Revenue provides important information to employers on the continued operation of EWSS
On 1 June 2021, the Minister for Finance, Paschal Donohoe, T.D., announced the extension of the Employment Wage Subsidy Scheme (EWSS) to 31 December 2021. The Finance (Covid-19 and Miscellaneous Provisions) Bill 2021, which provides for the extension to EWSS, has now passed through all the required stages in both the Dáil and Seanad. Today (16/7/21), Revenue confirmed it is operating the changes to the scheme on an administrative basis until such time as the Bill is enacted, and also provided important information for employers and their tax agents regarding the continued operation of EWSS
Change to Assessment Period
The extension of the scheme provides for a significant change in the assessment period used to determine eligibility for pay dates between 1 July and 31 December 2021. For most businesses, eligibility will be determined by comparing the turnover or level of customer orders of the business for the calendar year 2021 with the turnover or level of customer orders of the business for the calendar year 2019. Many businesses were fully closed or severely limited in their capacity to trade due to the public health restrictions in place for the first seven months of 2021.The change in the EWSS assessment period means that such businesses, taking account of the limited, if any, turnover in 2021 to date, can generate the equivalent of up to 70% of their calendar year 2019 turnover or customer orders for the remainder of 2021 and still remain eligible to claim support under the scheme.
Examples of how the change to the assessment period apply to certain sectors are:
- A hairdresser that had turnover of €120,000* for the calendar year 2019, and was closed due to public health restrictions from 1 January 2021 to 10 May 2021, can generate turnover for the remaining ~7 ½ months of 2021 of up to €84,000, the equivalent of over 110% of the 2019 monthly turnover, and remain eligible for support under EWSS.**
- A café or restaurant that had turnover of €580,000* for the full year 2019 and provided a restricted take-away service during the period of public health restrictions. The business operated at approximately 20% of 2019 turnover from 1 January 2021 until 7 June 2021, totalling €48,000. The business can generate turnover for the remaining ~7 months of 2021 of up to €358,000 (€406,000 - €48,000), the equivalent of 105% of the 2019 monthly turnover, and remain eligible for support under EWSS.**
- A ‘wet’ pub that had turnover of €290,000* for the calendar year 2019, and was closed due to public health restrictions from 1 January 2021 until 26 July 2021*** can generate turnover for the remaining ~5 months of 2021 of up to €203,000, the equivalent of over 165% of the 2019 monthly turnover, and remain eligible for support under EWSS.**
* figure based on average turnover for the relevant sector based on CRSS claims.
** businesses remain eligible for support under EWSS subject to all other qualifying conditions being met.
*** 26 July 2021 is the current latest expected reopening date for indoor hospitality, including bars, under the Government’s plan to reopen the economy.
As illustrated above, the extension of the assessment period to determine eligibility enables those most severely affected by the pandemic, who meet all the qualifying conditions of the scheme, to avail of this essential business support, even if they return to normal or, in some cases, much stronger trading levels in the second half of 2021.
Covid-19 Support Schemes (EWSS & CRSS) statistics published by Revenue each week show that approximately 5,000 employers have started or restarted using EWSS to support their employees over the course of May and June. Most of these employers are small businesses with less than 10 employees, with the largest share in the hairdressing and other beauty treatment and accommodation and food sectors. Over the same period, about 135,000 people who were previously on PUP started or restarted an employment that was supported by the EWSS.
Revenue reminded businesses who may not have been able to retain some or all their employees while public health restrictions were in place to check their eligibility for the scheme. In general, businesses that have tax clearance and meet the reduction in turnover/customer orders criteria will be able to register and apply for support under the scheme.
Monthly review to check eligibility
A key requirement since the introduction of the EWSS in September 2020, is that employers undertake a review on the last day of every month to ensure they continue to meet the eligibility criteria. To enable employers to meet this requirement, Revenue is providing an EWSS Eligibility Review Form, which will be made available in ROS from 21 July. Completing and submitting an EWSS Eligibility Review Form to Revenue will be necessary to continue to avail of EWSS supports with details of an employer’s monthly eligibility review check to be submitted by 30 July in respect of June’s review and by the 15th of the following month in respect of July to November.
For example: the eligibility review undertaken on the last day of June will need to be completed and submitted to Revenue no later than 30 July. Thereafter, the eligibility review undertaken for July will need to be completed and submitted to Revenue by 15 August, and so on for the remainder of the year.
Timely submission of the form is required to ensure continued access to the scheme and will provide assurance to both employers and Revenue that subsequent EWSS claims are appropriate and in line with the terms of the scheme. This, in turn, will reduce the possibility of employers, inadvertently or incorrectly, claiming EWSS amounts to which they are not entitled and having to subsequently repay those amounts to Revenue.
EWSS Subsidy Rates
The existing subsidy rates continue to be applicable to EWSS payments in respect of payroll submissions with pay dates between 1 July to 30 September 2021. Details of subsidy rates payable from 1 October 2021 will be provided in good time in advance of that date.
Additionally, a reduced rate of employer’s PRSI of 0.5% continue to apply to wages paid that are eligible for a subsidy payment under the scheme.
Qualifying childcare businesses
Childcare businesses, registered in accordance with Section 58C of the Child Care Act 1991, are included in the EWSS. While there is no requirement for such childcare businesses to meet the turnover test, the other EWSS eligibility criteria such as registration and tax clearance must be met to access or continue to access payments under the scheme.
Guidelines on eligibility for the EWSS from 1 July 2021 can be found at Guidelines on eligibility for the Employment Wage Subsidy Scheme on the Revenue website. Detailed operational guidance in relation to the scheme can be found at Employment Wage Subsidy Scheme Guidelines.
Finally, yesterday Revenue published updated Covid-19 Support Schemes (EWSS & CRSS) statistics which can be found at COVID-19 Support Scheme Statistics.