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Factsheet for case IE-2020-36/1157 Updated – measures in Ireland

New wage subsidy scheme (EWSS) is less generous, but fiscally more sustainable

Employment Wage Subsidy Scheme (EWSS)

Country Ireland , applies nationwide
Time period Temporary, 01 September 2020 – 31 December 2021
Type Legislations or other statutory regulations
Category Employment protection and retention
– Income support for people in employment (e.g. short-time work)
Author Roisin Farelly (IRN Publishing) and Eurofound
Case created 18 September 2020 (updated 23 July 2021)

Background information

The scheme is aimed at replacing the Temporary Wage Subsidy Scheme (TWSS), which has been in place since March 2020. It is a lower level of subsidy than under the TWSS and is seen as more fiscally sustainable for the seven-month period it is planned to be in existence. Read more about the TWSS in the COVID-19 PolicyWatch database .

Content of measure

The scheme provides flat rate subsidies to businesses who have lost more than 30% of turnover or customer orders due to COVID-19.

These subsidies are as follows:

  • €203 per week for those with weekly gross wages between €203 and €1,462 per week;
  • €151.50 for those with gross weekly wages between €151.50 and €202.99 per week.

Although the scheme began on 1 September 1 2020, payments can be claimed retrospectively for July and August 2020.

Exceptions include family members not on the payroll in the 12 months before 1 July 1 2020, some proprietary directors (those not on the employer's payroll); domestic employees.

Registered childcare providers are exempt from the 30% turnover loss requirement.

The scheme is administered by the Revenue (tax collection agency) on a self-assessment basis, with compliance checks to come later. Those in the schemes are to review their continued eligibility at the end of each month and de-register if they are no longer eligible. A list of employers benefitting is to be made public. Tax clearance certificates from Revenue are required to participate in the scheme. The usual pay-as-you-earn (PAYE) tax collection system operates for wages covered by the scheme (its predecessor TWSS scheme had a different system). Wages covered by the subsidy have a reduced employer social insurance payment of 0.5%.

Updates

The following updates to this measure have been made after it came into effect.

01 June 2021

Under the Government's Economic Recovery Plan 2021, the EWSS is extended until 31 December 2021.

Current payment rates will be in place until end of September 2021 at current turnover thresholds. The time period for assessment is broadened from 6 months to 12 months.

An employer contribution to employee wages after that period will be considered for the final quarter of 2021.

23 February 2021

Under the Government's revised plan 'COVID-19 Resilience and Recovery 2021 - The Path Ahead', the EWSS is extended until 30 June 2021.

06 January 2021

On 6 January 2021, the Government announced that the current rates of subsidy provided by the Employment Wage Subsidy Scheme (EWSS) will remain in place until 31 March 2021 at an estimated cost of an additional €38 million per week, or an additional €323 million in total by the end of March 2021.

The rates of subsidy that will continue to apply until 31 March 2021 are as follows:

Gross Weekly pay: (Rate of Subsidy to employer):

  • Less than €151.50 (Nil)
  • €151.50 – €202.99 (€203)
  • €203 - €299.99 (€250)
  • €300 - €399.99 (€300)
  • €400 - €1,462 (€350)
  • Over €1,462 (Nil)
09 November 2020

According to figures from the Revenue Commissioners, in September 2020, €254 million was paid to 32,700 employers – paying 341,200 employees.

Accommodation and food services accounted for the highest participation in the EWSS, comprising 18.2% of eligible employers and 30.2% of employees. The majority of claims were in Dublin, which accounted for 31.3% of employers, 39.7% of qualifying employees.

Use of measure

According to figures from the Revenue: The employment wage subsidy scheme paid €1.42 billion to 39,800 employers in respect of 443,100 employees between September 2020 and end of December 2020.

According to figures released by Revenue, as of 18 February 2021: 48,600 employers were registered with Revenue for EWSS. In total, €1.99 billion was paid up 18 February 2021 under the scheme and 526,800 employees were paid from the scheme.

Target groups

Workers Businesses Citizens
Employees in standard employment
Applies to all businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
Company / Companies
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Informed Informed
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: Unknown

Involvement

It is likely that they were informed of the measures, as was the case under the previous Temporary Wage Subsidy Scheme that applied from March to August 2020, but there was no formal role.

Views and reactions

Both sides welcome the continuation of some form of wage subsidy, although it provides less subsidy that the previous scheme.

Sources

Citation

Eurofound (2020), New wage subsidy scheme (EWSS) is less generous, but fiscally more sustainable, case IE-2020-36/1157 (measures in Ireland), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.