Written answers

Wednesday, 27 May 2020

Department of Foreign Affairs and Trade

Covid-19 Pandemic Supports

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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55. To ask the Minister for Finance if he will address a matter raised in correspondence (details supplied) relating to the temporary wage subsidy scheme; and if he will make a statement on the matter. [7328/20]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The Deputy will be aware that the Temporary Wage Subsidy Scheme (TWSS) was legislated for in section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020 and that the TWSS is an emergency measure to deal with the impact of the Covid-19 pandemic on the economy. Of necessity, the underlying legislation and the scheme itself were developed quickly, having regard to the Government objective of getting assistance to employers and employees, where businesses have been seriously affected by the pandemic and the necessary restrictions introduced in response to this Public Health emergency.

The TWSS builds on data returned to Revenue through its real-time PAYE system. It must be accepted that the underlying legislation and the scheme itself cannot be tailored to meet every individual unique set of circumstances for either employers or employees. A key element of the eligibility is that the employees were on the payroll at 29 February 2020. This requirement together with the other eligibility requirements for the TWSS were particularly designed as safeguards against abuse of the scheme.

Accordingly, the TWSS can only operate in respect of an employee, whether full-time or part-time, who was on the payroll of the relevant employer as at 29 February 2020. Craft Apprentices alternate between ‘on-the-job’ training with an employer and ‘off-the-job training’ in an education centre. The employer pays the Apprentice while she/he is being trained ‘on-the-job’ and a training allowance is paid through the Education Shared Business Services Unit of the Department of Education and Skills while the Apprentice is attending ‘off-the-job’ training.

Eligible employers can participate in the scheme in respect of any eligible Apprentice who was on the payroll at 29 February 2020. Apprentices who were not on the payroll of the employer at 29 February 2020 are not eligible employees for the purposes of the TWSS. Furthermore, the wage subsidy per employee is calculated based on the net pay reported by the employer for January and February 2020. The scheme does not distinguish between periods in ‘off-the-job’ training where the Apprentice was not in receipt of a wage from the employer and was not therefore reported on the payroll of the employer and so from an operational standpoint the employer would have no basis period on which to base the wage subsidy. Accordingly, the TWSS can only operate in respect of an Apprentice, who is on the payroll of the employer as at 29 February 2020.

The question of an individual’s entitlements in an employment context following his or her resumption of duty after a period of training, and the question of what wage amount an employer may or may not be in a position to pay such an Apprentice in the light of the impact of the Covid-19 pandemic on the employer’s business, are matters that are outside the remit of the TWSS. Those employees who are laid off following such a resumption of duty would be entitled to claim the Pandemic Unemployment Payment from the Department of Employment Affairs and Social Protection.

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry, Independent)
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57. To ask the Minister for Finance his views on whether finance packages are needed for businesses (details supplied); and if he will make a statement on the matter. [7346/20]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The Deputy suggests extending the Temporary Wage Subsidy Scheme (TWSS) to a particular business sector.

The TWSS is provided for in section 28 of the recently enacted Emergency Measures in the Public Interest (Covid-19) Act 2020 (The Act). The underlying legislation and the scheme itself were developed having regard to the Government objective of providing assistance to employers and employees, where businesses have been seriously affected by the Covid 19 pandemic and the restrictions which were introduced as a result. The scheme is available to eligible employers across all sectors, excluding the Public Service and Non-Commercial Semi-State Sector. This includes businesses that have closed due to the Covid-19 restrictions and those that continue to operate and employ their workforce. The sector to which the Deputy refers is no different in this regard.

The Government’s priority in so far as the TWSS is concerned was and is to ensure that all employers experiencing significant negative economic disruption from COVID-19 can register for and start to receive payment quickly. The objective of the scheme is to ensure that the relationship between employers and employees is maintained to the greatest extent possible so that businesses can restart operations quickly once the crisis has passed.

A key eligibility criterion for the scheme requires that where a business is experiencing a significant negative economic disruption due to the Covid-19 pandemic, the employer must make a declaration which states that, based on reasonable projections, as a result of disruption to the business caused (or to be caused) by the Covid-19 pandemic, there will be a decline of at least 25% in the future turnover of, or customer orders for, the business for the duration of the pandemic; and that as a result the employer cannot pay normal wages and outgoings fully, but nonetheless wants to retain its employees on the payroll.

An employer that has been hit by a significant decline in business but has strong cash reserves, which are not required to fund debt, may still qualify for the scheme, but the Government would expect such an employer to continue to pay some element of employees’ wages. Thus, where a business has been forced to close due to public health requirements resulting in future turnover declining by at least 25%, it is expected that such an employer would be eligible for the TWSS.

The Deputy may also wish to note that, outside of the TWSS, there is a wide range of financial supports and guidance available to help businesses impacted by the COVID-19 crisis. Details are available at the following link:

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