Kathleen Funchion (Carlow-Kilkenny, Sinn Fein)
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284. To ask the Minister for Finance if his Department has considered extending the employment wage subsidy scheme to the owners of private childcare crèches; and if he will make a statement on the matter. [37992/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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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, positions 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 the 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 €3.8 billion and PRSI credit of over €627 million have been granted to 50,500 employers in respect of 609,700 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 early last month, it has been decided that the scheme is now to be extended until the end of December 2021. 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%.

While the Government has agreed that the EWSS should be extended to end Q4 2021, it is 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.

Similarly, no decisions have been taken in relation to future of the scheme beyond the end of 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. The precise manner in which such a change might be implemented is a matter to be considered.

The Deputy’s question refers to extending the EWSS to owners of private childcare crèches.   However, it is unclear what the Deputy might be specifically referring to.  As outlined above, all qualifying employers are entitled to claim the EWSS and in the case of the childcare sector, childcare businesses in possession of tax clearance and registered in accordance with Section 58C of the Childcare Act 1991 are eligible for the EWSS, in respect of the eligible employees on their payroll.

In the event that the Deputy is referring to sole traders who run private childcare crèches, it should be noted that the EWSS provides a flat-rate subsidy to qualifying employers based on the number of qualifying employees on the payroll. Subject to meeting the requisite conditions, a sole-trader’s business may be a qualifying employer for the purpose of the scheme, the same as is the case for any other employer. As was the case under the Temporary Wage Subsidy Scheme (TWSS), sole-traders are not able to claim the EWSS in respect of their own employment as they are not employees – and further, may not necessarily be paid via the payroll system unlike proprietary directors who are obliged to have PAYE operated on any payments made to them personally.

The EWSS is a significant economy wide support for employers, but it is not the only measure that the Government have put in place to support businesses at this time.

There are a range of other business support measures available. 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 last 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.