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Emergency Measures in the Public Interest (Covid-19) Act 2020: Motion (Continued)

Wednesday, 3 February 2021

Dáil Éireann Debate
Vol. 1003 No. 7
Unrevised

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(Speaker Continuing)

[Deputy Marian Harkin: Information on Marian Harkin Zoom on Marian Harkin] I ask the Minister to examine that again.

Second, under level 5 many businesses can be reasonably sure that their turnover will drop by 30% or more. However, there are some businesses, such as independently owned local retailers and so forth, that find it hard to forecast by how much their turnover will drop. I wrote to the Minister's office and the office responded by saying it is on an opt-in, opt-out basis, month by month, so businesses do not have to forecast, which would be impossible. I appreciate that. However, there is another issue. What happens if a business realises that its turnover dropped by more than 50% last month or in the previous month? I ask the Minister to put in place the same flexibility to allow business to claim retrospectively. I am not referring to last March or April, but at least for one, two or even three months whereby those businesses could claim retrospectively if there had been a sudden drop. That is not unreasonable.

The third issue has been raised by many Deputies. It is the issue of extra tax liability for recipients of EWSS. That is a very sore point for many workers. This tax is calculated on net pay, not gross pay. I raised this matter as far back as 20 May last with the Minister for Social Protection. I also raised it with the Minister for Finance, Deputy Donohoe, on 28 May. I was told it will not be an issue for most workers and for those who would have to pay extra tax, the Revenue Commissioners would be very flexible and the tax would be minimal. I was made aware of a person working in a bakery, who has worked daily since last March. That person received a tax bill for €1,200 yesterday. The person received the normal wages since March and is now faced with this tax bill. Yes, the person has four years to pay it, but the person still must pay it. As we speak, that person is accruing further tax liability, week after week. This could continue for the next six months, so the person will receive another tax bill this time next year. Even if the person is given four years to repay it, there will be double payments for three years. If the Minister cannot change what has happened up to now in regard to the taxation of workers on EWSS, he can change what is happening now to ensure they will not be paying back for the first year what they owed for 2020 and then paying double payments for three years.

Minister of State at the Department of Finance (Deputy Sean Fleming): Information on Sean Fleming Zoom on Sean Fleming I welcome this debate and thank the 20 Deputies who contributed to it, covering a large number of issues. In the first instance, everybody recognises that the wage subsidy schemes, the earlier one and the current one, have been a central pillar of the Government's response to the economic impact of Covid-19 by supporting viable firms and encouraging employment. To that end, it is an important bridge between social welfare payments such as the pandemic unemployment payment and regular employment, which is the ultimate goal. To the maximum extent possible, the objective is to maintain a position where as many employees as possible who are currently on EWSS retain their link with their employers, rather than migrate to the pandemic unemployment payment and lose their connection with their employers as a result of going on a payment from the Department of Social Protection. As the restrictions are eased, the EWSS will also play an important role in getting people back to work, thereby reducing the numbers depending on the PUP.

I will mention some of the issues that were raised in this debate on the employment wage subsidy scheme. One was the difficulties relating to mortgages. It was interesting that early in the debate a Sinn Féin Member said there are people on the scheme who perhaps would prefer to go for redundancy after being on the scheme for so many months. A subsequent speaker from the same party said that people on the scheme were having difficulty getting mortgages. That shows the difficulties that arise with this issue. The Government's position recognises the difficulties. A third suggestion was made by Deputy O'Connor, that perhaps there should be an onus on employers to notify all their employees officially if they are claiming the EWSS.

Everybody wants to get support to get mortgage approval, but if people are in a company that has suffered a severe reduction in turnover there might or might not be a question regarding its future viability. I doubt anybody wishes to take on the debt of a large mortgage for the rest of his or her life unless he or she is quite sure he or she will be in a position to pay it when the pandemic has ended. While it is creating short-term difficulties, there could be a worse situation if people are given large mortgages and then find they have severe difficulties with those mortgages as a result of the employer not being in a position to maintain their employment in the long term. There is a balance to be struck here. I understand it is very difficult and it will certainly cause delays in people completing house and property purchases. There is no blanket ban or delay on mortgages. Each case is examined on a case-by-case basis, which is appropriate. All mortgage applications should be examined in that way.

Other Deputies said this is a great scheme, that it should be part of the permanent landscape in Ireland and that it should be worked into short-time working arrangements, as may happen in other countries. Practically every Member welcomed the existence of the scheme, and spoke about its importance and the necessity for the scheme. They welcomed the extensions that are being made. The Minister made it clear that there will be no cliff edge situation with it coming to an abrupt end. People are looking for certainty about what will happen later in the year, but nobody can make any absolutely certain statements on how the Covid-19 pandemic will develop. Ultimately, until we have a vaccine there will be always significant issues.

Other Members mentioned the CRSS, which is not the subject of today's debate. The Department of Enterprise, Trade and Employment is examining a situation to help businesses that were not open to the public, such as the wholesale bottlers that were mentioned in the debate, and to see if some other arrangement can be made. There is a variety of other schemes, and that Department is examining that issue at present. I believe the issue of premises that pay rates will come into that. Businesses that were not open to the public and are suffering due to not being eligible for CRSS might have an opportunity to get into a new scheme.

I am sorry I do not have time to deal with all the issues that were raised. If Deputies wish to get further clarification, they should contact my office directly and I will be happy to get direct replies to them. As I said, more than 20 Members contributed to the debate and I thank them for their generally supportive comments. I am not able to address every query in the time available, but I will be happy to do so one-to-one if Deputies wish to contact me. I commend the order to the House.


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