Arrangements for the Employment Wage Subsidy Scheme

Ministers Donohoe and McGrath announce update on business supports

From Department of Finance; Department of Public Expenditure and Reform

The Minister for Finance Paschal Donohoe TD, and the Minister for Public Expenditure and Reform Michael McGrath TD, have today (Thursday) announced plans for enhanced support for businesses who qualify for the Employment Wage Subsidy Scheme (EWSS) for December 2021 and January 2022.

Following approval from Government on Friday 3rd of December, the Department of Finance worked with the Revenue Commissioners to further develop a proposal to modify the Covid Restrictions Support Scheme (CRSS) to provide targeted support for businesses which are subject to the latest public health restrictions. The objective of this modified scheme was to provide targeted, timely and sector-specific support to supplement the EWSS payments to affected businesses.

However, on further consideration and analysis of the available data, it proved to be administratively very complex to design such a scheme and it would not be possible to have it operational ahead of Christmas as had been intended.

Minister Donohoe has now decided that maintaining the enhanced rates of subsidy under the EWSS for a further two months is a relatively more efficient and effective way to support affected businesses in the short term.

Minister Donohoe has also decided to extend the end-date of the CRSS to 31 January 2022 to align with the requirement for nightclubs and discos to close until 9 January 2022 under the Health Regulations.

A further amendment to the Finance Bill 2021 will be brought in the Seanad stage next week to give effect to these changes.

Speaking today Minister Donohoe said:

“I fully appreciate the difficulty many businesses have been presented with in recent weeks given the evolving situation with Covid-19 and recent decisions taken regarding public health restrictions.

As announced last week it was intended to develop further targeted support for those sectors that are most affected by these restrictions and to have this support in place quickly. Upon further analysis of the proposal by my Department and the Revenue Commissioners, it became clear that it would be complex to develop an appropriate and effective scheme in the immediate term.

Instead, I have decided to extend the enhanced rates of EWSS for the months of December and January to give certainty to businesses when they need it most.

The Government and I have been clear that there will be no cliff edge to supports for employers but we have also been clear that the EWSS cannot run indefinitely, nor is it sustainable to continue with the enhanced rates for a prolonged period of time given the very substantial costs to the Exchequer.

From 1 February 2022, the original two-rate structure of €203 per week and €151.50 per week will apply; for March and April 2022 the flat rate subsidy of €100 per week will apply and the scheme will end on 30 April 2022.

The CRSS will be extended until 31 January 2022 to allow nightclubs who are closed under Health Regulations until 9 January access to this much needed support.”

Minister McGrath said:

“The extension of the CRSS and EWSS schemes are a further part of the Government’s ongoing package of supports for the economy. To date, over €20 billion in direct supports has been provided to help the economy and households. The commercial rates waiver has been extended until the end of March 2022 and this will help to support many business through this difficult period. We have seen a strong rebound in the economy and strong economic growth. The level of unemployment has fallen below 7% and the public finances are in a better place than envisaged a year ago. However it is clear that the hospitality and live entertainment sectors have been impacted significantly and they have carried the burden of much of the public health restrictions and must be supported. Today’s announcement is consistent with the commitments outlined in Budget 2022 to take decisive action where needed to respond to the ongoing challenges of the pandemic”.

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