Low take up of CRSS scheme

Figures published by Revenue last week show that up to 7 January 2021 a total of €173.3m has been claimed under the COVID Restrictions Support Scheme (CRSS). This is considerably lower than expected when the scheme was introduced in the Budget last October.

At that time, it was forecast that it would cost up to €80m for each week that the country was under Level 5 restrictions. Such restrictions applied for a six-week period up to 1 December, before being reintroduced at the end of December 2020. Additionally, some other businesses would have qualified at lower levels of restrictions.

It is not entirely clear why take-up has been lower than expected. One of the qualifying conditions is that the average weekly turnover of the business during a period of restrictions can be no more than 25% of the average weekly turnover in 2019 (‘turnover test’); it may be that many businesses have pivoted successfully to an online, or takeaway model in the case of restaurants, and therefore do not meet this criteria. Some of these businesses however are likely to be further impacted by the most recent restrictions which, for example now prohibit click and collect services.

There have also been criticisms that the scheme is too narrowly focused and that a number of sectors, including for example outdoor businesses that do not operate from fixed premises such as tour operators, market stalls, circuses and street entertainers, all of whom have been significantly impacted by the pandemic, do not qualify. Hotels were dissatisfied that for much of December 2020, the fact that they were allowed to open meant they did not qualify even though inter-country travel was precluded thereby impacting heavily on bookings.

Those factors alone however are unlikely to explain the reduced take-up. It may well be that many businesses that could avail of the scheme have either not considered the matter or have concluded that it is not worthwhile applying; the maximum weekly payment is €5,000 but is capped at 10% of weekly average turnover from 2019 so for many businesses the payment will be lower. 

For those that qualify however, the payments can represent a significant contribution to offset fixed overheads. The claims process is very efficient and Revenue are making payments within two to three working days of a claim being submitted. Furthermore, the scheme has been further enhanced recently with businesses that were closed again due to restrictions introduced on 24 December and 31 December 2020 qualifying for a double payment for two and three weeks respectively, and the introduction of an additional week’s payment (‘restart week’) when the business reopens. 

Another government support that businesses facing cashflow difficulties should explore is the COVID-19 Credit Guarantee Scheme (CGS). This €2bn scheme, which was brought in to provide low cost loans to businesses from €10k to €1m, has recently been extended to 30 June 2021. To date, the take-up of the CGS scheme has also been lower than originally anticipated. Given the attractive repayment terms and interest rates, this is somewhat surprising. It appears that many SMEs are cautious about taking on additional debt given the current environment. Our corporate finance team have worked with numerous clients and lenders to successfully structure loans via the CGS scheme and would be pleased to explore how it could suit your business.

Crowe’s CRSS calculator lets you work out if you meet the turnover test above and the level of payments that you can expect if you do qualify and our team would be pleased to discuss the matter with you in more detail.

Check if you are eligible for the scheme and calculate your weekly subsidy entitlement with our CRSS Calculator.

If you require assistance with any funding challenges or tax requirements you face as a result of the pandemic, please contact a member of our tax or corporate finance teams.