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.
I thank the Ceann Comhairle for the opportunity to speak this afternoon on the motion to extend the employment wage subsidy scheme, EWSS. I very much welcome the extension of the existing rates of the EWSS until 31 March. It is something for which Sinn Féin has been calling for a number of weeks and it is welcome that the Government has finally got around to putting the motion before the House. It is timely that we are having the debate here today.
Extending the EWSS will provide continued support and much-needed certainty for workers and employers amid the ongoing level 5 restrictions. We all know that the EWSS is needed to combat the possibility of unemployment and perhaps it will be needed for a period after we overcome this virus through a combination of public health measures such as social distancing and, more importantly, a widespread vaccination programme. We need to be alert to the fact that it is quite possible the continuation of this scheme may be required even beyond the public health emergency and as the virus goes into retreat, as we hope it will, there is a case to be made for the extension of the scheme even beyond that time to facilitate workers whose businesses will take a while to get back up and running and to ensure we minimise job losses to the greatest extent possible. With that in mind, I ask the Minister to put in place a firm plan for the continuation of the EWSS after the end of March.
In his contribution, the Minister referenced the need to avoid what he referred to as a "cliff edge". That also means not postponing the cliff edge. There needs to be some degree of certainty. We know this public health emergency will not end overnight and will extend beyond March, into the summer and possibly even further, depending on how our vaccination programme is rolled out. At the moment, there is what from the outside looks like a staggering level of ineptitude at the level of the European Commission as a whole, especially in the office of the President of the Commission, as it relates to the procurement of vaccine, which combined with the ineptitude of our Minister for Health, and it gives me no pleasure to say that, means it looks like we are a long way off vaccinating the whole population.
I want to raise a point with the Minister because it is something that has been raised with me and I feel duty-bound to pass it on. Countless times in the past number of weeks, I have been contacted by workers who have referred to the structure of the temporary wage subsidy scheme, TWSS, and the tax bill they have faced. This causes massive concern for many workers and their families. The Minister's decision to base the wage subsidy on net pay has resulted in what amounts, effectively, to a double deduction for workers. The TWSS was calculated as a percentage of an employee's previous net weekly earnings rather than gross weekly earnings. In other jurisdictions, such as Denmark and the North of this island, wage subsidies were calculated as a percentage of the employee's previous gross weekly earnings, not their earnings after tax, and was at that stage subjected to tax. Tax and payments that were calculated as a percentage of net earnings effectively amount to a double deduction for these workers and they asked me to relay that message to the Minister. He needs to explain to those workers why it was not based on gross weekly earnings because we have ended up in a serious situation where workers are saying that a double deduction is applying to them.
Do not get me wrong, those workers are very appreciative of the EWSS, the pandemic unemployment payment, PUP, and all of the support schemes but there are a number of workers out there who believe themselves to be entitled to a redundancy payment and we know there is, effectively, a moratorium on redundancy payments. Those workers are keen to have a two-way engagement around the moratorium. Many have contacted my office seeking a discussion on a contingency plan to ensure that workers can access redundancy if they wish in a way that does not put businesses into financial jeopardy. I appreciate that at the time these measures were brought in, it was not anticipated that they would have to last for as long as they have, but that necessitates a further conversation. All that those workers want is a two-way conversation.
I have only one chance to speak in the Chamber today so I will raise with the Minister the issue of the Debenhams workers who have today been on strike for 300 days. They have stood steadfast and campaigned with what can be described as only bravery and, indeed, dignity. All they want is for their collective agreement to be honoured and for a fair and decent redundancy to be paid to them. Last week, we saw nearly 500 workers across Arcadia Group find themselves in the same situation. They also want their collective agreement to be honoured. Not only should the Government take steps to ensure the Mandate workers can benefit to the full extent from the money the Government has promised, €3 million, but we should also expedite legislation to ensure we do not have a Debenhams mark 3 or Debenhams mark 4 and so on. That would be a fitting legacy for what these brave workers have been forced to go through.
Mar is eol don Aire, tá muidne i Sinn Féin tar éis tacú le fanacht agus dul chun cinn an EWSS go dtí an 31 Márta. Tuigimid cé chomh tábhachtach is atá an scéim seo i gcomhair na ndaoine atá ag brath ar an airgead seo. Ar ndóigh, an rud atá mé féin chun caint faoi ná na daoine sin atá ag iarraidh morgáiste a fháil agus nach féidir leo mar gheall go bhfuil siad ar an scéim seo. Impím ar an Aire labhairt leis na bainc faoi seo mar is rud uafásach é do na daoine sin nach bhfuil in ann morgáiste a fháil mar gheall air sin.
I raise the issue of those who are being refused a mortgage as a result of accessing the EWSS. I first point out that we in Sinn Féin welcomed the extension of the existing rate of the EWSS until 31 March. We welcomed it on the basis that it would provide continued support and much-needed certainty for workers and their employers amid continued level 5 restrictions. We believed that was absolutely necessary. Sinn Féin has been constructive in the operation of the wage subsidy schemes. We sought to ensure increased rates for low-paid workers and for the inclusion of women returning from maternity leave under the TWSS. That is, of course, extremely important. We consistently argued for increased rates under the new EWSS when it was first introduced in September. We felt it was clear that wage supports will be necessary for some time to stave off the scourge of unemployment and their design will, of course, require ongoing consideration and the slow roll-out of the vaccine has further underlined that necessity.
Having said that, however, we in Sinn Féin also recognise that the money spent on the TWSS, as well as on the PUP and on the Covid restrictions support scheme, CRSS, have been massive State subsidies to a private sector comprised of households and businesses. These State subsidies have been supported by Sinn Féin because we see them as serving the greater good. They have managed to keep many people who would otherwise be out of work connected to their employers. They have kept many businesses going that would otherwise have been liquidated. They have also allowed borrowers - individuals and corporate customers alike - to continue making repayments. That is why I find it so shocking and deeply concerning that some lenders and brokers are still refusing to accept an application for a mortgage from somebody who is on the EWSS. I find it incredible that this could be allowed.
