Written answers

Wednesday, 19 January 2022

Department of Finance

Covid-19 Pandemic Supports

Photo of Gerald NashGerald Nash (Louth, Labour)
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320. To ask the Minister for Finance the number of companies registered under the employment wage subsidy scheme that have been subjected to audit under the compliance programme of the Revenue Commissioners to 31 December, 2021; the amount that has been clawed back as a consequence of the programme as a result of initiated contact by the Revenue Commissioners and as a result of voluntary amendments made by companies liable to repay subsidies; the amount outstanding; and if he will make a statement on the matter. [1192/22]

Photo of Gerald NashGerald Nash (Louth, Labour)
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322. To ask the Minister for Finance the number of companies that were eligible for the employment wage subsidy scheme that have voluntarily returned funding paid out under the scheme up to 31 December 2021; the number of companies that have paid back the full amount they received over the period of their use of the scheme; if the Revenue Commissioners will provide the names of the companies that have done so to date; and if he will make a statement on the matter. [1194/22]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 320 and 322 together.

Section 28B of the Emergency Measures in the Public Interest (Covid-19) Act 2020 provides for the Employment Wage Subsidy Scheme (EWSS) which is an economy-wide enterprise support for eligible businesses in respect of eligible employees.

As the Deputy will be aware, eligibility to EWSS is based on the employer demonstrating that its business is likely to experience a 30% reduction in turnover or orders during a specific reference period and that this disruption to business is caused by the Covid-19 pandemic.   In addition, the business must also have tax clearance.  

Since the introduction of the scheme, each employer availing of the scheme must carry out a self-review of its business circumstances at the end of each month and if it is manifest to the employer that it no longer meets the eligibility test for qualification for the scheme, then the employer must immediately cease claiming wage subsidy payments.   For July to December 2021, employers provide to Revenue details of this eligibility review on a monthly Eligibility Review Form (ERF), filed through ROS.

Revenue’s administration of the scheme is on a self-assessment basis, with employers claiming the subsidy through their payroll submission, by including a marker on payslips where the subsidy is being claimed. If employers subsequently determine they are not eligible, or they wish to voluntarily remove themselves from the scheme, they can do so by removing the marker from the submissions and repaying the subsidies claimed, without contacting Revenue.

I am advised by Revenue that it undertakes a multi-faceted approach to compliance checks to safeguard the integrity of the EWSS.   This includes real time risk-based checking of submissions and cross-referencing claim data against other Revenue data sources to identify anomalies or trends requiring attention.  The real time checking procedures are supported by engagement with employers, to facilitate timely resolution of issues, and to ensure employers claim the correct EWSS entitlement, or cease claiming where they no longer have an entitlement.  

I am further advised that Revenue is also carrying out a risk-focused follow-up program of compliance interventions.  In most instances, agreement is reached and any EWSS overpaid is recouped or the liability is warehoused under the Debt Warehouse Scheme.   Where issues are identified and agreement is not reached, Revenue will raise a notice of assessment which is collectible in the same manner as any outstanding tax. Employers have the right to submit an appeal to the Tax Appeals Commission (TAC) within 30 days of the assessment.   There are currently 60 assessments raised for the amount of €5.1 million of which 4 have been appealed for the amount of €1million.   

Revenue have audited 212 registered companies under the EWSS via their compliance programme to 31 December 2021.  Revenue have advised that 77 of these audits have been finalised, yielding almost €1.5 million and 135 are ongoing.  An additional 5,594 registered employers have been subject to a compliance check under the compliance programme to 31 December 2021. Overall, Revenue has finalised EWSS related interventions with 3,500 employers, recouping €19.2 million, which equates to 0.3% of the total subsidy paid. There are further compliance checks with 2,306 employers ongoing, which will be finalised in due course. 

Finally, I am advised by Revenue that since the scheme commenced, a total of 16 employers advised Revenue they were voluntarily removing themselves from the scheme, 9 of whom withdrew and fully repaid nearly €21 million and 7 withdrew and partially repaid just over €4.5 million.   A total of 402 employers have repaid in full all subsidies claimed, totalling approximately €52 million with an additional 3,331 making partial repayments totalling approximately €54 million.  This figure includes employers who deemed themselves ineligible as part of the monthly eligibility review process and repaid subsidy monies in line with the scheme requirements. Employers were not required to indicate the reason for a repayment, therefore Revenue is not in a position to provide a breakdown between those employers who repaid due to ineligibility, arising from employer self-assessment or a compliance check and those who voluntarily repaid.

