Press release
Minister Donohoe notes exit path for Employment Wage Subsidy Scheme
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Published on
Last updated on
The Minister for Finance, Paschal Donohoe has today (Thursday) reminded employers that the graduated exit path for the Employment Wage Subsidy Scheme (EWSS) has commenced. From 1 February 2022, most businesses, move to the reduced weekly rate of support of €203 per employee for the month of February, followed by the weekly flat rate subsidy of €100 per employee for the final two months of the scheme in March and April 2022.
As announced on 21 January 2022, businesses availing of EWSS that were directly impacted by the public health regulations of last December, will continue to receive the enhanced rates of subsidy for the month of February and the graduated step-down in subsidy rates will be delayed by one month with such firms continuing to receive support under the scheme until 31 May 2022.
Commenting today, Minister Donohoe said:
“The Employment Wage Subsidy Scheme represents a substantial and key part of this Government’s response to the current crisis. It has been an extremely successful policy intervention and one which has greatly assisted us in maintaining the link between employers and employees.
Without the support of EWSS, many businesses would simply not be in existence today and would certainly not be in a position to adapt as responsively as they have to the reopening of all sectors of our economy. The EWSS operates as a highly effective and responsive instrument. At the same time, we must seek to ensure it is withdrawn at the right time.
We are now shifting our focus towards the phased exit from the scheme, which is commencing this month for most businesses as they transition to the reduced rates of subsidy. Those businesses that were directly impacted by the most recent public health regulations of last December, will continue to receive the enhanced rates of support for the month of February and commence the transition to the reduced rates of subsidy from 1 March 2022.
As I said previously, it is important in everyone’s interest we exit from this scheme and I believe that now is the appropriate time to commence this transition.”
ENDS
Note to Editors
The EWSS represents a substantial and key part of the government response to the pandemic. As part of Budget 2022, the Government agreed the future of EWSS including its graduated exit strategy. These arrangements were subsequently enhanced in response to the public health situation, namely the extension of the enhanced rates of subsidy for a further two months (across December 2021 and January 2022) and the reopening of the scheme for certain businesses as announced on 9 and 21 December 2021 respectively.
A further enhancement was announced on 21 January 2022 for businesses that were directly impacted by the specific terms of the public health regulations introduced last December and those businesses will see a one month deferral to the graduated step-down arrangements. Employers applying for this enhancement are self-declaring to Revenue that they are eligible and meet the relevant criteria. Such employers may be subject to compliance checks by Revenue. It is anticipated that Revenue will accept such applications by the end of this week (Friday 4 February).
By its nature the EWSS is a demand-led scheme and the cost is driven by the number of employers and employees supported by the scheme. The latest data from Revenue (27 January) indicate that payments of almost €6.3 billion and PRSI credit of €976 million have been granted to 51,900 employers in respect of around 710,000 employees.
For the month of December (the latest available monthly data), 24,000 employers availed of EWSS in respect of almost 280,000 employees, receiving subsidy payments of almost €375 million and PRSI credit of over €55 million.
In terms of the breakdown of the support on a sectoral basis, the accommodation and food services sector (broadly the hospitality sector) has received EWSS payments of over €1.7 billion since the introduction of the scheme, accounting for the largest share across all sectors at 27.5%. The wholesale and retail trade sector received EWSS payments of around €780 million (12.4% of all payments), followed by the construction sector with EWSS payments of almost €523 million (8.4%).
Based on provisional data for December in terms of the number of employments supported by the EWSS, the largest beneficiary is the accommodation and food services sector (approximately 117,500 employments or 42%), followed by wholesale and retail trade (approximately 25,000 employments or 9%).
As announced by Government on 21 December, the EWSS would re-open for certain businesses and provide such businesses with the opportunity to re-qualify for the scheme where they meet certain conditions. Provisional data indicate that almost 250 employers have re-registered for EWSS in respect of almost 4,800 employees, the majority of whom are in the hospitality sector.