A new Employment Wage Subsidy Scheme (EWSS) will replace the Temporary Wage Subsidy Scheme (TWSS) from 1 September 2020. Nikki Johns answers some frequently asked questions about the new scheme.
What is the Employment Wage Subsidy Scheme?
The EWSS is a new scheme announced by Government on 23 July 2020. It provides a flat-rate subsidy for qualifying employers based on the number of eligible employees on their payroll.
How does the EWSS relate to the TWSS?
The EWSS replaces the TWSS. Some employees who were not eligible for the TWSS may now qualify for the new scheme. Where this is the case, claims can be backdated to 1 July 2020. Revenue has said that a template will be available in late August to facilitate these ‘sweepback’ claims.
When does the EWSS begin?
The EWSS comes into effect on 1 September 2020 and is expected to continue until 31 March 2021.
What happens to my employees who are currently on the TWSS?
Employers who are already registered for the TWSS can continue paying employees under that scheme until 31 August 2020. To transfer eligible employees onto the EWSS for pay dates from 1 September 2020 onwards, a new application must be submitted through Revenue Online.
How do I qualify for the EWSS?
To qualify for the scheme, you must be able to demonstrate that you meet the following conditions:
- Your business will experience a 30% reduction in turnover or orders between 1 July and 31 December 2020 when compared to the same period last year. If your business commenced after 1 July 2019, the relative period is date of commencement to 31 December 2019. If your business commenced after 1 November 2019, the reduction must be relative to the projected turnover or orders.
- The drop in turnover or orders must be due to Covid-19.
- Your business taxes must have an up to date tax clearance certificate. If you have outstanding tax debts, you can still obtain a tax clearance certificate provided your debts have been warehoused or you have entered into a phased payment arrangement with Revenue.
How do I apply for the EWSS?
You apply through Revenue Online. You will need to self-declare that your business qualifies for the EWSS. Once you have registered, you must undertake a review at the end of every month to check that you still qualify for the scheme. If you no longer qualify, you must deregister with effect from the first day of the next month. Note that each monthly review covers your projected turnover for the entire 6-month period (July-December), not just for the month in question.
Can I re-register for the EWSS if my business circumstances change?
Yes. If you had de-registered for the EWSS based on a monthly review and then find that you will in fact meet the eligibility requirements you may re-register, however you will not be able to claim retrospective payments under the EWSS in this situation.
How much will I receive under the EWSS?
The amount payable depends on the actual gross payment made to an employee in a given period, not on the average net pay as was the case with the TWSS. The subsidy is paid at a flat rate per employee, as set out below:
|Employee Gross Weekly Wages||Subsidy Payable|
|Less than € 151.50||Nil|
|From € 151.50 to € 202.99||€ 151.50|
|From € 203 to € 1,462||€ 203|
|More than € 1,462||Nil|
When will I receive the EWSS payment?
Payments in respect of July and August 2020 are expected to be made by Revenue in mid-September. Payments for subsequent periods will be made monthly in arrears. You must maintain your tax clearance to continue receiving the subsidy.
How does EWSS affect payroll?
Under the EWSS, payroll is run as normal with the re-establishment of the usual deductions for PAYE, USC, and PRSI. To indicate that you wish to claim the subsidy for a particular employee, you must include ‘EWSS’ as the payment type in the ‘Other Payments’ section of the payroll submission, with either a 0.00 or 0.01 value (the amount required will depend on your payroll software). The EWSS is an employer subsidy, and will not appear on the employee’s payslip.
Where can I find out more?
Further information is available in the Revenue publication, Guidelines on the operation of the Employment Wage Subsidy Scheme.