An awful lot of constituents have contacted me. We know how precarious the housing situation is; I am sure I do not need to tell this Chamber how difficult it is for many people, and those in Galway city are no exception to that rule. Numerous constituents have come to me because they have found themselves in this situation. They have asked me what they can do and there is very little that can be done when one person in a couple is on the EWSS and the couple simply cannot get a mortgage although all their ducks are in a row. They are now facing a situation where they will be unable to stay in their rented accommodation and are facing homelessness because they simply cannot get mortgage approval. We need to remember that the State remains the key player in the financial sector, just as it is now a key player in the labour market in general.
In case the Government needs reminding, in the financial sector it holds a majority stake in both AIB and Permanent TSB to the tune of 75% and it holds a 14% stake in Bank of Ireland. I cannot think of any other shareholder with such a major stake that takes this kind of hands-off approach. It is clear that the restrictions will last for some time. We are all aware of that, so schemes such as the EWSS will be with us throughout 2021 to support people. We must ensure that the Government addresses the fact that people cannot get a mortgage because they are on the EWSS. I urge the Minister to do that.
I join with my colleagues in welcoming the extension of the employment wage subsidy scheme at the existing rates. I note that a similar announcement has been made on the pandemic unemployment payment, which is welcome. In the case of the PUP, the Minister, Deputy Humphreys, has said that in the coming weeks the Government will be looking at a possible extension beyond 31 March. It is now February, so I ask that the Minister would do likewise for the EWSS. It is important that workers and families have a bit of certainty as they go through the month of February and into March. It is especially important given the Government's inaction today in terms of helping those very people with growing bills which is a major concern, but it is not something on which the Government is going to take action.
As is the case with the PUP, the upper limit is €350 for all those earning in excess of €400 and all those workers are on reduced income. A big issue arises in that, regrettably, mortgage breaks have not been announced. I ask the Minister to examine the matter again. The banks should be doing their bit in the middle of the pandemic.
I thank the Minister for presenting this important motion this afternoon. The Labour Party fully supports the motion and the extension of the EWSS going forward. The TWSS, and its successor the EWSS, have been an extraordinarily important initiative taken by the Government. It has literally been a lifesaver for countless businesses and workers across the country.
The Minister might recall that a couple of short years ago the Labour Party and the Irish Congress of Trade Unions separately called for the development of such a scheme to help to counteract the then threat of a potential hard Brexit in the event of no deal being agreed. We have been discussing the principle of wage subsidy schemes in this House and outside for some time and now it is a reality to support businesses and jobs across the country. It has been a considerable success. The Minister admitted that the scheme will, in effect, be extended to the end of the year to deal with the reality of the situation currently for so many businesses and workers.
I believe the wage subsidy scheme, or something of this nature, must become a permanent feature of the labour market, in particular to assist workers with the just transition. So many workers and businesses are at risk as we move towards a zero-carbon situation and schemes like this will be most important. If they are to become embedded in the system, it is important that they evolve and that the State ensures that we get better outcomes for workers and businesses. For that reason, in the context of our pre-budget proposals late last year, the Labour Party proposed a German-style short time working scheme which we called ObairGhear. It would involve attaching conditions around training, upskilling, productivity for access to schemes and also that employers obtaining benefits from such schemes would ensure no lay-offs would occur for the duration of their involvement in such schemes. We also believe any such schemes should be conditional on the recognition of trade unions and collective agreements applying to workers in such employment.
I will briefly turn to the issue of the EWSS and mortgages. Last October, I lifted the lid on the practice of banks, including State-owned banks such as Permanent TSB and AIB, asking mortgage applicants whether their employer was availing of the EWSS. Not only has this practice continued in recent months, but it has escalated. I have been contacted by numerous people, mainly couples who are first-time buyers and who are now being denied drawdown on their mortgage by banks due to their employer being registered on the EWSS. The Minister and his team might be familiar with one such case, that of Adele and her partner, who have written to him directly on this issue. Adele is not a pseudonym. She has consented to her name being identified, such is her frustration at the way she has been treated. She and her partner, like many others across the country, who I have been directly helping, are now in a fight to secure their home with their bank, which has explicitly stated it will not proceed with the mortgage because the "employer is availing of the wage subsidy". The implications of this statement are massive. More than 300,000 workers and some 30,000 employers are availing of the scheme. This is at the height of a national housing crisis that predates the Covid pandemic. There is now a very real danger that the recent publication of the list of employers receiving the EWSS on the Revenue website may serve as a mortgage blacklist, even if the customer himself or herself does not qualify to have his or her pay subsidised through the scheme by virtue of the fact that he or she might be a higher earner.
As Adele stated to the Minister in her email, the bank's behaviour is nothing short of "disgraceful". She said banks are stabbing people in the back. I noted a similar case in the Irish Independentyesterday. The Minister might be familiar with it. Banks are performing U-turns only after pressure from lawyers, Deputies like me or by journalists asking tricky questions. This is not the way business should be done in this country. For every person who is fighting against the banks, there are countless more who do not have the time, energy or resources to do so. I urge the Minister to give a firm commitment to the House to deal with this form of mortgage blacklisting and ensure that no other homeowner, whose means support their application, is put in this position.
I do not reference my constituent, Adele, to in any way ambush the Minister. He may not have seen that particular case himself although his team may have. I am sure he will respond to it in due course. I reference Adele because her case illustrates a wider problem. Hundreds of individuals across the country whom I have dealt with in recent months are in the exact same situation. That is deeply unfair, and it needs to be resolved.
I thank the Minister for bringing the motion on this extremely important subject, the EWSS, to the House today. I thank him for his work on this, for putting the scheme in place and for its efficiencies to date. It is fair to say that without it we would have more than 300,000 employees who would either be on substantially lower incomes or who may not be in work at all. This transfer from the State to families directly is able to keep people paying existing mortgages and allow them to continue with their lifestyle and employment. Employment is the most important issue for any household to maintain itself.
