Wage Subsidy Scheme ends after 2 years of unprecedented support to employers

The Minister for Finance, Paschal Donohoe has noted that the Employment Wage Subsidy Scheme (EWSS) has now ceased for all businesses.

A wage subsidy scheme, the EWSS or its predecessor, the Temporary Wage Subsidy Scheme (TWSS), has been in place for over 2 years, since March 2020. These schemes have been a substantial and key part of the government’s response to the COVID-19 pandemic and played a vital role in maintaining the important link between employers and employees.

As part of Budget 2022, the government set out the future direction of EWSS, including its graduated exit strategy. These arrangements were subsequently enhanced on a number of occasions in response to the prevailing public health restrictions.

For most businesses, the EWSS ceased on 30 April 2022, while those businesses that were directly impacted by the public health restrictions of late December 2021, saw a 1-month deferral in the step-down arrangements. As such for the latter cohort of businesses, mainly in the hospitality sector, the scheme ended today.

The total level of support provided to date by the wage subsidy schemes is unprecedented at over €10.66 billion; €2.8 billion in respect of TWSS and €7.86 billion in relation to EWSS. This represents a substantial intervention by the Government that assisted in mitigating the effects of the pandemic on the economy. The TWSS supported 67,000 employers in respect of almost 690,000 employees. The EWSS supported 51,900 employers in respect of almost 744,000 employees.

Commenting on the end of EWSS, Minister Donohoe stated, “Today marks the end of the very successful Employment Wage Subsidy Scheme (EWSS), over 2 years after a wage subsidy scheme, the Temporary Wage Subsidy Scheme (TWSS), was first introduced in March 2020. The wage subsidy schemes played a crucial role in preserving employment and incomes and supporting businesses at a very challenging time during the pandemic.

“The success of the schemes is clearly evident by the employments supported, as well as how quickly our economy adapted and recovered following the lifting of public health restrictions.”

The Temporary Wage Subsidy Scheme (TWSS) was introduced on 26 March 2020, with the objective of supporting viable firms and maintaining the relationship between employers and their employees.

The TWSS was replaced by the Employment Wage Subsidy Scheme (EWSS) with effect from 1 September 2020. The EWSS continued to operate as an economy-wide support until the scheme ended on 31 May 2022.

The wage subsidy schemes have been a central pillar of the government’s response to the COVID-19 pandemic. The level of support provided by these schemes is unprecedented, with total support amounting to almost €10.65 billion.

Over the period the TWSS was in operation, 67,000 employers received subsidy payments of €2.8 billion in respect of 690,000 employees.

To date (31 May), overall support provided by EWSS is €7.86 billion, comprising direct subsidy payments of €6.83 billion and PRSI forgone of over €1.03 billion to 51,900 employers in respect of almost 744,000.

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