The COVID-19 Temporary Wage Subsidy Scheme, implemented in March at the beginning of the crisis, is due to expire on 31 August 2020.
It is being replaced by the new Employment Wage Subsidy Scheme which will come in to effect on 01 September 2020.
To qualify employers must demonstrate that:
- their business will experience a 30% reduction in turnover or orders between 1 July and 31 December 2020
- this disruption is caused by COVID-19.
Employers also must have a tax clearance certificate to be eligible for the scheme. If an employer does have outstanding taxes due but is availing of the new Debt Warehousing arrangements or has an existing agreed payment plan in place with Revenue in respect of the outstanding taxes then that employer will be regarded as being compliant and will be eligible for the EWSS.
The new scheme will provide a weekly flat-rate subsidy to employers per eligible employee:
- For employees earning less than €151.50 per week – no subsidy
- For employees earning from €151.50 to €202.99 per week – subsidy of €151.50
- For employees from €203 to €1,462 per week – subsidy of €203
- For employees more than €1,462 per week – no subsidy
A 0.5% rate of employers PRSI will apply for employments that are eligible for the subsidy.
New Hires/Seasonal Workers
New hires and seasonal workers are covered under this scheme. Eligible employers may backdate a claim to 1 July 2020 for EWSS payments in respect of new hires and seasonal workers, subject to limited exceptions.
Further guidance and information for employers on how to make applications for new hires and seasonal workers will be available from revenue before the new scheme goes live.
The scheme will be administered on a 'self-assessment' basis. On the last day of the month employers must review their situation to ensure that they are still eligible. If they find they no longer qualify should deregister from the scheme immediately.
We have produced a free comprehensive guide to help employers navigate the new scheme. Download it here.
Last updated: 20th August 2020This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.