With the Temporary Wage Subsidy Scheme (TWSS) ending on 31st August 2020, the government have introduced a new Employment Wage Subsidy Scheme (EWSS). The EWSS will replace the TWSS from 1st September 2020 and is expected to continue until April 2021.
Under the EWSS scheme, employers and new firms in sectors impacted by COVID-19 whose turnover has fallen 30% will get a flat-rate subsidy per week based on the number of qualifying employees on the payroll, including seasonal staff and new employees.
Rules for EWSS
- To qualify for the scheme, you must self-declare to Revenue that you have experienced significant negative economic disruption due to COVID-19, with a minimum of 30% decline in turnover or customer orders (between July to December 2020 compared with the same period in 2019). For new businesses, this is based on a projected forward test.
- Eligible employers will be required to register for the EWSS via ROS, registration should be available mid-August.
- Employers must hold up to date tax clearance to register for the scheme and receive the subsidy payments.
- If you are a registered childcare provider, you do not need to meet the 30% reduction in turnover or customer orders test.
- Employers must review their eligibility status on the last day of every month to ensure they continue to meet the eligibility criteria, if they no longer qualify they should deregister for EWSS with effect from the following day (1st of the month).
- If you have a new employee (new hire or a seasonal worker), they can start the EWSS from 1 July 2020.
- If an employee is already on the TWSS, they must stay on it until 31 August 2020. The TWSS ends on 31 August 2020 and no new applications for the TWSS can be accepted from that date.
- The two schemes will run in parallel from 1 July until the TWSS closes at the end of August.
The subsidy amount paid to employers will depend on the gross income of each employee.
EWSS will give a flat-rate subsidy to qualifying employers, based on the number of qualifying employees on the payroll.
For every employee paid between €203 and €1,462 gross per week, the subsidy is €203.
For every employee paid between €151.50 and €202.99 gross per week, the subsidy is €151.50.
No subsidy is paid for employees paid less than €151.50 or more than €1,462 gross per week.
Proprietary directors are being reinstated to the EWSS from 1 September, where they keep ‘ordinary’ employees on the payroll.
If an employment is eligible for the subsidy, a 0.5% rate of employer’s PRSI will apply.
- Revenue will calculate the subsidy payable based on the gross pay –includes notional pay and is before any deduction the pay frequency & the insurable weeks
- Under the EWSS, employers will be required to pay employees in the normal manner i.e. calculating and deducting Income Tax, USC and employee PRSI through the payroll.
- EWSS subsidies are paid to the employer –it will not show on a payslip / myAccount
- Paid to the employer monthly after the return due date (14th)
- Employers will be required to pay employees in the normal manner
- PRSI will be calculated as normal via payroll e.g. on PRSI class A1.
- Revenue will calculate a PRSI credit by calculating the difference between the rate on the normal class and the 0.5%.
- The credit will show on the Statement of Account to reduce the employer’s liability to Revenue.
EWSS – 1st July 2020
TWSS and EWSS will run in parallel from 1st July to 31st August, employees already on TWSS must remain on TWSS until the end of August. Employers wishing to operate the scheme from July 1st i.e. for employees not eligible for TWSS, should process the payroll for these employees in the normal manner and Revenue will review these cases at a later date and refund the subsidy due.
Revenue plan to cater for this via myEnquiries, this will require employers will provide Revenue with the employee details etc. Payment should be made to employers in September.
How to apply
Employers will need to register online with Revenue.