Seanad debates

Thursday, 1 October 2020

Nithe i dtosach suíonna - Commencement Matters

Covid-19 Pandemic Supports

10:30 am

Photo of John CumminsJohn Cummins (Fine Gael) | Oireachtas source

I welcome the Minister of State to the Chamber. The Covid-19 crisis has had a devastating effect on many thousands of companies and employees throughout the State. To assist with the dramatic fall-off in revenue, the previous Government approved the introduction of the temporary wage subsidy scheme, TWSS, which has had a hugely positive impact in keeping employees linked with their companies and providing much needed cash flow support for companies to enable them to continue to trade through what has been, and continues to be, an exceptionally difficult time. Since its introduction, more than 65,000 firms have availed of the TWSS. That amounts to almost one third of all employers, according to the 2019 figures. More than 660,000 jobs have been directly supported over the period, with a value of payments made to date in excess of €2.8 billion.

On 1 September, the TWSS was replaced by the employment wage subsidy scheme, EWSS, with payments being made at two flat rates of €203 and €151.50 per employee, depending on gross weekly pay. No subsidy is paid for employees earning below €151.50, which I will deal with presently. One of the main advantages of the EWSS over its predecessor is that it is open to new employees. Under the TWSS, companies that had to hire additional staff to meet requirements of social distancing and enhanced cleaning rotas did not have access to support. I acknowledge this change, which certainly is a huge step in the right direction.

However, unlike its predecessor, under which payments were made promptly within the week in which the claim was submitted to Revenue, the EWSS is paid on a monthly basis. This is having a negative effect on the cash flow of SMEs throughout the country because it can take between four to six weeks to get a refund of moneys owed under the scheme. In my own county of Waterford, I recently met representatives of Dungarvan and West Waterford Chamber of Commerce and local publicans who expressed to me in the strongest terms possible that the changes are having a detrimental impact on cash flow and resulting in the forced closures of some businesses and the early laying off of seasonal staff in others. Many businesses, particularly in the tourism and hospitality sector, are operating with a reduced capacity and a reduced turnover but the same outgoings. The lifeline offered by the EWSS is critical but if refunds are only being paid on a four to six-week basis, then one must question whether the scheme is having the desired effect of assisting with the cash flow of businesses.As the Minister of State is aware, many people in that sector are paid on a weekly basis and businesses are being put on the back foot due to delays in payments. This matter needs to be addressed urgently. To put it plainly, if it was not broken, why did Revenue and the Department try to fix it?

On the employees who are below the €151.50 threshold, and the fact that no flat-rate subsidy is available to them, these are employees who are perhaps students who are availing of weekend work in small companies. Those companies that are giving the students the bit of work are effectively being penalised because they are not reaching the €151.50 threshold. Perhaps the Minister of State could take on board the possibility of introducing a third subsidy at a lower rate of €75 to assist in those companies which only have employees on that rate.

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