Cian O'Callaghan (Dublin Bay North, Social Democrats)
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301. To ask the Minister for Finance the reason for reducing the temporary wage subsidy scheme to €203 from 17 September 2020; if employees will be better off on pandemic unemployment payment if their employers were without the resources to top-up; if projections have been calculated as to the number of businesses that will be negatively affected or may close as a result; and if he will make a statement on the matter. [20449/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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It is assumed that the Deputy is referring to the Employment Wage Subsidy Scheme (EWSS) top rate of €203 which will come into effect from 1 September in the case of employers who previously availed of the Temporary Wage Subsidy Scheme (TWSS) which will cease at the end of August.

The TWSS was introduced on 26 March to support firm viability and preserve the relationship between the employer and employee insofar as is possible by subsidising a portion of the employer wage bill in circumstances where the employer’s business has been negatively impacted by the restrictions that have had to be introduced to stop the spread of the COVID-19 virus.

When originally announced, it was expected that this measure would be in place for 12 weeks until mid-June but recognising the novel circumstances surrounding the re-opening of the economy as well as the need to avoid the risk of forcing otherwise viable firms to close, the Government agreed that the TWSS would remain until the end of August. 

Many of the strictest public health restrictions on the economy have been eased so it is appropriate that the level of State subsidy be moderated, while also recognising that economic outputs are unlikely to return to normal for many businesses for much of the rest of 2020 because of the continued need to observe some requirements such as social distancing. 

Looking forward, the EWSS is an economy-wide scheme that will focus primarily on business eligibility, delivering a per-head subsidy on a flat rate basis.  This adaption from the TWSS will allow employers to rely on the continuation of support over a longer period of 8 months while also ensuring such support is sustainable and affordable.

I would also highlight that the level of support being provided under the EWSS includes not only the subsidy amount itself but also the reduced Employers PRSI element which is also significant.  

Further, the position in relation to the EWSS does not affect any legal obligations that the employer may have to their employee as regards any terms, conditions or entitlements of their employment, including pay. It is based on the number of employees on the payroll and the employer is expected to make best efforts to maintain as close to 100% of normal income as possible for the duration of the subsidy period. As the economy continues to reopen, the capacity of businesses should also increase so that they can increasingly rely on their own resources to cover extra hours worked.

The key focus of this very substantial scheme is on supporting and helping to sustain businesses rather than on contemplating their closure.