Temporary Wage Subsidy Scheme
As we draw closer to the August 31st date we await potential changes to the Temporary Wage Subsidy Scheme. It was expected the Temporary Wage Subsidy Scheme would be replaced or at least undergo radical changes by the end of August. With many companies opening their doors after months of quarantine, it is a genuine concern that they may be forced to close them indefinitely due to a slow down in trade.
The Temporary Wage Subsidy Scheme is intended to support companies suffering from the economic fallout surrounding the Covid-19 pandemic but it is a delicate balancing act which we must get right if we wish to avoid another economic recession both in Ireland and around the world. If supports for businesses do not go far enough to help bridge the total halt of trading during quarantine then companies will simply go out of business once the supports are removed. Pulling financial supports for business owners before the economy has had ample time to recover is the equivalent of walking on a broken foot before it has healed.
With the support of the Temporary Wage Subsidy Scheme, Sole Traders and Limited Companies have been allowed to return to work with confidence that they can pay wages at the end of the month but this is not feasible in the long term as the cost for these protective measures continues to mount.
Replacement of the Temporary Wage Subsidy Scheme
The revised Employment Wage Subsidy Scheme will provide subsidies of between €151.50 and €203 gross per week depending on employees pay. This will be paid to qualifying businesses for eligible employees. In cases where businesses take on new staff and pays them between €7,878 and €76,024, they will be eligible for the above subsidy. In cases where you are a director of a company you may still be entitled to avail of this subsidy if you have “ordinary” employees on this scheme.
Conditions on qualification for Employees Wage Subsidy Scheme (EWSS)
In order for your business to qualify for this revised subsidy scheme it would need to show a drop in income down to 70% of their figures for the same period for 2019. The considered period ranges from the first of July through to the thirty first of December. Those currently on the wage subsidy scheme will continue to receive payments until August 31st but should apply for the new Employees wage subsidy scheme. This will run from September 2020 until March 31st 2021. If your are a registered childcare provider, you do not need to meet the requirement of a 70% drop in trading in order to apply for the new Employees wage subsidy scheme.
The subsidy amount paid to employers will depend on the gross income of each employee.
EWSS will give a flat-rate subsidy to qualifying employers, based on the number of qualifying employees on the payroll.
- For every employee paid between €203 and €1,462 gross per week, the subsidy is €203.
- For every employee paid between €151.50 and €202.99 gross per week, the subsidy is €151.50.
No subsidy is paid for employees paid less than €151.50 or more than €1,462 gross per week.
If an employment is eligible for the subsidy, a 0.5% rate of employer’s PRSI will apply.