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The Employment Wage Subsidy Scheme (EWSS) replaced the Temporary Wage Subsidy Scheme from 01 September. In order to be eligible the business must experience a reduction of 30% in turnover or customer orders caused by Covid disruption. EWSS
The scheme re-established the normal requirement to operate the PAYE system including reduction of Income Tax, USC and PRSI – a reduced rate of 0.5% employer’s PRSI continues for wages eligible under the subsidy. Reduced Rate PRSI
Employers eligible for the EWSS may claim a ‘sweepback’ payment for the months of July and August in respect of newly hired employees that were not previously on the TWSS. Sweepback payment under EWSS.
The EWSS is due to run until 31 March 2021.
The amount receivable per employee per week is currently paid at €203.00 per employee per week however, following the announcement of Level 5 restrictions, the Government has amended the EWSS to be aligned with the PUP and up to 31 January 2021, commencing from Thursday 22 October, there will be 5 payment rate bands based on employee’s earnings (clarity is yet to be given in relation to the wage period on which the EWSS tiered payment will assessed) Level 5 and PUP/EWSS amendments
The revised subsidy rates mean that, for example, if an employer is currently availing of the EWSS for an employee on a weekly wage of €350, the subsidy has increased from €203 per week to €300 per week. Similarly, for an employee on a weekly wage of €475 the subsidy has increased from €203 per week to €350 per week.
Additionally, the EWSS is available to employers who have had to temporarily close their business due to Level 5 public health restrictions in respect of eligible employees that are maintained on the payroll during the period they are closed.
Frequency of EWSS payments
The EWSS was originally designed to pay the subsidy due once a month in arrears as soon as possible after the due date of the relevant monthly Employer PAYE return (the 14th of the following month).
On 6 October 2020, Revenue announced that it had brought forward the date for EWSS payments to the fifth day of the following month. October EWSS payments, including the increased rates announced by the Minister for Finance in respect of payroll submissions with pay dates on or after 20 October 2020, will be paid by 5 November 2020.
Revenue is currently working to further significantly shorten the EWSS payment timeframe. In this regard, the first EWSS payments in respect of November payrolls will be made in early November, rather than by 5 December. Thereafter, subsequent payments for November will be paid following the receipt of a payroll submission containing an EWSS claim. This means EWSS will be paid on a similar basis to the Temporary Wage Subsidy Scheme (TWSS), providing a significant positive cashflow boost for businesses.
Finally, due to the current Level 5 public health restrictions, employers who previously did not qualify for EWSS may now be able to show the necessary 30% reduction in turnover or customer orders between 1 July and 31 December 2020. Revenue is reminding employers that it is still possible to register for EWSS once all qualifying criteria are met. Once registered, employers can then claim subsidy payments in respect of payroll submissions with a pay date on or after their registration date.
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