Pearse Doherty (Donegal, Sinn Fein)
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68. To ask the Minister for Finance the cost of amending the employment wage subsidy scheme to the end of December 2020, 1 January to 31 March 2021 and 1 April to end of December 2021 (details supplied). [29211/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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The existing cost estimate for the Employment Wage Subsidy Scheme (EWSS) is an additional €2.25 billion. This is comprised of €1.35bn until the end of 2020 and €0.9bn in 2021.

These costs are on the basis that the EWSS will support around 350,000 jobs into the beginning of 2021. Revenue have estimated that 360,000 workers were supported by the Temporary Wage Subsidy Scheme (TWSS) when it concluded at the end of August, so this expected level of coverage of EWSS is considered to be a reasonable assumption.

However, the cost of the EWSS will depend on the overall uptake of the scheme which will become fully apparent after the first claims have been processed in October 2020. I am advised by Revenue that, as of 1 October 2020, there were 37,581 employers registered for the EWSS which is considered a strong level of participation being over 83 per cent of all those who availed of the TWSS over the duration of that scheme.

It is emphasised that these cost projections are subject to review and for every additional 50,000 qualifying employments over the duration of the scheme, the cost is estimated to increase by €0.25 billion.

As the scheme is demand led I have been clear that a significant increase in the number of claims may require a policy review and re-evaluation of the terms of the scheme. This is why the enacting legislation (Financial Provisions (Covid-19) (No. 2) Act 2020) provides that adjustments may be made to certain elements of the scheme. Following monitoring and regular assessments of the EWSS, such adjustments may be made by the Minister for Finance via secondary legislation, having consulted with my colleagues the Minister for Social Protection and the Minister for Public Expenditure and Reform. The specific elements (set out in subsection 21 of the Act) are:

the end date of the measure;

the rate of subsidy and applicable income threshold per employee; and

the turnover test to determine qualifying employers.

The cost estimate for the EWSS as set out above is based on the scheme being implemented in its totality as currently configured.

As the Deputy was previously advised, it is not possible at the present time to provide a reliable estimate of the cost impact of alterations to individual elements of the scheme (such as the rates and qualifying criteria).However, once Revenue has received finalised EWSS returns relating to September, and there is a base to benchmark a cost estimate of the elements suggested by the Deputy, the question may be revisited.

Pearse Doherty (Donegal, Sinn Fein)
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69. To ask the Minister for Finance if the subsidies payable under the employment wage subsidy scheme can be made payable two weeks or one week in arrears, as opposed to one month in arrears as is the case at present; and if he will make a statement on the matter. [29217/20]

Pearse Doherty (Donegal, Sinn Fein)
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70. To ask the Minister for Finance the additional weekly or monthly staffing costs at the Office of the Revenue Commissioner that would result from making subsidies payable under the employment wage subsidy scheme two weeks or one week in arrears, as opposed to one month in arrears as is the case at present. [29218/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 69 and 70 together.

The Employment Wage Subsidy Scheme (EWSS), which has been operating since 1 July has replaced the Temporary Wage Subsidy Scheme (TWSS) which expired on 31 August 2020. The EWSS will remain in place until March 2021, thereby allowing employers to rely on the continuation of support over a longer period of 8 months while also ensuring such support is sustainable and affordable. It should be noted that while the TWSS was essentially an employee based subsidy which had to be passed on to the employees through the normal weekly / fortnightly /monthly payroll runs, the EWSS is an employer subsidy to help support viable firms and employers insofar as is possible.

As set out in the recently enacted Financial Provisions (Covid-19) (No. 2) Act 2020, the EWSS is based on the monthly PAYE/PRSI return to Revenue which is due on the 14th of the month following payment of wages. I am advised by Revenue that the operation of the EWSS is an automated solution, designed to operate at a system level with the monthly PAYE employer returns. The PAYE system is based on the employer reporting payroll runs as they occur. Revenue then posts the monthly return by the fifth day of the following month and the employer has until the 14th of the month to make any corrections to the return. The monthly return is finalised on the 14th .

The EWSS was designed to build on the PAYE monthly system and is a subsidy calculated on the number of qualifying employees. The intention was that Revenue will make the payment into the designated bank account as soon as practicable after that date, typically within 2 days. Thus, for September the intention was that Revenue would start to initiate bank transfers on 16 October.

However, in light of the concerns from some employers on the cash flow impact and acknowledging that this is an extremely challenging time for businesses and employers, on 7 October 2020, Revenue provided an update, by way of public announcement, that it has brought forward the date of payment for EWSS supports to eligible employers. EWSS payments in respect of September payroll submissions, which were due to be made as soon as possible after 14 October, will now be paid into the designated bank accounts of eligible employers by this Friday morning, 9 October.

Revenue also confirmed that all future monthly EWSS payments due to eligible employers will be made as soon as possible after the fifth day of the following month. The accelerated payment date aligns with the availability of the monthly ‘Employer PAYE Return Submission Statement’, which is made available to employers in Revenue’s Online Service, ROS, by the fifth of the following month.

Thus, with this in mind, Revenue further advise that it is extremely important that employers make timely and correct payroll submissions as they will now only have the opportunity to make any necessary corrections before the subsidy is paid instead of up until the payroll return filing date of the 14th of the month.

I welcome Revenue’s supportive approach to businesses by bringing the date of payment forward for EWSS supports to eligible employers during the current crisis which aims to ease any cashflow for those employers concerned. Over 37,900 employers are now registered with Revenue for EWSS. Furthermore, Revenue also confirmed that EWSS payments due in respect of September payroll submissions are currently being processed and it provisionally expects that payments of just under €250 million will be paid to 31,700 employers in respect of 335,000 employees. Additionally, Revenue’s PAYE system will credit monthly employer PRSI liabilities by approximately €60 million to account for the reduced rate of PRSI that applies to wages that are eligible for the EWSS.

It should be recognised that the IT system to support EWSS was developed in close co-operation with the payroll software providers and that any further changes to the operation of the system at this stage, will require significant software developments which could put at risk the smooth operation of the scheme which provides support to these 31,700 employers.

Finally, for these businesses who need further support, or who experience cash-flow difficulties arising for the timing of the subsidy payments, there are a number of options open to them – including State backed loans which may be repaid using EWSS funds as well as grants. Particular attention is drawn to the comprehensive package of business and employer supports that have been made available as part of the July Stimulus Plan - including the Credit Guarantee Scheme, the SBCI Working Capital Scheme, Sustaining Enterprise Fund, and the Covid-19 Business Loans Scheme.