Q&A: What will the U-turn on wage supports mean for my business?

Q&A: What will the U-turn on wage supports mean for my business?

The Government has announced a reversal of cuts to the Employer Wage Subsidy Scheme (EWSS), backing down on a heavily-criticised reduction for businesses which came into effect alongside new Covid restrictions.

Finance Minister Paschal Donohoe and Public Expenditure Minister Michael McGrath made the announcement on Thursday in light of the new restrictions on hospitality announced last week.

What was supposed to happen?

From last week until February 28, 2022, the original two-rate subsidy of €151.50 and €203 would apply, with the enhanced rate abolished and a targetted version of the Covid Restrictions Support Scheme (CRSS) implemented instead. For March and April 2022, a single flat rate of €100 will apply and the reduced rate of Employers’ PRSI will be re-instated for these two months.

What is happening instead?

Instead the enhanced rate, which sees subsidies of up to €350 made available to pay staff, will be reintroduced. Revenue has confirmed that all eligible EWSS payroll submissions received from Friday onwards will be processed using the enhanced subsidy rates. Employers who have already submitted their EWSS submissions for this month, some of whom may have already received the lower subsidy rate, do not need to take any action or make any amendments, Revenue said.

From February 1, 2022, the original two-rate structure of €203 per week and €151.50 per week will apply; for March and April 2022 the flat rate subsidy of €100 per week will apply and the scheme will end on 30 April, 2022. The scheme is open to businesses which have suffered a 30% loss in business.

Why the change of plan?

According to Mr Donohoe, a targeted scheme may be possible, but not before Christmas.

“Upon further analysis of the proposal by my Department and the Revenue Commissioners, it became clear that it would be complex to develop an appropriate and effective scheme in the immediate term.

“Instead, I have decided to extend the enhanced rates of EWSS for the months of December and January to give certainty to businesses when

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