I thank the Minister for his work in that regard but also for the role he has played in Europe. It is fair to say that none of this would have been possible without the sort of cohesion that has been generated with the participation of the Minister. It is very welcome that the ECB and other institutions have been able to take a very different approach now than was the case previously in 2011 when we did not have an opportunity to take countercyclical stimulus measures of this kind, or indeed other kinds, and where the pressures were very different. That is only possible for a number of reasons. One is that we had a well-run economy going into the pandemic, where there was close to full employment in technical terms. We had good jobs, and we still have good jobs and the opportunity to create more and we have had an activated and engaged labour market using the skills it has. To be able to ride out this crisis and get through it we need the type of supports that ensure people can stay with their employer. This scheme has been doing that extremely well.
It is also fair to say that the existence of the scheme and its efficiency have been able to contribute to our income tax performance, which has been better than all of our predictions and those of the Department. I accept it is a circular process. One of the aspects of the scheme that has been so helpful to businesses, especially small businesses and employees in them, is the certainty that the EWSS model has given them. They can continue to get through the difficulties of lockdowns and the difficulties they face in other parts of their lives knowing there is a degree of income security in their house for those who are eligible to avail of it. I urge the Minister to continue to provide that certainty.
I appreciate the motion before the House and the fact that the deadline under the Act is the end of June.
It is clear that the restriction of activities may go beyond that time and some businesses will need continued support thereafter. I ask the Minister to discuss this with his Government colleagues and provide certainty for businesses as soon as possible. Businesses need different types of certainty. Businesses that can continue to generate income need certainty around the timing of the ending of relevant schemes. They need sufficient notice, whether that be six, eight or 12 weeks, to be able to transition their employees back onto a different pay model. I refer here to businesses that have a significant revenue stream and are able to continue with activity but there is, of course, another class of business that has had no activity for a very long time, predominantly in the hospitality industry.
The Government has taken a range of steps to provide ample support to the hospitality industry, including the EWSS and a reduction in VAT but in many cases, these businesses have not had the opportunity to claw back the benefits of same because they have been closed. I give the example of an hotel in my area which engaged in substantial investment in the last number of years. The hotel accrued profits and invested them in the redevelopment of the hotel. It was achieving four-star status, had significant commercial loans which it was more than amply servicing and had approximately 80 employees. The hotel is managing through this crisis and doing what it can with its employees to continue to invest and improve the hotel for when it reopens. Of course, the VAT reduction was very welcome but because of the lockdown, this business has not really been able to enjoy the benefit of it because it has not generated sufficient revenue. For businesses like this one, and countless others around Dublin and the rest of the country, the extension of the EWSS is important in itself but it is also an opportunity, if particular consideration can be given to that sector, for them to try to claw back some of the lost revenue in circumstances where they have had to continue to service commercial loans of the kind I have described. There is something slightly different about these businesses vis-à-visthose that have been able to continue to trade, albeit on a reduced basis. As we come out of the lockdown and hopefully move into a more nuanced period of economic planning, I hope the Minister will be in a position to consider sectoral solutions of that kind.
The mortgage issue raised by other Deputies is such a difficult one to resolve. I have had the same issue raised with me and I understand the difficulties at the moment in terms of security of income from the perspective of lenders generally. This is causing difficulties and leaving people stuck, including those who have - or hope they have - stable jobs, incomes and deposits. The overall impact is going to be on housing market activity and activation and people may be stuck in rental accommodation for longer than is necessary. I appreciate the risk issue from the perspective of banks generally but this is affecting people who are not at fault. There is nothing they can do and it is an ongoing problem.
I thank the Minister for bringing this motion before the House today. The EWSS has been an absolute lifesaver for businesses in Ireland, particularly small businesses and the hospitality sector more generally. Without this measure and without the support that the State was able to acquire and then provide to our businesses and their employees, we would be in a very dark place indeed. It is extremely welcome and I thank the Minister for his efforts in Europe to ensure it can be continued. The more certainty that the Minister can provide to employers and businesses over the next 12 months, which we hope will be very different to last 12 months, the better.
I was contacted this week by a start-up company after the Revenue Commissioners adjudged that it did not submit strong enough evidence that its turnover had decreased by more than 25% during last year's trading. This is one of the criteria used to determine "significant negative economic disruption". While I understand the need for some parameters, the company lost a number of contracts due to Covid-19 and can prove it. This is, unquestionably, significant economic disruption by any measure. Other supports are insufficient to keep this business operating and employing staff. These are people who want to create and sustain jobs, which are sorely needed in Kerry, rather than survive on subsidies. The goal of the EWSS is supposed to be exactly that and the spirit of the scheme needs to take precedence in this type of situation. This will continue to be an issue as we face two long years of disruption and no business will have been left untouched by the pandemic.
There have been a number of issues with the EWSS and its predecessor. We must ensure it is fit for purpose. Over the next two years, once the Covid-19 restrictions are lifted and the vaccination programme is completed, life will return to normal but businesses cannot be expected to be completely stagnant in that period. Not only will we lose businesses that contribute employment and revenue to the Exchequer, but we will also strangle new businesses that are so badly needed in the west of Ireland, particularly in Kerry. The long period of disruption will also have a severe impact on the biggest source of jobs in Kerry which is tourism. As the Minister probably knows, over 16,000 Kerry workers are employed in tourism and many of them were shut out of the Covid-19 PUP and TWSS schemes due to seasonality. Last year most of the season was missed, at the loss of €400 million to the economy in Kerry. However, when businesses could open, people flocked to Kerry and businesses thrived for that very short period which proves that they are viable. There is an enormous appetite among people to follow the advice of NPHET and not go abroad but with no certainty about how long the season will be, allowance needs to be made within the EWSS for seasonal businesses.
The Covid restrictions support scheme, CRSS, was introduced to further support those in the hospitality and tourism sectors but it ignores any business lacking an on-premises customer experience and excludes a number of outdoor and activity-based tour operators, wholesalers and travel agents working remotely. These businesses are struggling to reopen and are facing permanent closure. In that context, I ask the Minister to extend the scheme. The recently announced tourism recovery fund will help some of these operators and while I welcome it, it is months late and should not have been necessary. We seem to have a trend of stressing businesses to the maximum and only then intervening. Extending the EWSS should ensure that it is accessible to those who need it and should offer those who have spent years, if not decades, adjusting their lives around seasonal business some reassurance. Kerry is the county most affected, according to all surveys.
