On 23 July 2020, the Irish Authorities introduced the introduction of a brand new Employment Wage Subsidy Scheme (“EWSS”). The EWSS will exchange the Non permanent Wage Subsidy Scheme (“TWSS”) from 1 September 2020 and is about to run till 31 March 2021.
Each the EWSS and TWSS have been operating in parallel from 1 July and can proceed to take action till the TWSS ceases on 31 August 2020. Eligible employers can avail of the EWSS for eligible new hires from 1 July 2020. From 31 July 2020, these employers who had not beforehand availed of the TWSS, are solely eligible to use for the brand new EWSS. The place an worker is at present registered below the prevailing TWSS, that worker should stay within the TWSS till the top of August and mustn’t avail of EWSS.
Employer qualification standards
One of many principal sensible issues for employers to notice is that the qualification standards for the EWSS differs from the present qualification standards below the TWSS.
Firstly, employers should possess a sound tax clearance to enter the EWSS and proceed to keep up tax clearance all through the Scheme.
Secondly, in an effort to qualify for the EWSS, a enterprise should reveal that it’ll expertise a 30% discount in turnover or orders between 1 July and 31 December 2020 and that this disruption is because of COVID-19. This discount in turnover or orders is calculated by reference to: (a) the identical interval in 2019 the place the enterprise existed earlier than 1 July 2019; (b) the date of graduation to 31 December 2019; or (c) the place a enterprise commenced after 1 November 2019, the projected turnover or orders.
There’s an exception supplied in respect of registered childcare suppliers, with the EWSS being accessible with out the requirement to fulfill the 30% discount in turnover or buyer orders take a look at.
Separate registration course of
A separate registration course of is required for EWSS because the eligibility standards differs materially from the eligibility standards for TWSS. As registration can’t be backdated, employers ought to proceed to register for EWSS as quickly as doable if the eligibility standards are met.
Overseen by Income
As is the case with the TWSS, the EWSS can be overseen by Income on a self-assessment foundation. The Income has lately confirmed that in an effort to be certain that the scheme is operated as supposed by the employer, Income will undertake an assurance verify programme at a later stage. Additional particulars on how this future assurance verify program will function will challenge in the end from Income, so employers are suggested to retain proof and supporting documentation which reveal their evaluation and declaration.
A brand new stipulation additionally obliges employers to undertake a evaluate on the final day of each month to establish whether or not they proceed to fulfill the factors and should de-register the next day in the event that they now not qualify for the EWSS.
All staff who’re on the payroll of the employer at any time within the “qualifying interval” (i.e. between 1 July 2020 and 31 March 2021) can be eligible for inclusion on the EWSS. Subsequently, the EWSS is open to seasonal employees and new hires.
The EWSS will present a flat-rate subsidy to qualifying employers, based mostly on the variety of qualifying staff on the payroll, as follows:
As is the case with the TWSS, the subsidy can be paid on to the employer. The employer can pay the worker their regular wages and can then obtain a subsidy from the Income in respect of every eligible worker following submission of every payroll return.
The EWSS will re-establish the conventional requirement to function PAYE on all funds. This consists of the common deduction and remittance of revenue tax, USC and worker PRSI. The truth that subsidy funds will now be topic to tax and USC within the regular manner is a welcome growth and will rectify the problems that are being brought on by staff eligible below the TWSS persevering with to accrue a tax legal responsibility which is to fall due at year-end. Employer PRSI will proceed to use at a decreased fee of 0.5%.
As is the case at present with the TWSS, the names and addresses of all employers who avail of the EWSS can be printed on the Income Web site.
Though the extent of assist can be decreased, many employers will welcome the extension of wage subsidy helps till 31 March 2021.
Employers at present availing of the TWSS and certainly these contemplating registering for EWSS are strongly suggested to contemplate the brand new eligibility standards to make sure that they meet identical. Any evaluation made on this regard ought to be appropriately documented. Employers must also keep in mind the categorical stipulation that they need to undertake a evaluate on the final day of each month to establish whether or not they nonetheless meet the factors.