Ireland's Department of Finance issued a release on 21 January 2022 regarding the government's agreement to extend and clarify certain COVID support schemes, including the Employment Wage Subsidy Scheme (EWSS), the Covid Restrictions Support Scheme (CRSS), and the Tax Debt Warehousing Scheme.
Minister Donohoe announces changes to economic supports for businesses most impacted by recent public health restrictions
The Minister for Finance, Paschal Donohoe has today (Friday) announced changes to a number of the COVID support schemes available to businesses, in particular for those businesses that were most severely impacted by the public health regulations introduced last December.
An extension to the Employment Wage Subsidy Scheme (EWSS) to support those businesses and a number of clarifications in relation to the Covid Restrictions Support Scheme (CRSS) and Tax Debt Warehousing Scheme were agreed by Government at the Cabinet meeting today.
The legislative aspects associated with these changes will be addressed by primary legislation to be introduced in the coming weeks. In the meantime Revenue will update its guidance on each of the schemes shortly.
As part of Budget 2022, the government set out the future direction of EWSS including its graduated exit strategy. These arrangements were subsequently enhanced in response to the public health situation, namely the extension of the enhanced rates of subsidy for a further two months (across December 2021 and January 2022) and the reopening of the scheme for certain businesses as announced on 9 and 21 December 2021 respectively.
The government agreed today that businesses availing of EWSS that were directly impacted by the public health Regulations introduced last December, will receive additional support under the scheme for a further month to assist these businesses as they fully reopen and emerge from the restrictions.
Such businesses will continue to receive the enhanced rates of subsidy for the month of February and the graduated step-down in subsidy rates, as previously announced, will be delayed by one month with such firms continuing to receive support under the scheme until 31 May 2022.
From 1 February 2022, most businesses, apart from those that were directly impacted by the public health restrictions of last December, will move to the reduced rate of support of €203 per employee, followed by the flat rate subsidy of €100 per employee for the final two months the scheme of March and April 2022.
It should be noted that the full rate of Employers' PRSI will be reinstated with effect from 1 March 2022 for all businesses, as announced in Budget 2022 and legislated for in the Social Welfare Act 2021.
Tax Debt Warehousing Scheme
In relation to the Tax Debt Warehousing Scheme, and the decision by Government last month, to extend the period where tax liabilities arising can be warehoused to the end of Q1 2022, for all taxpayers eligible for COVID-19 support schemes, it has now been agreed that this date will be extended to 30 April 2022 to facilitate the two monthly VAT return for March/April.
A number of clarifications were noted in relation to the CRSS as follows:
The Minister for Finance, Paschal Donohoe TD said:
"Today is an important day for our society and economy as we seek to ease the public health restrictions and reopen all sectors of our economy. The EWSS has been extremely successful in maintaining employment across the whole of our economy during this pandemic.
"It is now time to adjust our focus towards an exit from the scheme in a structured and orderly way. This is important in everyone's interests - businesses, employees, the wider body of taxpayers – as the scheme cannot continue indefinitely. As such, most businesses will move to the reduced rates of EWSS subsidy from the 1st February 2022 onwards and continue on the exit path as previously announced until the scheme closes on 30 April 2022.
"However, I intend to provide additional support to those businesses that were directly impacted by the most recent public health regulations. Affected businesses will continue to receive the enhanced rates of support for a further month and the exit path from the scheme for such businesses will be delayed by a month.
"CRSS has been an important and successful support payable at times when businesses most needed additional help with their fixed costs, and has provided some €717 million in direct payments in respect of over 25,000 business premises since its introduction and over €13.4 million in payments to businesses directly impacted by the latest public health restrictions in place since 20 December.
"The facility to avail of the Tax Debt Warehousing Scheme has also offered valuable and practical liquidity support to businesses in difficult trading periods during the pandemic. The objective of this scheme is to allow firms some help to recover, thereby helping to guarantee their long-term economic viability and survival. This further extension will allow businesses who have been most impacted some additional time to recover before their tax liabilities have to be paid. Their period of zero interest will continue until 30 April 2023, with interest at the reduced rate of 3% p.a. payable thereafter until the debt is paid down."