Finally, it is 300 days since the start of the Debenhams picket and once again I pay tribute to Geraldine, Amy, Trish and the many others who have maintained their vigil at the former Tralee store. I understand that Mandate has recently written to the Taoiseach but has yet to receive a reply. I call on the Government to intervene even at this late stage to help the Debenhams workers. If ever proof was needed of the inequity in the system between workers and capital, this is it. I ask the Government to recognise the right to collective bargaining and to implement the recommendations of the Duffy Cahill report as soon as possible. State supports such as the EWSS should not be available to companies that do not recognise the right of workers to organise.
If he comes in, the Ceann Comhairle might point that out to me. I am glad to have the opportunity to engage with the Minister and Minister of State and make a few points. Obviously, it is common sense for us, as per the motion, to extend the EWSS without which the misery of the last nine or ten months would have been much worse for people throughout the country. Initially it was pitched at the wrong level, perhaps, but we amended it fairly quickly to give people some level of support while at the same time ensuring we maintained the link between employee and employer. This will be critical when we manage to reopen, which we hope will be in the nearer rather than longer term as the vaccine situation improves.
I seek clarification on an issue that is not specifically related to the EWSS. Obviously, many people are working from home at this moment in time.
An issue is beginning to surface with these people. For people with modest means, bills for the telephone, broadband, electricity and so on may become significant. They may have been in a position to deal with those costs over the past nine or ten months while all the family was based at home and, perhaps, the husband and wife or couple were working from home. I understand that a modest relief may be claimed by people who are working from home. Perhaps the Minister will clarify that in his response. I believe the relief to be of the order of €3.50 per day which, over a long period of time, can amount to a significant amount of money. There seems to be some confusion as to whether the onus is on the employee or on the employer with regard to the relief. It is unclear if the employer is to provide this money and then claim it back from Revenue or whether it is for the individual employee to claim the relief in his or her own annual return. I would appreciate it if the Minister could provide some clarity in that regard.
I believe both Ministers are on record as saying that, while this extension is to last until 31 March, and my God do we all yearn for an improvement in the number of Covid cases and an increase in the number vaccinated which would permit a return to work or some level of normality at that date, our most optimistic forecasts do not remotely suggest such a date. An extension of these supports will, therefore, be required. I know the Minister has indicated that they can be extended to June 2021 but, in reality, we need to send a message loud and clear to the people that we are prepared to extend it for the entirety of the year so that we can deal with the Covid problem while at the same time ensuring that people are given adequate support, that they will not be left behind, and that the budget will be provided for that.
I notice Deputy Dillon has now joined us. I will pass over to him in just a couple of seconds, with the permission of the Leas-Cheann Comhairle. I reiterate the call I made to the Ministers last week with regard to the extension of the Covid restrictions support scheme, CRSS, to more businesses. I gave a very detailed example last week of 17 wholesale bottlers that require admission to the scheme, but there are many more such firms. On the enterprise side, the Minister of State, Deputy Troy, is very much in favour of this. I hope he will not find the Ministers' Departments wanting in providing for it. A safe and fair way to do this might be to extend it to any business that currently does not qualify but which is subject to a commercial rates bill.
I appreciate the opportunity to speak on this important motion today. Last month, I welcomed clarification from the Minister for Finance that the period for determining eligibility for the employment wage subsidy scheme, EWSS, during the first and second quarters of 2021 is to be the same period in 2019. This will elicit a sigh of relief from many employers and their employees. There were early complaints about the scheme arising from issues such as the processing of wage subsidy payments to employers taking up to six weeks. I understand that the revised payment schedule is now, thankfully, ensuring speedier delivery. This, in turn, will support and boost cash flow within businesses.
I commend the Minister, Deputy Donohoe, on the EWSS as there have been very few issues with the scheme over recent months, with one exception. There are, however, concerns emerging about the uncertainty as to whether it will be extended in its current form beyond late March. An issue being raised with me increasingly over recent weeks has been the extension of the EWSS beyond 31 March 2021. I appreciate the Minister's opening statement that there will be discussions on this matter. Both employers and employees are fearful that they may lose the enhanced rates which are in place until that date. I urge the Minister to extend the scheme for as long as possible and until the vaccination roll-out programme has reached a critical mass and we can avoid a cliff edge. Almost 1,200 businesses in Mayo availed of the EWSS during 2020 and it is serving as a vital support for those businesses in a wide range of sectors that have had to close their doors for significant durations during this pandemic.
On a separate note, I welcome the recent announcement of the tourism business continuity scheme. Some €55 million will be provided to employers who fall outside the Covid restrictions support scheme. While it is a step in the right direction, it still falls short. I regret to say that there are still some businesses which do not meet the eligibility criteria for the scheme, which I understand to have been designed for those ineligible for the CRSS. There are businesses connected to the tourism sector, including laundry service providers to the hospitality sector and audiovisual engineering providers in the entertainment sector. These businesses are truly on their knees while other businesses are in receipt of supports.
I implore Departments and Ministers, including Deputies Catherine Martin, Humphreys and Michael McGrath, to work together to find suitable funding for those falling between the cracks considering the range of support schemes available. Just because they do not have premises to which the public have access, it does not mean that they are immune to the economic impact of this pandemic. Significant collaboration between Departments is needed as a matter of urgency.
Cuirim fáilte roimh an Aire. An tAire will recognise that my party and I worked constructively to address many of the gaps in the old temporary wage subsidy scheme, ensuring a higher rate of subsidy for low-paid workers and the inclusion of women returning from maternity leave. As he will know, I was critical of the new scheme that was introduced in September of last year on the grounds that it significantly cut the levels of wage support for workers. I warned the Minister at the time, and have consistently done so since, that the Government was walking into a jobs crisis if the rates of wage support were not enhanced. I am thankful that, on 20 October, the Government changed direction and enhanced these rates in a decision which I welcomed. However, the Minister made clear at that time that the enhanced rates would only last until 31 January, after which they would again be cut to the lower rates of €203 and €151.50, arbitrary rates that risked another cliff edge. As I said on 6 January, to make this cut during the period of level 5 restrictions, which were all but certain to continue beyond January, would be reckless and would lead to wage subsidies being cut for more than 300,000 workers. At that time, I called on the Government to extend the existing rates until at least 31 March 2021. I welcome the fact that the Government has now done so with this motion.
