26 August, 2020
The Revenue Commissioners have issued guidelines on the operation of the recently announced Employment Wage Subsidy Scheme (EWSS). For information on our initial analysis of the Scheme following its announcement, please refer to our previous article.
The key guidelines confirm that registered eligible employers will receive a flat-rate subsidy in respect of eligible employees and a reduced employer PRSI rate of 0.5% will apply.
The EWSS will come into effect on 1 September, 2020. Employers who wish to avail of the EWSS will be required to undertake a separate registration with the Revenue Commissioners through the Revenue Online System (ROS). Registration for the Scheme opened on 18 August 2020.
It will be necessary to meet the following requirements in order to register for the Scheme:
Revenue has confirmed that registrations cannot be backdated and subsidy claims can only be made once registration has occurred. Employers who operate payroll weekly may need to consider registering as soon as possible to ensure that they can claim the subsidy in respect of the first pay period in September.
In order to qualify for the subsidy, Revenue has confirmed that an employer must be able to demonstrate the following:
Turnover in the context of the EWSS is to include all sources of trading income, including sales, donations and State Funding. Revenue will typically review the reduction in turnover as it applies to the business as a whole. However where a part of the business is formally structured into a business unit(s), and one (or more) business unit(s) suffers a 30% decline in turnover or customer orders, that unit may qualify for the EWSS. Revenue has indicated that they are likely to examine such cases carefully.
Where an employer seeks to meet the eligibility criteria based on a reduction in customer orders, Revenue have provided guidance in respect of the factors indicative of such a decline for different businesses. These include:
If, due to the nature of the business, a 'turnover' or 'customer order' model is inappropriate, Revenue will consider an alternative 'reasonable' basis, subject to their prior agreement and where it can be demonstrated that the disruption to business was as a result of COVID-19.
The subsidy will be available in respect of employees on the employer's payroll and in receipt of gross weekly wages of between €151.50 and €1,462. An employee's gross wage is that which is reported on the payroll submission and is inclusive of benefits in kind but before deductions such as pension and any salary sacrifice arrangements.
Revenue's systems will calculate the subsidy by reference to the eligible employee's gross wage, their pay frequency and their insurable weeks. Individuals with a pay frequency greater than monthly will not qualify for the EWSS.
The following payroll issues should be noted:
Once an eligible employer has submitted the payroll notifications to Revenue for a month, Revenue will calculate and notify the subsidy amounts due to the employer by the 5th day following the month end. If necessary, employers can amend their submissions up to the payroll return filing date (i.e. the 14th day following the month end). Subsidy payments will be issued to employers as soon as possible after the 14th.
Revenue has indicated that they will actively review the operation of the EWSS. The key aspects to bear in mind are:
Where an employer, in good faith, entered into the EWSS and following a monthly review forms the view that they no longer qualify for the Scheme and de-registers, Revenue have confirmed that any subsidies claimed in accordance with the Scheme will not be repayable.
The guidelines deal with a number of miscellaneous matters. These include:
The EWSS is substantially different to its predecessor, the TWSS, and its implementation may prove complex for your organisation. Should you have any queries regarding how the EWSS may apply to your business, please reach out to your usual PwC contact or any member of the team below.