Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I acknowledge the amendment put forward by the Deputy. In response to the Covid-19 pandemic the Government introduced a range of supports for businesses including the TWSS and the EWSS. The wage subsidy schemes were emergency support measures introduced and developed in extraordinary times. Both the TWSS and the EWSS are statutory schemes underpinned by legislative provisions in the Emergency Measures in the Public Interest (Covid-19) Act 2020, as enacted the Oireachtas. The wage subsidy schemes have been at the centre of the Government's response to the pandemic with substantial supports amounting to €10.6 billion being provided to date. Of that, €2.8 billion is attributable to the TWSS, €7.8 billion to the EWSS, €6.78 billion to subsidy payments and €1.03 billion to PRSI foregone.

The TWSS was introduced in March 2020 to support viable firms and maintain the relationship between employers and employees. At the outset, it was expected the TWSS would be in place for a period of 12 weeks but it remained in place until 31 October 2020, a period of five months, due to the public health restrictions. The TWSS was replaced by the EWSS with effect from 1 September 2020. The EWSS operates as an economy-wide support with the objective of supporting businesses, encouraging employment and helping maintain the link between employers and employees. The current longevity of the EWSS was never foreseen or anticipated at that time.

I am confident the Minister for Finance satisfactorily fulfils his duties and obligations required of his role and the Department as specifically set out in sections 28A(4) to 28A(6), inclusive. The duties and obligations are to monitor and superintend the scheme, to carry out an assessment of the scheme at least every two months and after such an assessment to determine, following consultation with the Minister for Public Expenditure and Reform and the Minister for Social Protection, whether it is necessary to exercise the powers conferred on the Minister to adjust certain aspects of the scheme.

More broadly, and perhaps this is the issue the Deputy is endeavouring to touch on with his amendment, I am satisfied that the wage subsidy schemes were an efficient use of taxpayers' resources. The employment wage subsidy scheme, EWSS, acted as an appropriate and necessary stimulus to the economy mitigating the effects of the pandemic on the economy.

I am also satisfied that the wage subsidy schemes achieved their objective to support employment and maintain the vital link between employers and employees. Putting this in context, 67,000 employers availed of the temporary wage subsidy scheme, TWSS, in respect of almost 690,000 employees. That is a phenomenal number of employees that were directly supported by this scheme. To date, 52,000 employers availed of EWSS in respect of 733,000 employees. I am also confident that in these unprecedented circumstances the EWSS was appropriately calibrated in terms of supports to business.

The Government adopted a prudent and phased approach to the extensions of any of these schemes. As I said, it was never envisaged at the outset of these schemes how long they would be required. The success of the schemes is clearly evident by how quickly our economy has adapted and recovered following the lifting of public health restrictions.

Furthermore, without the support of EWSS many businesses might not be in existence today. I am satisfied that the EWSS operated as an effective and responsive measure to aid economic recovery during these unprecedented times.

Since the introduction of the scheme, it has been under active consideration and review in terms of its responsiveness, cost and impact which, in turn, inform the policy responses and any amendments to the scheme. As I said, we moved from one scheme to the other because of the various circumstances.

In addition, section 28A(5) of the Emergency Measures in the Public Interest (Covid-19) Act 2020 provides that an assessment shall be carried out at least every two months. While the legislation does not stipulate that a report must be prepared, my Department prepares bimonthly EWSS utilisation papers which capture the key analysis of the scheme. These papers have been completed since the introduction of the scheme and the papers which have been furnished to me are published on the Department's website. The information the Deputy is talking about is available on the Department's website and has helped consideration of the scheme.

In relation to the companies which avail of the wage subsidy scheme which may have paid dividends to their shareholders, I would point out that the eligibility criteria of the wage subsidy scheme, as provided for in the legislation, do not include any conditions in relation to a company making a distribution to its shareholders. Thus, there is no impediment on an employer paying dividends to its shareholders and this is a business decision for an employer to take based on the financial circumstances.

As I have stated on many occasions, the overwhelming majority of companies that have participated in the wage subsidy scheme did so because they genuinely believed they would need support at that point based on the effect of the pandemic on their business. The experience of both Revenue and my Department is that employers participating in the scheme did so in good faith.

As regards the Deputy's amendment for a report on whether and to what extent companies paid a dividend while they availed of the wage subsidy schemes, I am advised that the Revenue recently carried out a short exercise to identify dividend withholding tax returns filed by EWSS claimant companies in respect of distributions in 2021. The dividend withholding tax applies to a wide range of different types of distribution. This includes both intra-group distributions and dividends paid to shareholders, both cash and non-cash distributions, for example, the use of additional shareholding by way of additional shares. The dividend withholding tax, DWT, neither distinguishes between these different forms of distribution nor sets out the accounting period to which the distribution may relate. Therefore, the Revenue advises that it is not possible to determine whether distribution payments relate to profit reserves earned before or during the pandemic. It is important to put that on record. Sometimes dividends might get paid at a later date and some of them may relate to profits that had existed prior to the introduction of the scheme.

As the Deputy said, the Revenue's exercise showed that 641 employers out of a total of 51,900 which had received EWSS filled dividend withholding tax returns advising of some form of distribution during this period. However, it is not possible to determine whether the distributions were cash or non-cash in nature or whether any dividends were paid to shareholders. At the time, the 641 companies had received gross EWSS subsidies of €267.8 million. Nineteen of these employers have returned all subsidies received totalling €27.9 million while 84 have partially repaid EWSS received amounting to €5.8 million.

I understand this information has already been supplied directly to the Deputy. At least we are all speaking from the same factual basis.

For the reasons I have outlined, I am not in a position to accept the Deputy's amendment.

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