Wednesday, 3 February 2021
Emergency Measures in the Public Interest (Covid-19) Act 2020: Motion
The EWSS has been a real support for many workers and businesses throughout Covid. It is important to recognise that. I have three issues, however, that I will raise with the Minister of State, the first of which has been raised with me by a number of constituents. I have also raised this matter with the Minister for Finance, Deputy Donohoe, previously. To avail of the scheme, the turnover of businesses must be less than 70% of previous turnover. What happens if a business has a turnover drop of 20% or 25% or 27%? Those businesses do not receive any assistance. I have suggested a tapering for this entitlement. If turnover, for example, is down by 20% why not give 50% of the EWSS payment to those businesses? I am aware that it would create extra paperwork but I am not asking for a whole series of new rates. Where there is a drop of 20%, there should be at least some payment. In most businesses a drop in turnover of 20% wipes out all of their profits.
There is a perverse incentive for businesses to operate in such a way as to reduce turnover by more than 30%. This is not an issue during level 5 restrictions, but during other levels when non-essential retail is open again, this perverse incentive is there.
I ask the Minister to examine that again.
Second, under level 5 many businesses can be reasonably sure that their turnover will drop by 30% or more. However, there are some businesses, such as independently owned local retailers and so forth, that find it hard to forecast by how much their turnover will drop. I wrote to the Minister's office and the office responded by saying it is on an opt-in, opt-out basis, month by month, so businesses do not have to forecast, which would be impossible. I appreciate that. However, there is another issue. What happens if a business realises that its turnover dropped by more than 50% last month or in the previous month? I ask the Minister to put in place the same flexibility to allow business to claim retrospectively. I am not referring to last March or April, but at least for one, two or even three months whereby those businesses could claim retrospectively if there had been a sudden drop. That is not unreasonable.
The third issue has been raised by many Deputies. It is the issue of extra tax liability for recipients of EWSS. That is a very sore point for many workers. This tax is calculated on net pay, not gross pay. I raised this matter as far back as 20 May last with the Minister for Social Protection. I also raised it with the Minister for Finance, Deputy Donohoe, on 28 May. I was told it will not be an issue for most workers and for those who would have to pay extra tax, the Revenue Commissioners would be very flexible and the tax would be minimal. I was made aware of a person working in a bakery, who has worked daily since last March. That person received a tax bill for €1,200 yesterday. The person received the normal wages since March and is now faced with this tax bill. Yes, the person has four years to pay it, but the person still must pay it. As we speak, that person is accruing further tax liability, week after week. This could continue for the next six months, so the person will receive another tax bill this time next year. Even if the person is given four years to repay it, there will be double payments for three years. If the Minister cannot change what has happened up to now in regard to the taxation of workers on EWSS, he can change what is happening now to ensure they will not be paying back for the first year what they owed for 2020 and then paying double payments for three years.