In January alone, payments of €331 million were paid out to 44,800 employers, supporting the salaries of 315,200 workers. This is money well spent. Had the Government not supported incomes and businesses through deficit spending, it would be a different story. What is now a supply shock would have become a demand-side crisis with permanent job losses and business failure. The deficit has served its purpose and we must now turn our attention to the future.
Recovery will take time. In its most recent quarterly bulletin, the Central Bank suggested that employment will not recover to pre-pandemic levels until 2022. Given that this is the case, wage supports must remain a feature of our economy in the medium term. Workers and employers cannot afford uncertainty, cliff edges or last-minute announcements from Government. Workers and businesses need assurance that wage supports will remain in place beyond March.
We must also be ready to put in place longer term solutions. There is no need to reinvent the wheel. While we introduced schemes that subsidise a fixed proportion of wages, others utilised short-time working schemes whereby employers pay their employees for hours worked while the State compensates employees for a portion of their pay for lost hours. Germany had such a scheme in place for more than a decade, which helped stave off the high levels of unemployment seen elsewhere during the previous recession. Short-time working schemes are a well-known and successful labour market tool to reduce unemployment which the Minister should consider as a long-term tool.
I will finish by commenting on an issue which has affected a great many workers. It must be remembered that the Government calculated the subsidies under the wage subsidy scheme as a percentage of net earnings or take-home pay after tax. These earning have now been taxed and workers are subject to what is, in effect, a double deduction from their pay. In the North, in Britain and in Denmark, wage subsidies were calculated as a percentage of gross pay, which was then subject to tax. There was no double deduction in those jurisdictions and no taxing of net pay, which is in itself an oxymoron. The decision by Government to act differently here was foolish and unnecessary.
I cannot overstate the level of anger and frustration felt by many of these workers. The fault lies squarely with the Government.
I will finish by saying that as we move forward, I look forward to working with the Minister to ensure we have the supports in place to support workers, employment and our economic recovery. Gabhaim buíochas leis an Leas-Cheann Comhairle.
The public are paying very substantial sums of money to enable businesses to keep going. There is a problem in that we still do not have a system of conditions for the kind of funds that are going to businesses, particularly conditions relating to Covid-19 compliance, to workers who can work from home being allowed to do so, and to how workers are being treated. Anybody who watches the twice weekly briefings from NPHET will repeatedly hear the call that workers should work from home. People should not be leaving their homes if they do not need to do so. There is a repeated and consistent call and it is absolutely necessary if we are to make this lockdown as effective as possible, which will enable us to make it as short as possible.
We all know from our own experience and from the statistics that the traffic volumes in this lockdown have not fallen by anywhere near as much as they did during the first lockdown. In Dublin the traffic volumes fell in the first lockdown by two thirds. This time round they have only fallen by slightly more than one third. The central reason for that is not about people making personal or social trips or anything like that, but is because people are being made, unnecessarily, to go to work. The problem is that the Government has done absolutely nothing about this.
I give an example of somebody who came to me. This has been reported in the newspapers today. An Post Insurance, which is based in Athlone, allowed all of its workers to work from home in the first lockdown, but in this third lockdown has forced dozens of workers to come into work. These workers do not feel safe in work, which is why they contacted me, but they are forced to come into work nonetheless. The real problem is that there is no State authority with any power to do anything about this. This has been an issue now for almost a year. This company is in receipt of significant State money but there is nobody with the power to go in and inspect, to say that these workers should be working from home, to ask why the company is not allowing them to do so, and to say that if the company does not allow this it will be subject to a fine.
I wrote to the Health and Safety Authority, HSA, about this issue generally after many workers spoke to me and commented publicly on social media about the fact that they were not allowed now to work from home. The HSA said that it had no role in deciding whether a company is essential and, effectively, gave the same reply in respect of workers working from home. This is an incredible situation to be in almost a year after the start of the pandemic. The HSA and the unions need to be given the power to inspect workplaces and to fine employers who are not allowing workers to work from home who could be doing so. This scandal is putting the health and the lives of workers at risk. It is undermining our collective effort.
The other issue I wish to raise briefly is the plight of the DAA workers. I have raised it a number of times in the Dáil since the DAA, which receives significant public funds, attempted to use the coronavirus to impose so-called new ways of working which amount, for some workers, to an end of demarcation. These radical changes to workers' rosters are not in the interests of workers. When the craftworkers rejected that imposition and democratically voted against it, the company imposed an incredible 60% pay cut on them. The impact of that on the workers is devastating. One of them contacted me today to say that workers who are unable to pay their mortgages have been forced to give up their jobs as a consequence of the pay cut. This is a draconian approach by the company to try to ram through changes that have not been accepted by the workers and have been rejected democratically by them. It is really an attempt at bullying. As I said earlier, this company receives significant public funds. It should immediately withdraw this scandalous attack on workers, which amounts to a 40% pay cut and a reduction to 60% of wages and time, and withdraw its attempt at imposing so-called new ways of working.
I welcome the decision to continue the enhanced rate of subsidy until the end of March 2021 to cover the current period of the public health restrictions. The enhanced subsidy is estimated to cost another €38 million per week, totalling €323 million by the end of March 2021. The EWSS, which has been a key component of the Government’s response to the continued Covid-19 crisis, seeks to support viable firms and to encourage employment during these very challenging times. To date, subsidy payments of over €1.5 billion have been made and PRSI relief worth over €270 million has been granted to over 41,600 employers in respect of over 476,000 employees. The link is vital because it will ensure that when businesses are able to reopen, they will be able to do so quickly. There will be no cliff edge to the EWSS. It is noted that the legislation implementing the measures provided will be in place until 31 March 2021. This legislation also provides that the scheme may be extended until the end of June 2021, if required, and subject to certain procedural conditions.
