Rescue Package
Employers will be relieved that wage subsidies have been extended to April 2021, albeit at reduced levels. Nick Mulcahy assesses this and other measures to assist business in the new government’s Stimulus Plan
Employment Wage Support Scheme
Of government measures to help business to date, the Temporary Wage Subsidy Scheme has been the greatest benefit to enterprises as they cope with the fallout of the government-mandated lockdown. It has also been the most costly outlay for the Exchequer. From September it will be pared back, replaced by a new Employment Wage Support Scheme.
Employers qualified for TWSS on condition that they had suffered a 25% decline in turnover this year. Around 63,500 employers have received subsidy payments under TWSS and c. 400,000 employees are currently being directly supported by the scheme. The cumulative cost of the scheme from the start of April to end July has been c.€2.3 billion, an average of €135m per week. In the most recent eight-week period the average has been €115m per week.
The Stimulus Plan didn’t explain when in September the TWSS will conclude, though Sept.17 is a possibility, as that’s when PUP payments start to taper. The bar has been raised and the subsidy lowered with the new Employment Wage Support Scheme (EWSS), which will run until April 2021. TWSS linked the weekly wage subsidy payable to average earnings, up to a maximum of €350 per week. With the new EWSS, employers only qualify if their turnover has declined by 30% or more, presumably on a year-on-year basis for a defined calendar period. The wage subsidy is being reduced to a flat-rate subsidy of up to €203 per week, the same as a dole payment. What’s new is that EWSS will be payable to seasonal staff and new employees. New firms operating in impacted sectors will also be eligible.