The economic fallout from COVID-19 continues to impact almost every area of society. The Government recently published its medium-term strategy for living with COVID -19.
This is part of the Government's ongoing recognition that we will be living with the pandemic for some time to come. Below we review some of the most recent Government employment supports designed to aid struggling businesses and those who have lost their jobs.
Employment Wage Subsidy Scheme
The Employment Wage Subsidy Scheme (EWSS) replaces the Temporary Wage Subsidy Scheme (TWSS) from 1 September 2020. The EWSS forms part of the July Stimulus Package and the Financial Provisions (COVID-19) (No 2) Act 2020 provides the legislative status for the revised scheme. It is expected to run until April 2021.
The EWSS is an economy wide enterprise support that focuses primarily on business eligibility. It comprises two key elements:
- It provides a flat rate subsidy to qualifying employers based on the number of eligible employees on the employer's payroll and gross pay to employees; and
- A reduced rate of employer PRSI of .5% of wages paid which are eligible for the subsidy payment
Some of the other notable changes to the revised EWSS include:
- An employer must still be able to show that its business has been significantly disrupted due to COVID -19. An employer no longer needs to be able to demonstrate an inability to pay wages which was a prerequisite under the TWSS. The Revenue will publish guidelines to assist employers in determining whether the reduction in turnover/customer orders is a result of COVID -19 and the resulting disruption to business.
- Another change is that the EWSS will also apply to new hires, seasonal workers and proprietary directors subject to certain conditions.
- Unlike the TWSS, employers will need to have a valid tax clearance certificate and maintain tax clearance for the duration of the scheme to be eligible for EWSS.
One of the key concerns about the new scheme is the processing of claims on a monthly rather than weekly basis. Employer bodies have voiced concerns that this could lead to a cashflow problem if staff are paid on a weekly basis as there may be a five to six-week delay in the processing of payments. Employers may need to revise their cash flow estimates to ensure they have enough cover.
Suspension of right to claim redundancies
The restriction on the right to claim redundancy has been extended again, until 30 November 2020. It was due to expire on 17 September. This is the fourth extension since the pandemic started with the Government stating the continued suspension is necessary to protect businesses, avoid insolvency and prevent permanent job losses. The extension only applies to the trigger date for redundancies where an employee has been laid off or put on short time. All other redundancy provisions including notice periods still apply.
Pandemic Unemployment Payment (PUP)
Despite speculation to the contrary the Pandemic Unemployment Payment ( PUP) remains open to new entrants until the end of 2020. It had been due to close on 17 September however the latest development means that anyone who loses their job as a result of the pandemic after 17 September will be able to avail of the PUP at the appropriate rate. The PUP rates change to three rates from 17 September with a graduated payment scale depending on earnings of €203, €250 and €300 per week. The rates are due to change again on 1 February 2021 and 1 April 2021.