Wednesday, 15 December 2021
Finance Bill 2021: From the Seanad
The wage subsidy schemes, namely, the employment wage subsidy scheme, EWSS, and its predecessor, the temporary wage subsidy scheme, TWSS, have been a substantial and key part of the Government response to the pandemic. The EWSS has played a central role in supporting businesses, encouraging employment and helping to maintain the link between employers and employees. Since the introduction of the scheme, it has reflected an economy-wide policy that operates across all sectors. It is widely acknowledged as a very successful policy intervention that has provided vital support to businesses across the country during a very challenging time.
The overall support provided for the EWSS to date, that is, up to 9 December, amounts to more than €6.6 billion, comprising direct subsidy payments of €5.73 billion and PRSI forgone of €902 million to 51,700 employers in respect of some 696,900 employees. As part of budget 2022, the Government agreed the EWSS would remain in place in graduated form until 30 April 2022, with these arrangements provided for in section 70 of the Finance Bill 2021. It was proposed, as part of the gradual unwinding of this temporary emergency measure, that the EWSS would revert back to its original two-rate structure from 1 December 2021. However, as announced on Thursday last, it has been decided to maintain the enhanced rates of EWSS subsidy for a further two months, namely, December 2021 and January of next year.
Consideration was given to providing targeted support for businesses that are subject to the latest public health restrictions using a modified version of the Covid restrictions support scheme, CRSS. However, on further consideration and analysis of the available data, it proved to be administratively very complex to design such a scheme and it would not have been possible to have it operational ahead of Christmas as had been intended. Instead, maintaining the enhanced rates of subsidy under the EWSS for a further two months offers a relatively more efficient and effective way to support affected businesses in the immediate term. This will give certainty to businesses when they need it most. It will assist businesses during the Christmas period, especially those in certain sectors, such as the hospitality sector, that may be operating at lower levels than anticipated due to recent public health restrictions.
I am pleased to advise the House that Revenue has confirmed it is possible to pay the enhanced rates of subsidy to businesses in a timely manner. All eligible EWSS payroll submissions received from last Friday onwards will be processed using the enhanced subsidy rates. In addition, Revenue has confirmed that it is currently identifying any relevant payroll submissions that may require a top-up to bring such payments in line with the enhanced rates, and payments will be made to employers shortly thereafter.
The consistent approach of the Government has been that there will be no cliff edge to the support under this scheme. At the same time, it is clear the EWSS cannot run indefinitely, nor is it sustainable to continue with the enhanced rates for a prolonged period, given the very substantial cost to the Exchequer. As such, from 1 February 2022, the parameters for EWSS as announced on budget day will apply. For February 2022, a two-rate structure of €151.50 and €203 will apply. For March and April 2022, the final two months of the scheme, a flat-rate subsidy of €100 will be put in place. The reduced rate of employers' PRSI will no longer apply for these two months. Businesses availing of the EWSS on 31 December 2021 will continue to be supported until the scheme concludes on 30 April 2022.
Since the onset of the Covid-19 pandemic, the Government has adopted a proactive and dynamic approach to supporting businesses and individuals insofar as possible during this challenging time. We will continue to monitor health and economic developments closely. I am pleased to confirm that these recommendations were approved by Seanad Éireann last night. I commend them to the Dáil.