EWSS – effect on company Directors

The recent extension of the TWSS in the form of the EWSS (Employment Wage Subsidy Scheme) from September 1, 2020 to March 2021 is to be welcomed.  The definition of “eligible employee” was expanded.  However, a closer look at the the legislation, Financial Provisions (Covid-19) (No. 2) Bill 2020 below, has serious implications for Company Directors who own more than 15% of the ordinary shares in their company (known as proprietary directors):

‘qualifying employee’, in relation to an employer, means—

(a) an individual who, in relation to the employer, is or was a specified

employee for the purposes of section 28, and

(b) an individual, not being an individual to whom paragraph (a)


who is on the payroll of the employer at any time in the qualifying

period and receives in that period a payment of emoluments from

the employer, but does not include

(i) in any case where the employer is a company, an individual who is

a proprietary director (within the meaning of section 472 of the

Act) of the company, and

(ii) in the case of paragraph (b), any individual who is connected with

the employer other than where that individual had been on the

payroll of the employer at any time in the period from 1 July 2019

to 30 June 2020 and had received in that period a payment of

emoluments from the employer,

and, for the purposes of this definition, the question of whether an

individual is connected with any other person shall be determined in

accordance with section 10 of the Act as it applies for the purposes of

the Capital Gains Tax Acts;


In plain English, proprietary Directors are excluded from the EWSS.  However, after an outcry about its inherent unfairness this provision will be reviewed and amended.

Employers will be required to register for the EWSS based on meeting certain criteria as detailed below:

Employer Eligibility

To be eligible to participate in the EWSS, the employer must be able to demonstrate to the satisfaction of the Revenue that, they their business have been significantly disrupted by reason of COVID-19. Specifically the employer needs to demonstrate at least a 30% decline (or such other percentage as the Minister for Finance may specify) in either the turnover of the employer’s business or in customer orders received during the period 1 July 2020 to 31 December 2020, as compared to the same period in 2019.

In cases where the business of the employee has not operated for the whole of the corresponding period in 2019, the following will apply:

  1. Where the business operations have commenced on or before 1 November 2019, the 30% decline test must be determined in 2020 by reference to the same reference period last year in which the business was in operation. For example, if the employer’s business commenced on 1 September 2019, then a 30% decline in the period 1 September 2020-31 December 2020 must arise as compared to 1 September 2019-31 December 2019.
  2. Where the business operations have commenced after 1 November 2019, the employer must be able to show that the turnover or customer orders during the period 1 July to 31 December 2020 will be at least 30% less than what the turnover or customer orders would have been had there been no disruption caused by COVID-19.

While the introduction of a further wage support scheme is welcomed, the reference period for eligibility of 1 July to 31 December 2020 is likely to be a disappointing condition for many employers who may have suffered significantly as a result of COVID-19 in the first half of 2020 and are now expected to need a further 30% decline in the second half of the year in order to avail of any government wage supports from 1 September.

Helpfully, under the new EWSS, there is no requirement for the employer to have to demonstrate an inability to pay wages which caused significant confusion and uncertainty amongst employers under the TWSS.

The Bill provides that Revenue will publish guidelines to assist employers in determining whether the reduction in turnover/customer orders will occur by reason of COVID-19 and the disruption that COVID-19 is causing to business.

Any employer who is entered in the register established and maintained under the Child Care Act 1991 will be considered eligible for the scheme without having to satisfy the reduction in turnover or customer order tests. This would include pre-schools, play groups, creches and other services catering for pre-school children in addition to creches etc that cater for primary school children.

In order to be eligible for the EWSS throughout the entire period, the employer must be entitled to a tax clearance certificate.

The Bill requires employers to review their eligibility criteria at the end of each month for July to March 2021. If as a result of the review, it transpires that the employer does not meet the eligibility criteria they should withdraw themselves from the scheme on ROS with effect from the first day of the following month.

Eligible Employees

Any employee who was considered an eligible employee under the existing TWSS provisions will also be considered an eligible employee for the EWSS.

The new EWSS extends the definition of eligible employee to now include an individual who is on the payroll of the employer at any time in the “qualifying period” i.e. at any time between 1 July 2020 and 31 March 2021. This does however exclude an individual who is a proprietary director of the company and someone who is connected with the employer (unless such connected person was on the payroll of the employer between 1 July 2019 and 30 June 2020 and received pay from the employer during that time).

Previously, with a small number of limited exceptions, an employee was only considered eligible for the TWSS where they were included on the employer payroll on 29 February 2020.

The extension of the EWSS to seasonal workers and new hires is a very welcome development, particularly to those sectors such as hospitality or other seasonal businesses who perhaps were closed in February 2020 or operating at a reduced capacity.

Rates of subsidy payable

Under the EWSS, eligible employers will receive a per-head subsidy on a flat rate basis which will be determined based on the amount of gross pay that the employer pays to the eligible employee as follows:

Gross Pay

Subsidy Payable



€151.50 – €202.99

€151.50 per week

€203 – €1,462

€203 per week



The rates payable under the new EWSS have been simplified considerably compared to the rates payable currently under the TWSS. Under the existing TWSS, those employees with gross pay in excess of €960 per week are not eligible for the subsidy. This upper gross pay limit has been increased to €1,462 under the new scheme. However, a lower gross pay limit of €151.50 is now provided for which doesn’t exist under the TWSS.

For comparative purposes, we have included the TWSS rates below.

Employees previously earning up to €586 net per week

Average net weekly pay


Up to €412

85% of AWNP, up to a max of €350

Between €412 to €500

Flat rate of €350 

Between €500 to €586

70% of AWNP, up to a max of €410

Employees previously earning in excess of €586 net per week

Gross top up payment

Subsidy available

Up to 60% of ANWP


More than 60% but less than 80% of ANWP


More than 80% of ANWP


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