Due to taxpayer confidentiality as enshrined in Section  851A of the Taxes Consolidation Act 1997, Revenue are not in a position to provide the names of employers who have paid back subsidy payments.   

Photo of Gerald NashGerald Nash (Louth, Labour)
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321. To ask the Minister for Finance the number of firms that have benefitted from the temporary wage subsidy scheme that were found to have not met the requirements for eligibility for the scheme; the amount that has been returned as a result; the amount outstanding in terms of repayments as of 31 December 2021; and if he will make a statement on the matter. [1193/22]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The Temporary Wage Subsidy Scheme (TWSS), which closed on 31 August 2020 and was replaced by the Employment Wage Subsidy Scheme (EWSS) from 1 September 2020, provided financial support to approximately 67,500 employers in respect of 689,000 employees. The total cost of the scheme was c.  €2.9 billion.

As part of the administration of the TWSS, Revenue carried out a programme of compliance checks on all employers who participated in the scheme to ensure that they were eligible to receive the supports and to ensure the funds were paid out to qualifying employees. Revenue have advised that 99.8% of these checks have been completed, with 153 cases ongoing. To date, Revenue has recouped over €31.5 million in overpayments from 1,786 participating employers, which represents around 2.7 %. 

In addition, Revenue also completed a TWSS reconciliation scheme which identified an aggregate liability of €308 million, the majority of which related to the transitional period of the scheme, operated up to 5 May 2020, when €410 per week was paid to employers in respect of eligible employees. Therefore, when the compliance and reconciliation exercises are combined the aggregate amount of TWSS identified for recovery amounted to €324 million. To date, €256 million of this amount has been repaid to Revenue and €58 million is included in the tax debt warehouse.   This leaves a balance of €10 million, of which €3 million is subject to appeal, and the remaining €7 million is in the process of being collected.

Photo of Gerald NashGerald Nash (Louth, Labour)
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323. To ask the Minister for Finance if he will request that the Revenue Commissioners undertake an examination of all companies that have benefitted from both the temporary wage subsidy scheme and the employment wage subsidy scheme to establish the extent to which relevant companies have paid out dividends to shareholders while benefitting from Covid-19 related wage subsidies; and if he will make a statement on the matter. [1195/22]

Photo of Gerald NashGerald Nash (Louth, Labour)
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324. To ask the Minister for Finance if he plans to introduce new conditions on firms in relation to the use of and access to the employment wage subsidy scheme; his views on the fact that some companies have paid dividends to shareholders in the same financial year in which they have accessed State wage subsidies; and if he will make a statement on the matter. [1196/22]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 323 and 324 together.

The Temporary Wage Subsidy Scheme (TWSS), which was provided for in section 28 of the Emergency Measures in the Public Interest (COVID-19) Act 2020, expired on 31 August 2020.  The TWSS has been replaced by the Employment Wage Subsidy Scheme (EWSS) which is provided for in section 28B of the Emergency Measures in the Public Interest (COVID-19) Act 2020, as amended. The EWSS remains in operation until 30 April 2022.

The key eligibility criteria for the TWSS were that the business was suffering significant negative economic impact due to the pandemic, the employees were on the payroll at 29 February 2020, and the employer had fulfilled its PAYE reporting obligations for February 2020 before 1 April 2020, at the latest.

As regards eligibility for the EWSS, an employer must be able to demonstrate that its business has experienced a 30% reduction in turnover or 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. Furthermore, the employer must have a tax clearance certificate to be eligible to join the EWSS and must continue to meet the requirements for tax clearance throughout the scheme.  Where an eligible employer makes a payment of wages, within prescribed limits, to a qualifying employee during the scheme, the employer can claim an EWSS subsidy in respect of that employee.