I would like to take some time to speak about the implications for employees who are on the wage subsidy scheme. It is imperative that employers clearly outline to the businesses that are availing of the wage subsidy schemes that employees have the right to know that they are getting paid because this has consequences for their ability to access credit. I know that many people who were in well-paid jobs before the pandemic cannot now avail of credit from the banks. The banks should be far more willing to engage with people who face these circumstances during this time, circumstances which have nothing to do with them. They should not be treated unfairly or punished for that reason. While I am aware that we do not want to engage in practices of unsustainable lending, the current level of discretion being shown by the banks on this issue is, quite frankly, cold. A far greater level of engagement and flexibility is required by the banks. I call on the Minister to continue to engage with them on this matter. People's lives should not be put on hold any more than is necessary because of this pandemic. The banks are a public service and they should treat the people as such.
This all comes down to the central message that the wage subsidy scheme has been an instrumental part of protecting our economy and many of our enterprises across the country. I ask that employers be honest with their employees. It is very important that there is transparency so that if employees are in receipt of the wage subsidy scheme, they are told about the implications of such by their employers if they are applying for credit or for a mortgage. This has been highlighted to me by a surprising number of people. It has had significant ramifications in many cases for people who have applied for a mortgage. I ask that the Minister might put some focus on this issue.
The Regional Group certainly supports the extension of the scheme because we see it is as very important in providing liquidity and in softening costs on business owners. As a payroll support, we also see it as helping to keep up payments on social welfare contributions, which are very important for those looking at pension entitlements later in life.
On balance, the scheme is relatively straightforward. This seems to be the reaction of many businesses, although I would point out that Revenue can appear to be overbearing in both the process and the criteria. We have already heard about some of the people who have applied under the scheme. I wish to speak about a company which was 0.1% outside of the threshold, having claimed it. Revenue came back to look for the return of the full amount of moneys that had been subsidised. That is not a way to treat businesses which are quite challenged at the moment. They would not be looking for these schemes if they did not have liquidity and business problems. I ask that Revenue might take a little bit more of a sympathetic approach to people in that situation.
The EWSS is a support to payroll but it does not support other business costs. These have been spoken about previously. One cannot talk about softening payroll costs while ignoring all of the other costs that are building, particularly for businesses that are shut down at the present time. I am thinking of people who are still receiving bills for their rent, for leasing, for utilities and for insurance.
This is another issue which the Government must do more about. We may need to look at the provision of some supports, if it is a case that we cannot soften the situation to some degree. Many people will be coming back to a reduced turnover and may be applying to this scheme, while others may be beneficiaries of the CRSS. Those people will have significant liabilities to face when they return to full business mode. It will be then that the full weight of State supports will be needed to endeavour to keep as many businesses viable and maintain as many people in employment as possible. The scheme has also allowed employers to retain talent. It should not be forgotten that in many cases a good deal of time is spent in training new employees for a specific business after they have been taken on. Having this scheme in place has been very helpful, therefore, in securing and retaining talent until the business environment improves.
The Minister has left the Chamber, but the trajectory of business returns will not be a 90% straight up line. After this experience, many businesses are going to hiccup their way along. Potentially, they will be outside in respect of getting advanced turnover and unable to avail of support from the EWSS. Turnover, however, does not deliver profit. It is margin on turnover which delivers profit. This is again going to become very apparent in the next six to 12 months as businesses look to see if they are viable post-Covid-19 and to see what the demand curve will be like.
There is also going to be a weaning-off period. Once we give supports to businesses, especially in these straitened times, we cannot just come along and decide that what may be significant business supports are going to be cut in a certain month. There must be a period of downsizing over several months. Businesses also need transparency regarding the intentions of the Government and the Revenue Commissioners in this regard. I request that the Minister examine some form of graduated reduction in this context to secure business viability. Some other supports that will be needed, which have already been mentioned, include developments in respect of examinership light and the extension of the CRSS. Many service companies are not receiving CRSS support now, which I reiterate is vital, and yet those companies have these ongoing costs in respect of leasing, rent, etc. We must look more closely at supports in this area.
One other aspect concerning these schemes involves the warehousing of debts. Many companies availing of the EWSS may also have taken advantage of the ability to warehouse debt for value added tax, VAT. It is interesting, however, that one of the taxes which cannot be warehoused is corporation tax. Perhaps the Minister or someone in his Department could advise people about why that is the case. In addition, a year after warehousing debt, if it is necessary to arrive at a payment plan with the Revenue Commissioners, the rate of interest that will be applied is about 8% a year. It is penal to apply that rate of interest at a time when the State can borrow at negative interest rates. The Minister has some touching up to do but, on balance, this scheme is valuable and it is working well. We in the Regional Group are delighted to see it extended. We hope it will be extended for some time and that it will be downsized gradually as it ends.
Thankfully, this scheme has helped many people during the financial hardship which the impact of the Covid-19 pandemic has imposed on them. I raise issues in respect of two groups that have contacted me, and which believe the conditions of the scheme discriminate against. The first group consists of approximately 80 travel counsellors, most of whom have been refused access to the CRSS on the basis that the premises which they operate do not meet the eligibility criteria. I spoke to one such travel counsellor in my constituency office in recent days. That person started out as a self-employed travel counsellor some five and half years ago, in July 2015, and worked extremely hard to build the business from scratch. It grew year-on-year up until 13 March 2020, when everything came to a complete halt.
The business model of this endeavour has always been one of working from home to enable the provision of personal, one-to-one services to customers 24-7. The business is fully bonded and licensed by the Commission on Aviation Regulation, and its home office is a fully functional travel agency. That office has never been closed, the proprietor always keeps the landline and mobiles phone lines open to help clients. The clients of that travel counsellor who transferred or moved their holiday bookings from 2020 to 2021 are now again amending or cancelling their travel, leading to the processing of more refunds. Income on earnings in that business is down more than 100% since the start of the pandemic and there is no end in sight.
Travel counsellors are being refused access to the CRSS scheme because they do not have a shop front like travel agents. The reality, however, is that they have overheads in the same way as other businesses and their revenues have reduced to nothing. If these travel counsellors do not get the financial supports they need, they will not be in a position to return to operation when we get back to normal. Our tourism industry has been one of those hardest hit in this pandemic. Business in that sector has been almost completely wiped out. This area, however, will be one of the cornerstones of rebuilding our economy when we get to the post-Covid-19 era. I therefore ask the Minister to look at the case of these travel counsellors to see if they could be found to be eligible for the CRSS payment.
