The Government’s new Employment Wage Subsidy Scheme came into effect at midnight, and will continue to provide payroll support until the end of March 2021.
It will replace the current Temporary Wage Subsidy Scheme, which is underpinning the wages of almost 370,000 employees.
The TWSS, which was launched last March, assisted many businesses to survive the Covid-19 pandemic.
Its replacement – the new Employment Wage Subsidy Scheme – will be welcomed, though the criteria is tighter.
The TWSS required a drop in turnover of at least 25% to qualify.
It paid up to €410 per week in subsidies per worker earning less than €76,000 a year, and delivered the actual money within 48 hours.
However, businesses qualifying for the new scheme must have a drop in turnover of at least 30%, and the top subsidy rate is significantly lower at €203.
Employers are concerned that there will be time-lag of up to six weeks to receive subsidy payments, which could cause cash flow pressures.
In addition, they will also have to prove they are tax compliant before they can avail of the Government aid.
It remains to be seen how many employers will ultimately transition to the new scheme, and how many jobs it will save.
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