Employment Wage Subsidy Scheme: Qualifying criteria breakdown

Moira Grassick

September 08 2020

The Employment Wage Subsidy Scheme (EWSS), part of the Government’s July Jobs Stimulus plan, came into effect in place of the Temporary Wage Subsidy Scheme (TWSS) on September 1st.

However, it’s been available to businesses since the pay period beginning on July 1st, having run parallel to the TWSS up until the end of August. The EWSS is also expected to remain in place until March 31st, 2021.

So, why does the EWSS matter and what can it do for your business provided you meet certain eligibility criteria? Well, it will entitle your business to receive a flat-rate wage subsidy for each eligible employee on your payroll. And this, during the coming months, could prove very helpful to your business.

New Employment Wage Subsidy Scheme qualifying criteria

New eligibility criteria have come into effect with the introduction of the EWSS.

For instance, businesses that used the TWSS will take a hit as the subsidy has decreased. It’s also likely that fewer businesses will meet the new criteria, making it more difficult to qualify for the scheme.

Yet, the EWSS does allow businesses to subsidise the wages of seasonal workers and new recruits. This was not the case under the TWSS.

Under new eligibility criteria, businesses must show a 30% reduction in turnover or orders during the period between July 1st and December 31st, 2020. The decline required for the TWSS was 25%, meaning the increase may exclude certain businesses from accessing the EWSS.

The other change to qualifying criteria relates to tax clearance. Businesses hoping to avail of the EWSS must have a valid Tax Clearance Certificate confirming that their tax affairs are in order. Tax clearance can be arranged through Revenue’s online ROS system and businesses are encouraged to apply as soon as possible.

Decrease in subsidy available

One of the key changes is the subsidy amount. Businesses that qualify will receive the following subsidy per paid employee:

Employee Gross Weekly Wages

Subsidy Payable

Less than € 151.50

Nil

From € 151.50 to € 202.99

€ 151.50 per week

More than € 203 and less than € 1,462

€203 per week

More than € 1,462

Nil

For businesses that qualified for the TWSS, this is a major decrease as wages were subsidised by up to €410 per worker per week.  

Furthermore, no subsidy is currently available for workers earning less than €151.50 per week. That means that businesses with lower-paid or part-time workers may also be denied support under the scheme.

Changes to timing of payments

The EWSS could create cashflow difficulties for businesses as the timing of payments is different to the TWSS.

Previously, Revenue paid TWSS subsidies within 48 hours of the submission of the relevant payroll details. Now, the timeframe for receiving EWSS subsidies could be up to six weeks.

Redundancies to rise?

The TWSS launched in March and it’s estimated that almost 70,000 employers availed of the scheme. It was used to part pay the salaries of roughly 600,000 employees for at least one payroll period.

Figures suggest that around 365,000 employees were paid using the TWSS up until the end of August. It’s also been predicted that the EWSS’s stricter eligibility criteria and reduced subsidy will lead to a rise in redundancies.

The suspension of redundancy claims by employees relating to short-time working and lay-off is also set to expire on September 17th. As a result, we could see an increase in employees seeking statutory redundancy payments.

Need our help?

For further complimentary advice on the Employment Wage Subsidy Scheme from an expert, call us any time day or night on 1890 252 923 or request a callback here.

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