As I have said previously, the primary purpose of the COVID wage subsidy schemes is to ensure, as much as possible, that employers keep employees in employment, thereby maintaining the employer/employee relationship, so that normal operations can quickly restart once the restrictions are lifted, rather than making them redundant and eligible for the Pandemic Unemployment Payment (PUP). These emergency support schemes were developed to deal with a situation where businesses were restricted from trading due to public health guidelines and not because of any economic or other trading conditions. It was considered that the best metric to determine the impact of the public health restrictions was a decline in turnover. At the outset of the restrictions nobody could anticipate how long or what impact the restrictions would have or how businesses or customers would react.  Qualification for TWSS, and subsequently EWSS, was based on projections of the business.

The legislation enacted by the Oireachtas places the administration of the subsidy schemes under the care and management of Revenue, which includes ensuring that this very significant investment of public funds is properly allocated to eligible employers and businesses in line with the legislation enacted by the Oireachtas.

The eligibility criteria for the wage subsidy schemes, as provided for in legislation, do not include any conditions related to the payment by a company of a dividend or dividends to its shareholders. Thus, there is no impediment to employers paying dividends to its shareholders and this is a business decision for a company to take based on its financial circumstances.

The Office of the Revenue Commissioners is statutorily independent in how it conducts its activities so it would not be appropriate for me to request Revenue to conduct an examination of companies who have paid out dividends, while also receiving State supports.  In any event, the fact that the legislation does not prohibit the practice would seem to make such an examination inappropriate.

As regards the Deputy’s second question on whether I propose to introduce new conditions on employers in relation to the use of and access to the EWSS, it should be noted that the overwhelming majority of companies that have participated in the wage subsidy schemes did so because they genuinely believed they would need support at that point based on the effect of the pandemic on their business. The experience both Revenue and I have had is that employers participating in the scheme are doing so in good faith.

I would also note that the schemes are characterised by a high degree of compliance by beneficiary firms. I set out details of the comprehensive compliance and assurance programmes carried out by Revenue in relation to the wage subsidy schemes separately in response to other questions raised by the Deputy. 

I am advised that a number of companies have returned the TWSS or EWSS payments to Revenue either because they voluntarily withdrew from either scheme, found they were ineligible or their business performance was better than they expected when they entered the schemes.  In that regard 860 employers have refunded €10.9 million in TWSS payments.  In addition, 16 employers advised Revenue they were voluntarily removing themselves from the EWSS, 9 of whom fully withdrew and repaid nearly €21 million and 7 partially withdrew and repaid just over €4.5 million.

A total of 402 employers have repaid in full all subsidies claimed since the EWSS began, totalling approximately €52 million with an additional 3,331 making partial repayments totalling approximately €54 million.

To date, the EWSS has helped almost 52,000 employers to keep over 700,000 employees in employment since the scheme began in September 2020.  It is highly likely that the vast majority of employers who have claimed COVID-19 wage supports have not had the wherewithal to pay dividends during the period of the pandemic.  It is not readily apparent to me what impact an outright ban on dividend payments, or indeed a cap on such payments, would have had on the employment prospects of those 700,000 employees whose employers have been supported by EWSS payments.

However, I have said previously that I will keep this matter under review and assess if it would be appropriate to introduce any further conditionality into the scheme. This issue requires careful consideration to ensure that businesses that may well be profitable, but are far less profitable than they were in the past, are not precluded from participating in the scheme in the future. Such firms may still require this support to have a viable and successful future. It would be important that any changes are proportionate and would not undermine the overarching policy rationale underpinning the scheme, which is to maintain employment.

Photo of James BrowneJames Browne (Wexford, Fianna Fail)
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325. To ask the Minister for Finance the position regarding the inability by a company (details supplied) to secure Covid restrictions support scheme support owing to loss of earnings; and if he will make a statement on the matter. [1222/22]

Photo of John BradyJohn Brady (Wicklow, Sinn Fein)
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352. To ask the Minister for Finance if further changes will be made to the Covid restrictions support scheme to include new businesses which have been set up in the past three to six months that have been impacted by the recent public health restrictions; and if he will make a statement on the matter. [2106/22]

Photo of Michael LowryMichael Lowry (Tipperary, Independent)
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354. To ask the Minister for Finance his plans to introduce a modified Covid restrictions support scheme for retail businesses that anticipate that their income will be subjected to a substantial loss in the first quarter of 2022 due to the ongoing Covid-19 pandemic; if such a modified scheme will be examined for retail businesses that can provide evidence that their income is down 30% or more at the start of 2022 compared to their last full year of trading accounts pre-pandemic; and if he will make a statement on the matter. [2169/22]

