Employers pay back €106m of wage subsidies to Revenue

Minister for Finance Paschal Donohoe says 3,733 companies have repaid some or all of their EWSS payments

Paschal Donohoe: ‘It is highly likely that the vast majority of employers who have claimed Covid-19 wage supports have not had the wherewithal to pay dividends during the period of the pandemic.’   Photograph: Gareth Chaney /Collins Photos

Nine companies recently repaid an aggregate €21 million in Covid-19 wage supports to Revenue after voluntarily removing themselves from the State’s main pandemic wage support scheme, according to new figures provided by Minister for Finance Paschal Donohoe.

The Minister also disclosed that another seven employers voluntarily partially withdrew from the Employment Wage Subsidy Scheme (EWSS) and repaid just over €4.5 million.

In a written Dáil reply, Mr Donohoe said: “A total of 402 employers have repaid in full all subsidies claimed since the EWSS began, totalling approximately €52 million, with an additional 3,331 making partial repayments totalling approximately €54 million.”

He stated that another 860 employers had refunded €10.9 million in Temporary Wage Subsidy Scheme (TWSS) payments after they found that they were ineligible or their business performance was better than they expected when they entered the schemes.

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The Minister said Revenue had audited 212 registered companies under the EWSS up to December 31st, 2021. He stated that 77 of these audits have been finalised, yielding almost €1.5 million in payments while 135 were ongoing.

“An additional 5,594 registered employers have been subject to a compliance check under the compliance programme to December 31st, 2021,” he said.

“Overall, Revenue has finalised EWSS-related interventions with 3,500 employers, recouping €19.2 million, which equates to 0.3 per cent of the total subsidy paid. There are further compliance checks with 2,306 employers ongoing, which will be finalised in due course.”

In addition, Mr Donohoe said Revenue had completed compliance assessments of employers claiming the EWSS. “There are currently 60 assessments raised for the amount of €5.1 million, of which four have been appealed (to the Tax Appeals Commission) for the amount of €1 million.”

In Dáil replies to Ged Nash of the Labour Party and Brendan Griffin of Fine Gael, Mr Donohoe said some €7 billion had been paid by the State under the EWSS, of which €6.1 billion was a direct subsidy, and PRSI forgone amounted to €956 million for 51,900 employers in respect of 706,700 employees.

Dividends

On the issue of companies paying dividends while claiming the EWSS, Mr Donohoe told Mr Nash: “It is highly likely that the vast majority of employers who have claimed Covid-19 wage supports have not had the wherewithal to pay dividends during the period of the pandemic.

“It is not readily apparent to me what impact an outright ban on dividend payments, or indeed a cap on such payments, would have had on the employment prospects of those 700,000 employees whose employers have been supported by EWSS payments.”

Last month The Irish Times revealed that O’Flaherty Holdings, which distributes Mercedes Benz in Ireland, had claimed almost €1.8 million in wage subsidies in 2020 before then paying a similar amount in a dividend to an offshore company.

It later emerged that other companies had done the same thing, and this led to calls for a ban on dividend payments for companies availing of the wage subsidies.

Mr Donohoe said there was no impediment to participating employers paying dividends to shareholders “and this is a business decision for a company to take based on its financial circumstances”.

“The overwhelming majority of companies that have participated in the wage subsidy schemes did so because they genuinely believed they would need support at that point based on the effect of the pandemic on their business.”

Gordon Deegan

Gordon Deegan

Gordon Deegan is a contributor to The Irish Times