04 Sep 2020 | 08.45 am
Revenue Updates Employment Wage Subsidy Scheme Guidance
Turnover decline must be 30% in H2
04 Sep 2020 | 08.45 am
Revenue has issued revised guidance for operation of the Employment Wage Subsidy Scheme that replaced the Temporary Wage Subsidy Scheme from September 1.
The EWSS is expected to continue until 31 March 2021.
To qualify for the scheme, employers must be able to demonstrate that:their business will experience a 30% reduction in turnover or customer orders between 1 July and 31 December 2020 and this disruption is caused by Covid-19.
The comparison to prove the reduction in turnover or customer orders is performed relative to:
• the same period in 2019 where the business was in existence prior to 1 July 2019
• the date of commencement to 31 December 2019
• or where a business commenced after 1 November 2019, the projected turnover or customer orders.
Revenue says that employers are required to undertake a review on the last day of every month to ensure they continue to meet the eligibility criteria. If they no longer qualify, they are supposed to deregister for EWSS from the first day of the following month.
Childcare businesses registered in accordance with Section 58C of the Child Care Act 1991 are included in the scheme. They do not have to meet the turnover test.
To avail of the new scheme, employers must possess a valid tax clearance and maintain tax clearance for the duration of the scheme.
EWSS re-establishes the normal requirement to operate PAYE and normal PRSI on all payments. EWSS charges a reduced rate of employer PRSI of 0.5% on wages paid which are eligible for the subsidy payment.
Seasonal and new hires are eligible for EWSS and claims can be backdated to 1 July 2020. EWSS payments will be made monthly in arrears and as soon as practicable after the payroll return filing date, according to Revenue.
Employers who were not eligible for the TWSS may qualify for the EWSS.
The subsidy is based on an employee’s gross weekly wage, including notional pay, before deductions and excluding non-taxable benefits. Employees are eligible if they are in receipt of weekly gross wages between €151.50 and €1,462.
Newly hired connected parties who were not on the payroll and paid at any time between 1 July 2019 and 30 June 2020 are not eligible. Connected parties include brothers, sisters, linear ancestors, linear descendants, aunts, uncles, nieces, nephews of an individual and their spouse. Also excluded are employees employed otherwise than as part of a business. For example domestic employees such as childminders, housekeepers, gardeners etc.
The level of subsidy the employer will receive is determined by the employee’s gross weekly wage.
Pay less that €151.50 Nil subsidy
From €151.50 to €202.99 €151.50 subsidy
From €203 to €1,462 €203 subsidy
More than €1,462 Nil Subsidy
A separate registration process is required for EWSS through ROS. As part of the registration process, employers or their authorised agents will be required to sign a declaration. Revenue says applications will only be processed if employers:
• are registered for PAYE/PRSI
• have a bank account linked to that registration
• have tax clearance.
Revenue cautions that if an EWSS payment submission is filed without first registering for EWSS, it will be rejected in full. “As registration cannot be backdated it is imperative that employers register for EWSS prior to the first pay date that the EWSS is being claimed,” says Revenue.
Employers are required to retain supporting evidence for the basis for entering and remaining in the scheme. These will be required for any future compliance and verification checks.
Revenue says it will undertake an assurance check programme at a later stage. Further details on how this future assurance check program will operate will issue in due course.
Photo: NPHET’s crazy lockdown has prevented c.3,500 pubs from trading for nearly six months. Among the affected enterprises is the pub owned by Vintners Federation of Ireland president Padraic McGann in Monivea, Co. Galway. (Pic: Conor McCabe)