Photo of Brendan GriffinBrendan Griffin (Kerry, Fine Gael)
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356. To ask the Minister for Finance if he will introduce a 10% turnover grant for new and existing businesses that had reduced opening hours due to public health restrictions and will not meet turnover requirements to qualify for the Covid restrictions support scheme; and if he will make a statement on the matter. [2271/22]

Photo of Neale RichmondNeale Richmond (Dublin Rathdown, Fine Gael)
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359. To ask the Minister for Finance if he will consider extending the eligibility for the Covid restrictions support scheme to businesses that began trading after 26 July 2021; and if he will make a statement on the matter. [2293/22]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 325, 352, 354, 356 and 359 together.

Covid Restrictions Support Scheme (CRSS) was introduced by Section 11 of the Finance Act 2020. The scheme is a targeted support for businesses significantly impacted by restrictions introduced by the Government under public health regulations to combat the effects of the COVID-19 pandemic.

The scheme is available to companies, self-employed individuals and partnerships who carry on a trade or trading activities, the profits of which are chargeable to tax under Case 1 of Schedule D, from a business premises that is subject to restrictions that prohibit or considerably restrict customer access.

From 20 December 2021, the Government introduced certain restrictive measures for businesses within the hospitality and indoor entertainment sectors. As part of these measures, an 8pm closing time has been imposed from 20 December 2021 to 31 January 2022. Businesses operating within these sectors, who would ordinarily operate evening and night-time trading hours, will be considered to be significantly restricted from operating for the purposes of the CRSS and will be eligible for support under the scheme where they meet the eligibility conditions.  The Government have also agreed that the turnover reduction criteria will be increased from no more that 25% of 2019 turnover to no more that 40% of 2019 turnover.

It is not sufficient that the trade of a business has been impacted because of a reduction in customer demand as a consequence of Covid-19, or by public health guidance generally in force. The scheme only applies where, as a direct result of the specific terms of the Government restrictions, the business is required to either prohibit or significantly restrict access to its business premises.

To qualify for the CRSS, a business must have tax clearance and have been established prior to 26 July 2021. Any business established after 26 July 2021 is not eligible for the scheme. Revenue has advised me that the business referred to in question (1222/21) was established in September 2021 and, as such, does not qualify for the CRSS.

Under the existing scheme any business established after 12 October 2020 was not eligible for CRSS. The Government have decided that new businesses established between 13 October 2020 and 26 July 2021 will now be eligible to apply for the scheme.   In addition to the amendment of the turnover criteria, this is a significant extension of the CRSS. The CRSS is intended as a support for existing businesses and I have no plans to further modify the eligibility criteria of the CRSS.

The legislation provides businesses with the entitlement to appeal Revenue’s decision on CRSS eligibility to the independent Tax Appeals Commission (TAC), where they dispute the interpretation applied.  If a business wishes to appeal Revenue’s decision that it is not entitled to the CRSS, it should do so within 30 days of the refusal notification.

The CRSS is just one of the Government supports to assist businesses impacted by COVID-19. Businesses not falling within the scope of the CRSS may be entitled to support under other measures put in place by Government, including the COVID Pandemic Unemployment Payment (PUP) and the Employment Wage Subsidy Scheme (EWSS). EWSS is an economy-wide scheme that operates across all sectors.  As the Deputy may be aware, as announced on 9 December, it was decided that the enhanced rates of support which were due to end on 30 November 2021 would be extended for a further two months until end-January 2022. On 21 December, it was decided on foot of the restrictions I have outlined above, that the EWSS would reopen for certain businesses who would otherwise not be eligible for the support. Businesses that previously registered for EWSS and received a payment in compliance with the scheme have the opportunity to re-qualify for the scheme where they meet certain conditions. Broadly, the business must experience a 30% reduction in turnover, or customer orders during a particular reference period and have tax clearance.

Finally, it is my intention that the legislative aspects associated with the revised arrangements for CRSS and EWSS, outlined above, will be addressed by primary legislation in the coming weeks. In the meantime, the Revenue Commissioners are operating the revised arrangements on an administrative basis pending the legislation.

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