Gary Gannon (Dublin Central, Social Democrats)
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353. To ask the Minister for Finance if his attention has been drawn to employees and employers being impacted by the temporary wage subsidy scheme (details supplied); and if he will make a statement on the matter. [20531/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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The legislation underpinning the Temporary Wage Subsidy Scheme (TWSS) is contained in Section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020. Of necessity, the legislation and the scheme itself were developed very quickly to support the urgent Government objective of getting much needed assistance to employers and employees that have been seriously affected by the pandemic.

The amount of subsidy payable to eligible employees is based on their ‘average revenue net weekly pay’ (ARNWP) for January and February 2020, as returned by the employer to Revenue through the real-time PAYE system. The ARNWP calculation is based on the number of insurable weeks within the January/February period.

On 15 April 2020 I announced a number of changes to the TWSS to ensure further support for workers on lower incomes and to allow employers to pay a higher level of top-up. These changes mean that more employees now receive a subsidy of €350 per week.

Section 2 of the Financial Provisions (Covid-19) (No. 2) Bill 2020 makes provision for the introduction of the Employment Wage Subsidy Scheme (EWSS) which will ultimately replace the TWSS. Both schemes will run in parallel from 31 July 2020 until the TWSS ceases at the end of August 2020. Employers who have already availed of the TWSS may make an additional claim for non-TWSS employees in the EWSS from 31 July. This is to provide additional flexibility in circumstances where employees were not previously eligible to be paid via TWSS, such as new hires and seasonal workers. If applicable, some claims may be backdated for employees who have been paid from 1 July 2020.

As with the TWSS, the purpose of the EWSS is to maintain the link between the employee and employer insofar as is possible. It is therefore 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.

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 adaptation 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.

The primary qualifying criteria is that the employer must be able to demonstrate that they are operating at no more than 70% turnover from July to December 2020 compared with the same period in 2019.

The level of subsidy the employer will receive is per paid employee:

- For every employee paid more than €203 gross per week, the level of subsidy is €203

- For every employee paid between €151.50 and €202.99 gross per week, the subsidy is €151.50

- A nil subsidy is payable for employees paid less than €151.50 or more than €1,462 gross per week.

A 0.5% rate of employers PRSI will continue to apply for employments that are eligible for the subsidy. This represents a considerable saving for the employer in addition to the flat rate values above (up to 11.05% of the full wage paid).

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. 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.