Bernard Durkan (Kildare North, Fine Gael)
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242. To ask the Minister for Finance the extent to which his Department has provided support to employers throughout the country in the course of Covid-19; and if he will make a statement on the matter. [7328/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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The position is that this Government has introduced a broad range of COVID-19 supports for businesses such as the Employment Wage Subsidy Scheme (EWSS) and its predecessor, the Temporary Wage Subsidy Scheme (TWSS) which represents a substantial and key part of this Government’s response to the COVID-19 crisis.

The objective of both the EWSS and the TWSS before it is to support employment and maintain the link between the employer and employee insofar as is possible. The EWSS is an economy-wide scheme that operates across all sectors.

In money terms, the overall support provided to date by EWSS and TWSS combined is in excess of €10 billion.In the case of EWSS just over €7.3 billion to date has been provided comprising of direct subsidy payments of c. €6.3 billion and PRSI of c. €1 billion to 51,900 employers in respect of over 711,600 employees.

The COVID Restriction Support Scheme (CRSS) was 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 support was available to companies, self-employed individuals and partnerships who carry on a trade or trading activities, the profits from which are chargeable to tax under Case I of Schedule D, from a business premises located in a region subject to COVID restrictions as set out in the relevant legislation. A total of 25,600 unique premises have claimed payments under the scheme amounting to €724 million.

In addition, the Business Resumption Support Scheme (BRSS) was a further support for businesses impacted by COVID-19. Registration for BRSS opened on 6 September 2021 and it closed for applicants on 30 November 2021.I am advised by Revenue that 2,120 businesses with 2,250 trades have availed of the scheme with an associated cost of €7.7 million.

The Tax Debt Warehousing Scheme remains available to support businesses that are experiencing tax payment difficulties arising from the COVID-19 pandemic. The scheme applies to VAT debts, PAYE (Employer) debts, certain self-assessed income tax debts and overpayments of both the TWSS and the EWSS.To qualify for debt warehousing, a business must continue to file all tax returns, even though the liability cannot be paid. The Government have agreed to extend the tax debt warehousing scheme to allow the period where liabilities arising can be “warehoused” to be extended to 30 April 2022 for all taxpayers eligible for Covid-19 support schemes. To date, around €3.2billion in tax debts have been warehoused in respect of almost 105,000 businesses.

I would also point out that details of additional COVID-19 business supports are available via the Department of Enterprise, Trade and Employment’s website at the following link -

enterprise.gov.ie/en/Publications/Business-Supports-2022.html

In addition, I would draw the Deputy’s attention to Fáilte Ireland’s Tourism Business Continuity Scheme 2022, which was launched last month. Further details can be obtained via the following link –

www.failteireland.ie/tourism-business-continuity-programme.aspx

Paschal Donohoe (Dublin Central, Fine Gael)
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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 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 for 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.

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 an employer to take based on its financial circumstances. The payment of bonuses to management and owners by any employer who has received wage subsidy supports is similarly not precluded by legislation.

Consequently, to answer the Deputy’s specific regarding the efforts that have been made to recover the State support from companies who paid dividends and bonuses, the fact that the legislation does not prohibit this, it would not seem reasonable or indeed practicable to retrospectively seek to recoup subsidy payments where companies complied with the legislative requirements in place in relation to the supports.

However, as I have said previously, if businesses who availed of the wage subsidy schemes subsequently had a strong financial year and ultimately considered that the State support was not required by them, I would strongly encourage them to consider their position.

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 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 am advised that a number of employers 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, based on the latest available information to Revenue, 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 710,000 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 or bonuses during the period of the pandemic.

Without the support of EWSS, many businesses would simply not be in existence today and would certainly not be in a position to adapt as responsively as they have to the reopening of all sectors of our economy. The EWSS operates as a highly effective and responsive instrument.

We are now shifting our focus towards the phased exit from the scheme, which is commencing this month for most businesses as they transition to the reduced rates of subsidy. Those businesses that were directly impacted by the most recent public health regulations of last December, will continue to receive the enhanced rates of support for the month of February and commence the transition to the reduced rates of subsidy from 1 March 2022. The EWSS remains in operation until 30 April 2022 for most eligible businesses and until 31 May 2022 for those eligible businesses who have been directly impacted by public health regulations.