Jennifer Whitmore (Wicklow, Social Democrats)
Link to this: Individually | In context | Oireachtas source

60. To ask the Minister for Finance if a viability test will be applied to all childcare providers seeking Covid-19-related employment wage supports until the end of 2021; and if he will make a statement on the matter. [28455/21]

Brendan Griffin (Kerry, Fine Gael)
Link to this: Individually | In context | Oireachtas source

338. To ask the Minister for Finance if the employment wage subsidy scheme will continue to be made available to childcare providers without the income reduction requirements; and if he will make a statement on the matter. [30770/21]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 60 and 338 together.

Section 28B of the Emergency Measures in the Public Interest (Covid-19) Act 2020 provides for the operation of the Employment Wage Subsidy Scheme (EWSS), which is an economy-wide enterprise support for eligible businesses in respect of eligible employees. It provides a flat-rate subsidy to qualifying employers based on the numbers of paid and eligible employees on the employer’s payroll and charges a reduced rate of employer PRSI of 0.5% on wages paid which are eligible for the subsidy payment.

While the criteria for eligibility for business in general is based on a reduction in turnover, as a result of the pandemic and having regard to the importance of maintaining the provision of childcare facilities so as to enable parents to continue in, or to take up, position of employment, the legislation provided that childcare businesses in possession of tax clearance and registered in accordance with Section 58C of the Childcare Act 1991 are eligible for the EWSS.

The objective of scheme is to support all employment and maintain the link between the employer and employee insofar as is possible. The EWSS has been a key component of the Government’s response to the continued Covid-19 crisis to support viable firms and encourage employment in the midst of these very challenging times. To date, payments of over €3.4 billion and PRSI credit of over €565 million have been granted to 49,800 employers in respect of 579,400 workers.

I have been clear that there will be no cliff-edge to the EWSS and, as the Deputy will be aware from announcements made on Tuesday 1st June, it has been decided that the scheme is now to be extended until the end of December 2021.

With the agreement by Government on the revised plan, COVID-19 Resilience and Recovery 2021: The Path Ahead, a cautious and measured approach will be taken as we lay the foundations for the full recovery of social life, public services and the economy. It is therefore appropriate that key business supports should remain in place until the end of December 2021.

As the revised plan is implemented, the EWSS will play an important role in getting people back to work as public health restrictions are eased, thereby reducing the numbers dependent on social welfare payments over time, including the Pandemic Unemployment Payment (PUP).

For Q3 2021, the Government has decided to broadly maintain the status quo for EWSS, including the enhanced rates of support, with a modification to widen eligibility, and maintaining the reduced rate of Employers’ PRSI of 0.5%. There are no changes in respect of the qualification criteria for EWSS eligibility for the childcare sector.

The Government has approved the extension of the EWSS for Q4 2021, however, it is considered too early as yet to prescribe the precise operational parameters of the scheme that should apply for that quarter. Decisions in that regard will be taken closer to the time, possibly around the end of August/early September, with the benefit of more up-to-date information on a number of variables, including the overall epidemiological situation, progress made in reopening all sectors of the economy, the vaccine efficacy, as well as the operation of the EWSS during the early parts of Q3. As such, no decisions have yet been taken on any changes to the scheme for Q4 2021.

It is important that, as the recovery gains further momentum, supports are further recalibrated in the longer-term interests of businesses that are in receipt of those supports and in the interests of the wider body of taxpayers. As such and as already signalled, for Q4, consideration will be given to a future change to EWSS which will require an employer contribution towards employee wages. This possible change is being signalled now to provide sufficient notice to businesses in respect of same. Such a move, if it were to be introduced, could have the effect of testing the viability of businesses to the extent that they would be required to make a contribution against the background of a reduced overall subsidy from the State under the EWSS. As with all firms that will benefit from the scheme in the months ahead, businesses in the childcare sector would be subject to the impact of this potential change.

Finally, for those businesses who may need additional support during this period, I would draw attention to the comprehensive package of other business and employer supports that have been made available since the July Stimulus Plan and Budget 2021 - including the Covid Restriction Support Scheme (CRSS) which has been extended, the Credit Guarantee Scheme, the SBCI Working Capital Scheme, Sustaining Enterprise Fund, and the Covid-19 Business Loans Scheme. I also announced on 1st June a new additional business support scheme (Business Resumption Support Scheme or BRSS) for businesses with reduced turnover as a result of public health restrictions to be implemented in September 2021.

The Government remains fully committed to supporting businesses and employers insofar as is possible at this time.