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Covid-19: Latest Updates: Introduction And Implication Of Employment Wage Subsidy Scheme

The Temporary Wage Subsidy Scheme (TWSS) will be replaced by the Employment Wage Subsidy Scheme (EWSS) from the 1st of September 2020. Employers are required to register for the new scheme. The qualifying employers will be paid a flat-rate subsidy, which will be based on the number of eligible employees on their payroll. In order to qualify for the EWSS, the employer must be in a position to demonstrate that their business will experience a 30% reduction in turnover/orders between 1st July 2020 and 31st December 2020, due to Covid-19.

The Collector-General, Mr Joe Howley, stated that “unlike TWSS, the employer must have tax clearance to be eligible to join the EWSS and remain tax clear to continue receiving the EWSS benefits”. Revenue has also emphasised that the employers availing the scheme must be registered for PAYE/PRSI and must have a bank account linked to that PAYE/PRSI registration. The scheme requires the employers to review their eligibility at the end of every month and if they do not meet the criteria, then are obliged to withdraw from the scheme immediately.

Subsidy can be claimed in respect of employees on the payroll and in receipt of gross wages of between €151.50 and €1,462 per week during the period of EWSS (i.e., between 1 September 2020 to 31 March 2021), including new hires.

Employees who are specifically excluded from the legislation and who do not fall under the category of ‘Eligible Employee’ are:

  1. Proprietary Directors (additional guidance in respect of certain proprietary director’s eligibility is awaited);
  2. Connected Parties who were not on payroll at any time between 1st July 2019 and 30th June 2020 (includes, brothers, sisters, linear ancestors, linear descendants, aunts, uncles, nieces, nephews and their spouse). A person is connected to a company if they alone or together with other connected parties exercise/acquire control of more than 50% of the issued share capital.

Additional employees that are ineligible for the scheme are:

  1. employees working in a business division or related group entity not expected to suffer a 30% reduction; and
  2. employees employed otherwise than as part of a business e.g. domestic employees such as childminders, housekeepers, gardeners etc.

The rate of weekly subsidy has been reduced from €350 to the following rates:

Employee’s Gross Weekly WagePayable Subsidy Rate
Less than €151.50NIL
From €151.50 to €202.99€151.50
From €203 to €1,462€203
Above €1,462NIL

While the TWSS payment was paid within 48 hours, the payment under EWSS will be paid in arrears of up to 6 weeks (i.e., up to 5 weeks for the weekly paid and up to 2 weeks for those paid monthly), which might lead to cash-flow burden on the employers.  Revenue further clarified that the payroll submissions of quarterly/yearly/bi-yearly/ other claims will not be processed, although the submissions will be accepted on the Revenue’s system.

Operational Aspects:


Authors – Anne O’Connell & Chaitra Girish Mallya

31st August 2020

Anne O’Connell Solicitors

Fitzwilliam Hall

Fitzwilliam Place

Dublin 2


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