Employment Wage Subsidy Scheme – Extension Announced

Today’s blog post will look at the recently announced extension of the Employment Wage Subsidy Scheme (EWSS), to 31 December 2021. 

As discussed in previous blog posts, the EWSS is the follow-on program from the previously implemented Temporary Wage Subsidy Scheme (TWSS). It represents a substantial and key part of the Government’s response to the COVID-19 pandemic with the aim of supporting businesses, encouraging employment and helping to maintain the link between employers and employees.

The scheme represents an important bridge between the Pandemic Unemployment Payment (PUP) and regular employment, which is the ultimate goal.

It has recently been announced that the Employment Wage Subsidy Scheme will be extended beyond 30 June 2021, until 31 December 2021.

It should be noted that:

  • Current enhanced payment rates will be maintained for Quarter 3 (July, August, September) at current turnover thresholds. 
  • In order to benefit more firms, the time period for assessment will be broadened from the current 6 month period of assessment to a full 12 month period. This will ensure businesses and their workers are supported through the earlier part of the recovery and in recognition of the value of workers maintaining their links to the labour market. 
  • Two important questions have come up recently which have not been resolved, but have been noted and will be considered during the remainder of 2021:
    • whether an employer contribution to employee benefits in terms of the scheme will be required; and 
    • the issue of the appropriate calibration of rates of subsidy for the final quarter of the year. 

The EWSS is seen as a very important part of the re-opening process and it is hoped that it will align incentives with the need for businesses to attract staff and that people benefit from a return to employment.

Our team is already working on the necessary updates to the system which will allow you to apply the EWSS system item to your employees for payslips beyond June 2021 and up to the new end date.

If you have any questions on how the information above relates to SimplePay, please feel free to contact us at [email protected].

Keep well and stay safe.

Team SimplePay

Level 5: Support for Businesses

As of midnight on 21 October, the whole of Ireland entered into level 5 of lockdown for a period of 6 weeks. Our blog post today looks into changes that have or are to be made to existing schemes, in order to help support your business and employees.

Employment Wage Support Scheme (EWSS)

The rate of subsidy for EWSS has been revised to help support your business under level 5. The EWSS rates are to be aligned with the PUP rates of payment. If your employees’ gross earnings were €400 or more per week prior to the pandemic, they will now receive €350.

These changes will be effective from the next payroll date, after 19 October 2020. For convenience we have attached the revised rates in the table below:

COVID-19 Restriction Support Scheme (CRSS)

The eligibility criteria for CRSS have been relaxed, meaning your company can qualify for it provided that your turnover is no more than 25% of the average weekly turnover for a period equal to the same number of weeks in 2019. New businesses will instead be required to use figures from 2020. If your business is affected by entering into level 5, this might provide you with a means of further relief, in addition to EWSS.

To qualify, your business must be operating from premises wholly located in a region which is subject to restrictions under the Government’s “Resilience and Recovery 2020: Plan for Living with Covid-19”.  As a result, you must be required to prohibit or restrict members of the public from entering your premises. Generally, restrictions apply at levels 3, 4 and 5, but your business might still qualify at lower levels, depending on your circumstances.

The support provided is as follows. Up to the first €20,000 of your company’s 2019 average weekly turnover, you will receive a 10% cash payment. If your business’s weekly turnover was greater than €20,000, any  amounts above this will accumulate additional payments at 5%, up to a maximum payment of €5,000 per week from the scheme. Therefore, to get the maximum amount, your business’s average weekly turnover in 2019 would need to be €80,000.

The scheme is due to run between 13 October 2020 and 31 March 2021, but Revenue is still in the process of adapting their systems for the scheme. Therefore the first payment under CRSS will be delayed until the CRSS system is live.

For more information on the CRSS, you can read the Government’s overview letter here.

Pandemic Unemployment Payment (PUP)

In relation to PUP, the Government has introduced a fourth bracket of payment. If your employee’s gross earnings were €400 or more per week prior to the pandemic, they will now receive €350 from their PUP payment. This aligns PUP with EWSS.

This change takes effect for all new applications received from 16 October 2020. All the other PUP brackets remain unchanged at €203, €250 and €300.

New applicants are being urged to apply online at MyWelfare.ie.

Sectors Exempted from Level 5 of Lockdown

If your business falls within one of the Government’s listed essential services or essential retailers, your business is permitted to continue operating under level 5.

The list of essential retailers can be found here.

The list of essential services can be found here

Please note that both these lists only apply to level 5 and may be changed if the lockdown level drops.

We hope that you have found the above information useful. If you have any questions on how the information above relates to SimplePay, please feel free to contact us at [email protected] 

Equally, if you are not yet a client of SimplePay but would like to be, or if you’d like to know how we can take the effort out of filing and calculating payroll, get in contact with us or visit our website: www.simplepay.ie

Keep well and stay safe.

Team SimplePay

EWSS Sweepback Process

As you are no doubt aware, the Temporary Wage Subsidy Scheme (TWSS) came to a conclusion on 31 August, and has been replaced by the Employment Wage Subsidy Scheme (EWSS). If you are not familiar with EWSS, you can read about it on our help page. Some of your employees may not have been eligible for TWSS, adding to your financial burden. To make sure that support in relation to such employees doesn’t fall through the cracks, Revenue has implemented the July / August EWSS sweepback (the sweepback).

