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Businesses to receive up to €10,000 per month under winter energy support scheme

The scheme will cover 40% of a business’s increase in electricity or gas bills from 2021.

Image: Alamy Stock Photo

Updated Sep 27th 2022, 3:36 PM

MINISTER FOR FINANCE Paschal Donohoe has today announced an energy support scheme for businesses during the winter, with the government paying up to €10,000 a month.

Earlier this afternoon the minister said that small and medium businesses were the backbone of Ireland’s economy and require a range of supports for the current energy crisis.

The Temporary Business Energy Support Scheme (TBESS) will be open to businesses that have seen an increase in their average energy unit price of 50% or more from 2021.

Once eligibility criteria are met, the support will provide 40% of the amount of the increase in the business’s energy bills.

The scheme’s payments will be backdated to September and run until at least February.

Tánaiste and Minister for Enterprise and Trade Leo Varadkar said that the payment will be backdated to September, with the intention to have the first payments in November. 
The scheme will cost approximately €1.2 billion and will be administered by the Revenue Commissioner under a self assessment basis.

“Businesses will be required to register for the scheme and to make claims within the required time limits. It is proposed that the scheme will operate by comparing the average unit price for the relevant bill period in 2022 with the average unit price in the corresponding reference period in 2021,” Donohoe said.

A monthly cap of €10,000 euro will apply and businesses will receive their first payment in November.

He said the Government will be monitoring how cross border businesses are operating under a different support system that is in the south, but he added that the issues with Sterling is likely to cause more problems.

People could be going north of the border for groceries and coming south for diesel, he said, adding that it is not the first time that has happened. 

The Government will have to see “how it evolves” and the effect of the currency issues, he added.

Donohoe added that the scheme was designed to be compliant with the EU state aid Temporary Crisis Framework and will need approval by the EU Commission in advance of making payments.

“This is a significant intervention by the government in the Irish economy to protect employment. This scheme forms a large part of our wounds of measures.

“We must weaken the ability of a shock to income becoming a loss of jobs. And this new policy would help employers with their rise in bills and help to save their businesses,” he told the Dáil.

Labour has slammed the scheme, calling it a “license to print money” for energy companies.

“The TBESS is an undercooked eleventh hour measure, and it really shows. The details are sketchy and it is simply back of the envelope stuff. It is alarmingly clear that lessons have not been learned from previous support schemes. 

Labour finance spokesperson Ged Nash said:

“Rather than cap the price of energy and guarantee the jobs and wages of workers, the new TBESS will in effect indirectly subsidise profiteering energy companies. 

Business groups have reacted to the scheme, claiming that a payment of 40% of a bill’s increase won’t do enough to protect employers.”

He also claimed that further increases in energy prices during the winter could drive the cost of the scheme up to €2 billion.

The managing director of Retail Excellence, the largest representative body for the retail industry in Ireland, said:

“We welcome the fact that there has been an intervention in the energy crisis with targeted supports and that many people will have more money in their pockets to spend, but we will have to examine the qualifying criteria for the energy support scheme in more detail.

“It remains to be seen whether this will be sufficient for many businesses who have been crippled by rising costs this year,” Duncan Graham of Retail Excellence said.

Donohoe also announced other, more targeted measures to benefit businesses today.

Manufacturing and export firms impacted by the war in Ukraine will have €200 million of supports available to them under the Ukraine Enterprise Crisis Scheme

These include extending the Special Assignee Relief Programme until 2025, but increasing qualifying income to €100,000.

The SARP programme provides tax relief to certain people who are assigned to work in Ireland from abroad.

The minister is also extending the Knowledge Development Box – which encourages companies to develop intellectual property in Ireland – for a further four years.

The film corporation tax credit will be extended beyond the current end date of 2024, until December 2028.

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