that employees comply with all necessary legal obligations relating to lawful engagement and immigration status when hiring people under this programme; failure to do so could result in fines issued by authorities as well as non-payment of subsidies claimed against ineligible workers. To conclude, there are various restrictions placed upon employers looking to hire workers through the Employment Wage Subsidy Scheme: * Employees must have been continuously employed since July 1st 2020 * Normal rate of pay cannot exceed €151 per day or €38,000 annually * Residency & tax requirements including PPSN & USC payment * Exclusions from eligibility – e.g., apprenticeships & internships * Legal compliance with regards to immigration status
Is There A Minimum Amount Of Time An Employee Has To Work To Be Eligible For The Subsidy?
The eligibility requirements for the Employment Wage Subsidy Scheme (EWSS) are of particular importance in understanding its structure. Like a puzzle, each piece is needed to complete the picture and gain clarity on how it works. One such piece is determining if an employee has to work a minimum amount of time in order to be eligible for the subsidy.
To shed some light on this matter, one must discern what exactly constitutes ‘work’ under the scheme. Generally speaking, an employee needs to have spent at least twenty hours performing eligible duties within any four week period over their contract term in order to qualify for EWSS subsidies. This means that seasonal employees or casual workers who may not meet this threshold could still receive wages from employers with these expenses being reimbursed by the government through the scheme. It should also be noted that part-time employees can only claim back those expenses incurred while working; no additional payments are made outside of contracted hours worked during that month.
Given this information about contractual obligations, it is evident that there must be a certain level of participation required by employees when considering them for subsidised wages through the EWSS program. Employers need assurance that staff members are meeting expectations so they can confidently rely on the financial benefits provided by this initiative as well as utilise their resources wisely. Much like putting together pieces of a jigsaw puzzle, gaining insight into all aspects of the scheme ensures everyone involved understands their roles and responsibilities leading to successful outcomes overall.
What Are The Consequences For Employers Who Fail To Comply With The Ewss Requirements?
Employers must be aware of the consequences for failing to comply with the Employment Wage Subsidy Scheme (EWSS) requirements. Under Irish law, employers who fail to meet certain conditions laid out by Revenue may face significant financial penalties or other sanctions.
Any employer that fails to apply the terms and conditions of the EWSS correctly will be liable for any payments made in error from the State’s funds. This means that if an employer is found to have been receiving subsidy payments for ineligible employees, they would need to repay those amounts plus interest charges. In addition, employers whose activities are deemed fraudulent could also face criminal prosecution and potentially a prison sentence.
The Department of Social Protection has put measures in place to monitor compliance and ensure that no fraud occurs while providing support through this scheme. Employers should therefore ensure that all their staff members eligible under the criteria set by Revenue are registered on the payroll systems before submitting claims for subsidies under the EWSS scheme. Failing to adhere to these regulations can result in serious legal action being taken against them.
Conclusion
The Employment Wage Subsidy Scheme (EWSS) is an innovative initiative that offers employers the opportunity to reduce their wage bills in order to remain competitive and protect jobs. The scheme provides a maximum subsidy of €203 per week, or up to 70% of gross wages, whichever is lower. Furthermore, those businesses that have already received government support can apply for additional help through the EWSS. However, there are certain restrictions on who may be hired under the scheme and employees must work at least three days per week to qualify for the subsidy. Non-compliance with these terms carries serious consequences for employers; fines of up to 10 times the value of any fraudulent benefit claims could be incurred.
Overall it is clear that the EWSS has provided much-needed financial assistance during this difficult period. It has allowed many companies to continue functioning while protecting employment levels throughout Ireland. As such, careful consideration should be given by employers when applying for this generous program as failure to adhere strictly to its guidelines could result in significant penalties being imposed upon them. In conclusion, the EWSS stands out as an exemplary example of how effective intervention policies can aid struggling economies during challenging times like these.