The other issue I raise, and which I have done several times previously, concerns track bookmakers. These are again a small group of people who have had no access to their places of business since March 2020. It looks like that will be the case as well for the foreseeable future. Track bookmakers again have no shop fronts. Most of them are independent operators who bought their stands at the various racecourses and, in most cases, they paid substantial amounts of money for them. These track bookmakers also have loans and liabilities connected with having access to their places of business. We all know people are not allowed into racecourses now and track bookmakers cannot operate their businesses. It will be that way for the foreseeable future. When we eventually get back to normality, these track bookmakers will be part of the horseracing scene. They bring great glamour to the occasion which is a day at the races. It will be a pity if this Covid-19 pandemic signalled the demise of the profession of track bookmaker. I request the Minister to examine this situation because track bookmakers cannot get access to their places of work and they have made fairly significant investments to set themselves up in this line of work.
Turning to the tourist bus area, €10 million was awarded to that sector last year. The funds were to be distributed by Tourism Ireland. It is much longer than six months now since that money was awarded to the tourism bus sector. A bus operator contacted me this morning and told me that none of that money has yet been distributed. Cash flow in these businesses is virtually at zero now. They welcomed the award of this money most gratefully in mid-summer last year but it is unforgivable that the money has not yet been distributed six months later. I ask the Minister to contact Tourism Ireland, find out why this money has not been distributed and get it done as soon as possible. I make that request because these businesses are starved of cash flow and are under great pressure as they face into a second very difficult year. It will be harder for these companies to survive this second year, so I ask the Minister to ensure that when money is allocated to different sectors that there is a strict timeframe for its distribution. It is unacceptable for that timeframe to be six months, as has been the case in the tourist bus sector, and this money must be distributed without delay.
We have two speakers.
I raise the issue of caravan and camping parks, which have been unfairly excluded by the Revenue Commissioners from the Covid restrictions support scheme, CRSS. As providers of seasonal accommodation, camping and caravan parks should be eligible for the scheme under the heading which covers hotels, bed and breakfasts, guesthouses and similar accommodation providers. In early December, the Revenue Commissioners updated the CRSS guidelines to exclude camping and caravan sites on the basis that they were operating outdoor activities and such outdoor activities are not ordinarily carried out from a business premises, as defined for the purposes of eligibility for the CRSS. This is incorrect because the situation is contrary to the understanding of the Revenue Commissioners and the operators believe that they should have been included within the remit of the scheme.
The Irish wedding industry is also in crisis. Its contribution to the economy is estimated to be a minimum of €2.3 billion per annum. Some 60% of those responding to a query in this regard estimated that they had lost more than 75% of their wedding business in 2020.
Two thirds of the respondents had to lay off staff because of a loss of business. They need financial support for the industry for this year, and realistically for the first six months of 2022. Wedding services are not recognised as an industry and, as such, have been left off access to supports or industry forums, including the most recently announced Fáilte Ireland supports. Wedding services need to be recognised as a valuable industry. The Government needs to engage with them. These businesses make their living providing goods and services, venues and accommodation, food and beverages to the 21,000 weddings in Ireland each year, not to mention the 21,000 couples and their families who are now in limbo. These are couples and families who do not know when they can have the day they have spent so much time looking forward to and on which they are willing to spend so much money.
As I said in the House this morning on the issue of fuel poverty, the people who are in receipt of a pandemic unemployment payment should be included in the fuel allowance and not have to wait 15 months before they can apply.
People over the age of 66, the people who built Ireland and who continue to work, have been left with nothing, not one single brown cent. Nothing has been given to them aside from being told that they have to isolate. Nothing was given to this cohort of people, which is scandalous. These people worked hard. They are the people who got up early in the morning and who worked to put the country the way it is and who, unfortunately, have been left behind.
I offer my thanks and congratulations to the Minister of State, to the Department, to the social welfare people who are out there dealing with this, and to Revenue for this excellent scheme. It has provided very valuable funding for businesses that have grown over the years, which are businesses that give huge employment. I welcome that the scheme is extended to 31 March. I want to ensure, however, that we have reasonable debate in advance of that date to extend it further since we are not going to be out of this in any make, shape or form.
Other speakers have already mentioned the other sectors being neglected. The wedding services sector is a huge and valuable industry. One would not realise the amount that is in it. As Deputy Cahill has referred to, the bookmakers who do not have a bookmaker's office travel and have a stall, which they pay for. Some of them would have a stand at ten or 11 different courses. These people are also disallowed on the scheme. The people who are over the age of 66 are being denied any scheme. Many of these are active business people with their own businesses, be it a bus, a van or a lorry. Just because it is parked beside their house and they do not have a rateable premises, they have been excluded from everything. They have not got a penny. They should definitely be supported. Consider also the travel agents or travel planners who may not have an office, or if they do it is in their own home. They too are denied access to the schemes.
There are a lot of anomalies and I am aware it is hard to get everyone, but one would think it could be tweaked. It is unforgivable, as the previous speaker has said, about the money from Fáilte Ireland for the bus hire. There are many people who do the bus transport for school runs with their own buses, and they are over the age of 66. They are not getting a shilling. It is appalling that there was €10 million for tourism sector supports and seven months later it has not been administered by Fáilte Ireland. What is going on? I am aware that people must work from home, which is difficult, but it is not fair to the people who need the money now. They needed it yesterday and they needed it six months ago. They must air and drive and keep their vehicles to keep them fit and ready for operation and to keep them running right. They need to get those supports. We need to try to support them and reach out to those businesses that are not getting funding. The people over the age of 66 would be a big cohort who are being denied everything. They do not get aon pingin amháin, which is a pity.
Throughout the course of this pandemic the Government has made a habit of prolonging uncertainty for as long as it can. Since 6 January Sinn Féin has called for the existing rates of the employment wage subsidy scheme, EWSS, to be extended to give workers some certainty, and for the supports that have been in place to continue. The Government, in its usual way, delayed and delayed in bringing this motion to us today. While we note this delay, we welcome that the existing rates of the EWSS will be extended until 31 March. This will provide much needed certainty for businesses and employees that they will continue to receive the supports at current rates.
