Wednesday, 3 February 2021
Emergency Measures in the Public Interest (Covid-19) Act 2020: Motion
That Dáil Éireann approves the following Regulations in draft: Emergency Measures in the Public Interest (Covid-19) Act 2020 (Covid-19: employment wage subsidy scheme) (Date Adjustment) Order 2021, a copy of which was laid in draft form before Dáil Éireann on 22nd January, 2021.
Following a debate last week on the Covid restrictions support scheme, the resolution for debate today seeks the approval of the House for another order which also recognises the challenges faced by businesses across the economy arising from level 5 public health restrictions and provides for additional support to be given under the employment wage subsidy scheme, EWSS.
The latest change to the scheme is in the context of unprecedented levels of support that are being provided by the Government to assist businesses and workers in Ireland throughout this pandemic. To date, additional expenditure of well over €13 billion has been paid out, with more still planned in 2021 to support businesses and to help citizens to manage financially in the midst of these very, very difficult times. Sums of more than €1 billion have been approved for more than 50,000 business under a range of measures that the Tánaiste, Deputy Varadkar, has put in place. Supports are also available to assist businesses in moving online. The Revenue Commissioners have also assisted businesses through a debt warehousing programme, with 70,000 businesses putting tax liabilities of almost €2 billion into these schemes. As of 28 January 2021, 58,300 claims for payments of €244.2 million in respect of 20,100 premises have been made under the CRSS. Nearly €6 billion has been spent on the pandemic unemployment payment, PUP.
In addition to these measures, the wage subsidy schemes have been the central pillar of our response to this disease. The temporary wage subsidy scheme, TWSS, was in place from March until the end of August. Some 66,500 employers received payments of almost €2.9 billion in respect of more than 664,000 employees. To date, more than 44,800 employers and 505,600 employees have been supported by the EWSS, with subsidies of more than €1.7 billion being paid out and PRSI credit of €303 million being granted by 28 January. This is an economy-wide support scheme.
The primary employer qualification is based on the employer's turnover in the current six-month period being less, compared with the pre-pandemic position period in 2019. The legislation provides that the employer must be able to demonstrate that it is operating at no more than 70% in either the turnover of business or the customer orders received by the employer by reference to the period from 1 January to 30 June 2021 compared with the equivalent period in 2019. This is a flexible scheme that has been quickly administered by Revenue. Where practical, payments are being made within two working days after payroll. I wish to take this opportunity to thank and recognise the Revenue Commissioners for their extraordinary work. The level of subsidy given to the employer is based on the number of paid workers on payroll per week and a flat, per-head value rate is applied based on prospective pay levels so that claims may also be made for new hires or seasonal workers.
Following the reintroduction of level 5 restrictions in October 2020, the Government decided that from 20 October the subsidy would be up to €350. Weekly rates of subsidy are made available to the employer on the basis of the income of the employee. The subsidy payable is nil for employees paid less than €151.50 per week or more than €1,462 per week. As set out in the Finance Act 2020, the enhanced rates were to be in place until 31 January 2021, after which they were due to return to the original rate of €151.50 for those paid more than €151.50 per week and €203 for those paid more than €203 per week. However, given all that has happened with public health, it was decided that the current EWSS rates will be maintained until 31 March. This is aligned with the structure of the PUP. This is considered essential because in the absence of such an alignment, there would be a risk of migration of employees from the EWSS to the PUP during the current level 5 restrictions, thus undermining the very purpose of this scheme. To the maximum extent possible, the objective is to maintain a position whereby as many employees as possible who are currently on the EWSS retain their link with the employer rather than migrating to the PUP and losing their connection with the employer. Recent trends on this scheme indicate that it also plays an important role in getting people back to work as public health measures are eased, thereby reducing the number who depend on the PUP.
Section 28B of the Emergency Measures in the Public Interest (Covid-19) Act 2020 provides that as Minister for Finance, I may vary certain aspects of the scheme by ministerial order. The aspects of the scheme that may be amended in this way relate to the end date of the measure, which may be extended to a date no later than 30 June 2021, the rate of subsidy that may apply and the applicable employee income thresholds to which such rates will apply, as well as the criteria of the turnover test that determines the qualifying employers. The exercise of this power is subject to specified conditions and the legislation sets out several steps to be taken before an order varying the scheme can validly be made. As Minister for Finance, I have a duty to monitor the scheme and make regular assessments of whether it is necessary to adjust certain elements of the scheme to fulfil the objectives of providing the necessary stimulus to the economy, mitigating the effects of this awful disease on the economy and facilitating the furtherance of any of the purposes specified in section 28A(3) of the Act, which includes sufficient use of Exchequer resources and the protection of the public finances.
Following the completion of such an assessment, if the view is formed, having consulted with my colleagues, the Ministers for Social Protection and Public Expenditure and Reform, as Minister for Finance I am empowered to amend such elements by way of secondary legislation. Such an order shall not be made unless a draft is laid before Dáil Éireann and a resolution approving the draft is passed by the House. I can, therefore, confirm that I intend to exercise the powers conferred by section 28B of the Emergency Measures in the Public Interest (Covid-19) Act 2020 and the necessary steps have been taken to comply with the legislation. First, regular assessments have been carried out, noting the utilisation of the EWSS, the continuing challenges facing the economy from the pandemic and, indeed, Exchequer cost. Second, I have formally consulted my colleagues, the Minister for Social Protection, Deputy Humphreys, and the Minister for Public Expenditure and Reform, Deputy Michael McGrath, and have determined that it is necessary that the current rates remain in place until 31 March.
The estimated cost of the extension of the enhanced rates is €38 million per week, to be met from the voted expenditure of the Department of Social Protection, noting that this additional cost is considered a subset of the overall cost estimate of the latest public health restrictions. The draft regulations, entitled the Emergency Measures in the Public Interest (Covid-19) Act 2020 (Covid-19: employment wage subsidy scheme) (Date Adjustment) Order 2021, were laid in draft form before Dáil Éireann on 22 January. The resolution before the House approves this order. I commend it to the House.
I will conclude by noting that the operation of the EWSS and its effectiveness continues to be kept under the closest of reviews. While there are no plans to revisit the core eligibility criteria for the EWSS at this time, the Government's position is that there will be no cliff edge to the EWSS. In that regard, it is noted that the legislation implementing the measures provides that it will be in place until 31 March 2021, but also provides that the scheme may be extended until the end of June if required, subject to the same procedural conditions I have set out. It is likely that some form of continued support will be necessary to the end of 2021 to help to maintain viable businesses and employment and to provide businesses with certainty to the maximum extent possible.
Decisions on the form and level of this support will take account of emerging circumstances and economic and health conditions as they become clearer. In the interim, I commend this resolution to the House.