Pandemic wage subsidy to be phased out by end of April 2022

Minister for Finance Paschal Donohoe confirmed that the Employment Wage Subsidy Scheme (EWSS) for businesses affected by the Covid-19 crisis will be extended to the end of April, but supports from the programme will be phased out by then.

The estimated cost of extending the EWSS from November through April is in the region of €1.26 billion, according to Department of Finance figures published on Tuesday, after Mr Donohoe announced the extension in the Dáil as he unveiled Budget 2022.

While there will be no change to the current four rates of EWSS payments over the course of October and November, a two-rate structure of €151,50 and €203 will apply from December until the end of February, bringing it back into line with the programme’s original shape when it was set up in September last year to replace the so-called Temporary Wage Subsidy Scheme (TWSS).

For companies availing of the scheme that means a €151.50 subsidy for employees earning gross weekly amounts of between €151.50 and €202.99,

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while a €203 amount will apply to those on between €203 and €1,462. Weekly salaries below €150.50 and above €1,462 are not subsidised.

Meanwhile, payments under the scheme will fall to a flat €100 for March and April, Mr Donohoe told the Dáil .

A reduced rate of employers’ pay-related social insurance (PRSI) will no longer apply for the final two months of the programme, he said. The scheme, available to companies that have experienced a 30 per cent drop in turnover or orders from pre-Covid levels, will close to new employers from January 1st, 2022.

“These revised arrangements for EWSS strike a balance between helping those businesses which continue to need support, while recalibrating the scheme in light of the wider economic recovery,” Mr Donohoe said.

A total of €17.5 billion has been paid out to date to individuals, households and businesses under the Pandemic Unemployment Payment (PUP), the Employment Wage Subsidy Scheme (EWSS) and the Covid Restrictions Support Scheme (CRSS), according to the Government.

Retail Excellence, the largest representative body for the retail industry, one of the hardest hit sectors by the crisis, welcomed the extension of wage supports.

However, it said it was “disappointed that we have not seen additional supports such as online grants for businesses, particularly those with fewer than 10 employees who are in greatest need of assistance”.

It said that Brexit and rising shipping costs were also affecting the industry, with many facing “liquidation due to the extreme pressure they are under with regard to costs, debt and staffing issues”.

The director of the Small Firms Association (SFA), Sven Spollen Behrens, said that while Budget 2022 was “underwhelming for small businesses”, he said that the fact that there would be no “cliff edge on the EWSS” provided one of the few “chinks of light”.