Throughout the pandemic, Sinn Féin has campaigned purposefully for increased rates for low-paid workers and for the inclusion under the old temporary wage support scheme, TWSS, of women returning from maternity leave. We also argued for increased rates under the new EWSS when it was first introduced in September.
Another flaw in how the Government designed the scheme was in enabling the taxing of workers under the TWSS. This is because the Government decided to base the wage subsidy on net pay. This resulted in a double reduction for workers. When the new scheme was introduced, we rightly criticised it because it included cuts in wage supports for employers and employees and the removal of all wage supports for the lowest income workers. The pressure we in Sinn Féin applied to address this unjust reduction in supports resulted in the Government agreeing to increase those rates in October. The pressure we continue to apply has seen the Government reversing its decision to reduce these rates again. It must be noted, however, that the Government continues to leave out the lowest paid workers.
The EWSS is not the only issue that needs to be addressed for the sake of our workers and the businesses that are dealing with the prospect of prolonged restrictions and unemployment. Consideration must also be given to reviewing the Covid restrictions support scheme, CRSS, scheme, because currently far too many businesses are excluded. In this context I am referring to the County Tipperary Chamber, and I ask that the Minister notes this. From the feedback the County Tipperary Chamber has received from its network, the CRSS is viewed as being too limited and excludes many businesses that have been directed to shut in the latest wave of restrictions. Non-essential retailers, for example, may receive assistance because of the closures but their suppliers do not. They point out that it is even more important for support schemes to be extended and expanded so that they are effective. They ask that if the CRSS scheme cannot be revised immediately, then new payments would be provided to support businesses that have been forced to close. The chamber warns that without this intervention, the growing debt burden experienced by businesses will likely trigger a wave of insolvencies and job losses that will permanently scar local economies nationally. I ask the Minister of State, Deputy Fleming, to speak to our chambers of commerce and listen to the challenges that face every community out there, which are not necessarily represented in the confines of Departments.
By leaving matters to the last minute, the Government has little respect for the hard-pressed families and businesses concerned and it seems to be of the opinion that these businesses should be grateful that decisions are actually made. Similar delays are apparent across the sectors, including supports for the additional three weeks’ parental leave, which remains unaddressed three months after the budget. Our student nurses and midwives have been left waiting for recognition for so long that Sinn Féin was forced to bring a motion to the House highlighting how student nurses and midwives have a right to be paid for the work that they do, especially since so many are working beyond their initial requirements. While the extension of the rates under the EWSS is welcome, there is much more to be done and the Government would be well advised to listen to workers and employees, to people who are unemployed, to families and all of the sectors who are having to deal with this crisis in their own individual ways.
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.
I welcome this debate and thank the 20 Deputies who contributed to it, covering a large number of issues. In the first instance, everybody recognises that the wage subsidy schemes, the earlier one and the current one, have been a central pillar of the Government's response to the economic impact of Covid-19 by supporting viable firms and encouraging employment. To that end, it is an important bridge between social welfare payments such as the pandemic unemployment payment and regular employment, which is the ultimate goal. To the maximum extent possible, the objective is to maintain a position where as many employees as possible who are currently on EWSS retain their link with their employers, rather than migrate to the pandemic unemployment payment and lose their connection with their employers as a result of going on a payment from the Department of Social Protection. As the restrictions are eased, the EWSS will also play an important role in getting people back to work, thereby reducing the numbers depending on the PUP.
I will mention some of the issues that were raised in this debate on the employment wage subsidy scheme. One was the difficulties relating to mortgages. It was interesting that early in the debate a Sinn Féin Member said there are people on the scheme who perhaps would prefer to go for redundancy after being on the scheme for so many months. A subsequent speaker from the same party said that people on the scheme were having difficulty getting mortgages. That shows the difficulties that arise with this issue. The Government's position recognises the difficulties. A third suggestion was made by Deputy O'Connor, that perhaps there should be an onus on employers to notify all their employees officially if they are claiming the EWSS.
Everybody wants to get support to get mortgage approval, but if people are in a company that has suffered a severe reduction in turnover there might or might not be a question regarding its future viability. I doubt anybody wishes to take on the debt of a large mortgage for the rest of his or her life unless he or she is quite sure he or she will be in a position to pay it when the pandemic has ended. While it is creating short-term difficulties, there could be a worse situation if people are given large mortgages and then find they have severe difficulties with those mortgages as a result of the employer not being in a position to maintain their employment in the long term. There is a balance to be struck here. I understand it is very difficult and it will certainly cause delays in people completing house and property purchases. There is no blanket ban or delay on mortgages. Each case is examined on a case-by-case basis, which is appropriate. All mortgage applications should be examined in that way.
Other Deputies said this is a great scheme, that it should be part of the permanent landscape in Ireland and that it should be worked into short-time working arrangements, as may happen in other countries. Practically every Member welcomed the existence of the scheme, and spoke about its importance and the necessity for the scheme. They welcomed the extensions that are being made. The Minister made it clear that there will be no cliff edge situation with it coming to an abrupt end. People are looking for certainty about what will happen later in the year, but nobody can make any absolutely certain statements on how the Covid-19 pandemic will develop. Ultimately, until we have a vaccine there will be always significant issues.
Other Members mentioned the CRSS, which is not the subject of today's debate. The Department of Enterprise, Trade and Employment is examining a situation to help businesses that were not open to the public, such as the wholesale bottlers that were mentioned in the debate, and to see if some other arrangement can be made. There is a variety of other schemes, and that Department is examining that issue at present. I believe the issue of premises that pay rates will come into that. Businesses that were not open to the public and are suffering due to not being eligible for CRSS might have an opportunity to get into a new scheme.
I am sorry I do not have time to deal with all the issues that were raised. If Deputies wish to get further clarification, they should contact my office directly and I will be happy to get direct replies to them. As I said, more than 20 Members contributed to the debate and I thank them for their generally supportive comments. I am not able to address every query in the time available, but I will be happy to do so one-to-one if Deputies wish to contact me. I commend the order to the House.