The employment wage subsidy scheme (EWSS) is being used by some recipients for “essentially robbery”, says the Revenue Commissioners.
Revenue chairman Niall Cody said the cases of fraud he has seen, which have been referred to the gardaí, are “not like normal tax evasion”.
Addressing the public accounts committee, Mr Cody said while any new payment system will lead to “unscrupulous acts”, the current EWSS is especially vulnerable to criminality as the employers and employees of newly-founded companies may apply.
“We are very concerned,” he said:
The EWSS, which is due to cease in April, is currently a source of controversy after its rates dropped by €50 per week on December 1, despite the ongoing chaos for the hospitality sector caused by the latest surge in Covid-19 cases.
About €321.4m was paid out under the scheme in November, to 23,600 employers and 275,000 employees.
A Revenue spokesperson told thethat all instances of fraud relating to the EWSS stemmed from “fake businesses claiming in respect of payment of wages to fake employees”.
It declined to confirm what amounts had been paid out to date, as all of the relevant cases remain under investigation by the gardaí and the Department of Social Protection.
Similar fraud had not been possible in the terms of the predecessor to the EWSS, the temporary wage subsidy scheme (TWSS), as that scheme had required employees to prove their presence on a company’s payroll prior to the onset of the pandemic.
Meanwhile, Tánaiste Leo Varadkar has said that any changes to either the EWSS or the pandemic unemployment payment (PUP) will be targeted to ensure only those who need the support will qualify.
Earlier, Irish Hotels Federation president Elaina Fitzgerald Kane said the hotel and guesthouse sector has seen €92m in cancellations due to Covid, stretching to January 10.
“It’s over €100,000 per hotel, which is profound,” she said.
Describing the EWSS cuts at the start of December as a “cliff edge”, Ms Fitzgerald Kane said: “It’s very difficult because in normal times, business in December would sustain the early months of the year.
“But these aren’t normal times, I suppose.”