Wednesday, 8 December 2021
Department of Finance
Covid-19 Pandemic Supports
Rose Conway-Walsh (Mayo, Sinn Fein)
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46. To ask the Minister for Finance the safeguards that are in place to ensure that a company experienced a reduction in turnover of 30% and that this reduction was solely caused by Covid-19 in relation to the employment wage subsidy scheme; and if he will make a statement on the matter. [60761/21]
Paschal Donohoe (Dublin Central, Fine Gael)
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The Employment Wage Subsidy Scheme (EWSS) is legislated for under the Financial Provisions (Covid-19) (No. 2) Act 2020, as amended. As an economy-wide support, the EWSS has played a central role in supporting businesses, encouraging employment and helping to maintain the link between employers and employees since July 2020. The EWSS provides a subsidy to qualifying employers, based on the number of qualifying employees on the payroll. To date (2 December 2021), payments of over €5.68 billion and PRSI credit of over €893 million have been granted to 51,700 employers in respect of some 694,600 workers.
The Financial Provisions (Covid-19) (No.2) Act 2020 places the administration of the EWSS under the care and management of Revenue, which includes ensuring that this very significant investment of public funds is properly allocated to eligible employers. In the exercise of this important role, Revenue is, and will be, undertaking assurance checks in relation to the scheme to ensure its conditions have been met.
The eligibility criteria for EWSS are based on self-assessment principles and the legislation provides that an employer must be able to demonstrate that his or her business will experience a 30% reduction in turnover or customer orders between 1 January and 31 December 2021, by reference to the corresponding period in 2019, as a result of business disruption caused by the Covid-19 pandemic.
Revenue, having regard to risk indicators, may examine closely the evidence/basis for entering the scheme of certain EWSS applications.
If a reduction in customer orders is being considered as the basis for eligibility for the scheme, the following are examples of how it will apply –
- In the case of a retail business, a pub, a fast-food outlet and similar type businesses, at least a 30% reduction in the value of overall sales (cash, credit and orders, including on-line and telephone orders).
- In the case of a businesses which operates largely by way of “bookings” such as a restaurant, hotel, B&B, hostel, camp site, caravan park: at least a 30% reduction in the value of bookings for the relevant period.
- In the case of public and private transport service providers: at least a 30% reduction in the volume of online bookings for passenger journeys or a 30% reduction in the number of passenger journeys or a 30% reduction in the value of passenger ticket sales.
Further details on the EWSS eligibility criteria are contained in guidelines published on the Revenue website at www.revenue.ie/en/employing-people/documents/ewss/guidelines-on-eligibility-for-ewss.pdf.
It has been a key requirement of the EWSS since its introduction that employers undertake a review of their trading situation on the last day of every month to ensure they continue to meet the scheme’s eligibility criteria. This became more important as more ‘normal’ trading activities resumed across many sectors of the economy from mid-2021. In that context, the EWSS Eligibility Review Form (ERF) was developed to assist employers in conducting the required monthly review of their continuing eligibility for the scheme, thereby eliminating potential overpayments. This has acted as an effective deterrent since the introduction of the control from 1 July 2021.
To address the Deputy’s specific question regarding the safeguards that are in place to ensure that a business experienced a reduction in turnover of 30% and that this reduction was solely caused by Covid-19, in most instances, it will be very clear from the nature of the EWSS applicant’s trade how such a reduction in turnover has come about. However, in parallel with self-assessment principles, Revenue has also been conducting a range of compliance checks to ensure that employers satisfy all the conditions for the EWSS.
Underpinning these compliance checks is the use of data analytics to interrogate data on Revenue’s systems, identifying employers who may not meet the eligibility criteria, and undertaking an intervention in accordance with the Code of Practice for Revenue Audit and Other Compliance Interventions. Pre-emptive analysis using ERF data and other sources of returned data is actively being used and showing to be effective in improving Revenue’s ability to identify and better target EWSS fraud risk In most instances, agreement is reached and EWSS overpaid is recouped or the liability is ‘warehoused’. Where issues are identified and agreement is not reached, Revenue will raise an EWSS notice of assessment and employers have the option to submit an appeal to the Tax Appeals Commission (TAC) within 30 days of the assessment. There are currently 56 assessments raised in the amount of about € 4.8m of which 4 have been appealed in the amount of almost €1.1m.
I am advised that 3,363 interventions have been finalised on 3,087 employers yielding in excess of €13.6m which equates to 0.2% of EWSS claimed to date. A further 2,020 checks are ongoing on an additional 2,005 employers meaning almost 10% of employers who have claimed to date have had an intervention reviewing their compliance with the scheme.
The EWSS legislation also provides for anti-abuse measures which also feature as part of Revenue’s overall compliance programme. These anti-abuse measures provide that where a Revenue officer determines that it is reasonable to conclude that an employer, at any time over the term of the EWSS, has attempted to manipulate normal payroll runs and normal payment of wages with a view to securing that a wage subsidy amount, or an increased wage subsidy amount, is paid in relation to an employee, the employer concerned will be deemed never to have been an eligible employer for the EWSS and will be required to repay wage subsidies and PRSI credit received, and may also face the imposition of interest, penalties and potential prosecution.
I am satisfied that Revenue is rigorous in its structured programme of checks to ensure the eligibility of businesses for subsidy payments under EWSS and will pursue any instances where a business fails to qualify for the scheme for whatever reason. However, if the Deputy has a particular employer or instance in mind where she believes a business may have received EWSS payments to which they were not entitled to, she should contact Revenue directly in relation to the matter.