Under the sweepback, eligible employers can backdate a claim for EWSS to 1 July for the relevant eligible employees. This is allowed under the following circumstances:

  • The employer was not eligible for TWSS; or
  • The employer had employees ineligible for TWSS.

How to Apply

If you want to apply for the sweepback, you need to fill in this Sweepback CSV Template and submit it on ROS when this facility becomes available on 15 September 2020. All applications for the sweepback must be submitted before 14 October 2020 through ROS to be considered.

Revenue has released this handy guidance document for the sweepback process covering eligibility, how to apply, how to fill in the CSV as well as how to upload it to ROS. 

EWSS Claims from September Onwards

As we love making your payroll a doddle, for the wider EWSS scheme we have created a new EWSS system item. If you as a company and some or all of your employees qualify for EWSS, the relevant employees should have the EWSS item added for the months that they qualify from September onwards. This has no effect on the payslip or calculations, but will inform Revenue of the relevant amounts due. You can read more about this in our previous blog post from 31 August.

Not a SimplePay client? Our self-service portal allows employees to view payslips and tax certificates, update their personal information and submit leave and claims for payslip items. It’s one of the many features that makes payroll with SimplePay so easy. Not convinced? We offer a free 30 day trial that lets you try out our system to see if it suits your payroll needs. You can sign up for the trial here.

Team SimplePay

Introducing EWSS and TWSS Reconciliation

Amongst many other vital schemes, programmes and incentives, the Government’s July stimulus package signposted the upcoming transition from the Temporary Wage Subsidy Scheme (TWSS) to the Employment Wage Subsidy Scheme (EWSS). Naturally, as the TWSS starts to draw to a close, the reconciliation of this scheme will begin. In today’s blog we shall give you an outline of what you can expect in the near future with respect to EWSS, as well as the purpose of and likely process for TWSS reconciliation as we come to the end of TWSS.

Employee Wage Subsidy Scheme

The EWSS is due to succeed TWSS in supporting employers in paying employee’s wages and will at least run until April 2021, with the possibility of extension after this date. TWSS is currently still in operation, but is due to close on 31 August. Although EWSS has now opened and is available for the months of July and August, if you are currently participating in the TWSS scheme you should not switch to EWSS until 1 September 2020. There are some fundamental differences between the two schemes, which we have detailed below:

Update 6 August: Proprietary directors reinstated to the EWSS from 1 September – see here.

EWSS vs TWSS

TWSSEWSS
Eligibility Criteria25% reduction in turnover / Customer Orders / reasonable basis for Q2 of 202030% reduction in turnover / Customer Orders for the period of July to December 2020, compared to the same period in 2019. (More to be announced for companies not in operation before July 2019).
Proprietary directors can partake from 1 September.
Certain restrictions for connected persons.
Amount paid Under the schemeUp to €410 per employee per week, dependent on salary and employer top upsUp to €203 per employee per week, dependent on salary.
Purpose of the fundingEmployee wagesCompany subsidy
Tax on scheme amountsNot subject to PAYE, USC or PRSI for employees or employers, but taxable on assessment for employees. Reinstatement of PAYE, USC and employee PRSI payroll deductions for employees. Employers PRSI contributions reduced to 0.5%.
Unclear on the tax treatment of the payments to the employer from the EWSS. 
Scheme Operational between1 March to 31 August 20201 July 2020 to  31 March 2021

Revenue is finalising the exact ways in which the EWSS scheme will be run and processed through payroll. They have also stated that if employers wish to participate in EWSS before 1 September, this must be done separately to payroll and so SimplePay will unfortunately not be able to assist you if this is what you wish to do.

When we have a full picture of how the scheme will be implemented and put into effect, we shall inform you on how SimplePay is catering to your needs and making your payroll a doddle!

TWSS Reconciliation

Due to the nature of the situation brought about by COVID-19, the TWSS had to be implemented swiftly to ensure that companies and their employees were supported. Because it was important that employees received funds, the TWSS payments were treated as a non-taxable benefit in terms of PAYE, USC and PRSI, but would be taxable on assessment. Due to this expedited implementation, for the first two months that TWSS was running there was no way of recording the subsidy amount on an employee’s payroll submission. To address this, part way through the scheme Revenue introduced a new payment field labeled “other payment” to allow for subsidy payments to be recorded on employees’ payroll submissions.

The aim of the reconciliation is to:

  • establish the actual subsidy amounts which were paid to each employee; 
  • see if the correct amounts were paid to each employee in the months before accurate subsidy values were provided by Revenue; and
  • settle the difference for these early months between the employer’s and Revenue’s calculated values.

As the framework for this reconciliation process is being finalised, SimplePay will take all the necessary actions to make your processing of this as smooth and hassle free as possible.

We hope that you have found the above information useful. If you have any questions on how the information above relates to SimplePay, please feel free to contact us at [email protected] 

Equally, if you are not yet a client of SimplePay but would like to be, or if you’d like to know how we can take the effort out of filing and calculating payroll, get in contact with us or visit our website: www.simplepay.ie

Keep well and stay safe.

Team SimplePay