Wage Subsidy Scheme

by admin admin No Comments

Update to Temporary Wage Subsidy Scheme

Following the announcement by the Minister for Finance, Revenue have now put in place a change to the Temporary Wage Subsidy Scheme to include employee’s returning to work following a period of leave.

Previously, where an employee was returning to work after maternity, adoptive, paternity or parental leave or having received benefits from DEASP, they were not included on payroll on the 29th February or paid in January or February 2020 and therefore did not qualify for the Temporary Wage Subsidy Scheme or only qualified for a reduced subsidy.

Employee’s now returning to work after the below leave can now be included in the scheme;

  • Maternity leave, adoptive leave, paternity leave, parental leave or related unpaid leave or
  • Being in receipt of health and safety or Parent’s benefit paid by the DEASP for February 2020 or
  • Being in receipt of illness benefit paid by the DEASP for February 2020

An employer can now request for Revenue to treat the employee as an eligible employee for the purposes of the scheme and the subsidy will be backdated to the date of recommencement of employment, or from 26th March, whichever is latest.

While you are here, Read more of our Covid-19 update blogs here

by admin admin No Comments

Changes to Covid-19 Wage Subsidy Scheme

Revenue have now issued confirmation of key changes made to the Covid-19 Temporary Wage Subsidy Scheme as announced by Minister of Finance, Paschal Donohoe.

Who does this apply to?

This will apply to all those earning up to €500 per week / €31,000 approx. per year and for those earning over €586 per week / €38,000 approx. per year. There is no change to the qualifying criteria for employers to the scheme.

The key changes are as follows;

  • 85% subsidy available for employees whose previous average net weekly income did not exceed €412
  • No tapering of the 85% subsidy will apply for those in receipt of it, where the employer makes a ‘top-up’ payment of more than 15% of the employee’s previous pay, to bring it in line to €350 net per week.
  • A subsidy of up to €350 per week to be made payable to all employees whose previous average weekly net pay was between €412 – €500
  • If an employee’s previous weekly net pay exceeded €586 a tiered approach will now apply which takes into account the amount paid by the employer. A maximum subsidy of €350 per week available with a tiered approach.
  • For all employees with a weekly net pay exceeding €960 / €76,000 per year, there is no subsidy available. However, if their net pay is now reduced by 20% as a result of Covid-19, then they will qualify for a subsidy of €205. If their net pay is now reduced by 40% they will qualify for a subsidy of €350.

When does this commence?

From 4th May, this scheme will be fully operational for all payroll submissions to Revenue. The transitional wage subsidy scheme will remain in place until that time.

To recap, there were 2 phases to the Wage Subsidy Scheme;

Phase 1 –

Transitional phase that adds onto the Employer Refund Scheme in effect since 15th March 2020, under which the employer got a refund of €203 per week per employee it kept on payroll. The subsidy scheme is increasing this to €410 maximum regardless if the employer makes an additional payment to the employee or not.

Phase 2 –

The scheme is aiming to be in operation no later than 20th April 2020 and subsidies paid to each employee will be based on their average net weekly pay, subject to the maximum weekly amounts. There will be further updates on this Phase issued shortly.

While you are here, Read more of our Covid-19 update blogs here

by admin admin No Comments

Covid-19 Wage Subsidy Scheme

What is it?

It will be operated by employers through their payroll system, therefore ensuring employees will be in receipt of the subsidy payment along with their weekly employer contribution of wages, with effect from 26th March 2020.

What are the key elements?

Where the employer’s business has been adversely affected by Covid-19, the subsidy scheme will provide income supports to their employees. The subsidy will be included as part of the employees’ wages in addition to the amount the employer would be able to pay. The subsidy payment will be stated seperately on an employees payslip as ‘Non-Taxable Pay’

It is open to all employers that can show that the Covid-19 Pandemic has led to a minimum 25% decline in actual or predicted turnover, resulting in difficulties in meeting outgoings and paying wages. Further conditions are due to be clarified by Revenue shortly.

Employer Refund Scheme

This scheme now supersedes the Employer Covid Refund Scheme as it;

  • Increases the maximum non-taxable refundable payment to €410 or 70% of the employee’s Average Net Weekly Pay if less than €410 for employees earning less than or equal to €586 per week net.
  • Increases the maximum non-taxable refundable payment to €350 or 70% of the employee’s Average Net Weekly Pay if less than €350, for those earning over €586 per week net and less than or equal to €960 per week net.
  • Allows the payment by employers of additional taxable payments.

Employers that had already registered for the Employer Refund Scheme and may have received refunds are eligible for this scheme. They are not required to apply again. Revenue will confirm with the employer that they meet the new conditions.

Phasing in the Wage Subsidy Scheme

There will be 2 phases to this scheme;

Phase 1 –           transitional phase that adds onto the Employer Refund Scheme in effect since 15th March 2020, under which the employer got a refund of €203 per week per employee it kept on payroll. The subsidy scheme is increasing this to €410 maximum regardless if the employer makes an additional payment to the employee or not.

Phase 2 –           The scheme is aiming to be in operation no later than 20th April 2020 and subsidies paid to each employee will be based on their average net weekly pay, subject to the maximum weekly amounts. There will be further updates on this Phase issued shortly.

‘Top-Up’ Payments

In Phase 1, an employer may choose to make a taxable payment to their employee(s) to make up the 30% difference between the 70% of the average net weekly payment issued by the subsidy scheme and the employee(s) normal average net weekly wage.

If the employer makes a taxable payment greater than the 30% difference, the subsidy amount due to be refunded to the employer will be reduced by the extra payment.

The employer is not required to make this ‘top-up’ payment to his employee(s) to be eligible for the scheme but it is hoped that employers will attempt to keep their employees income as close to 100% as possible. There is also no minimum payment but when running payroll, an employer will need to enter €0.01.

How do Employers Register for the Scheme?

Employers or their agents need to apply directly to Revenue.

Re-hiring of staff

If an employer has already laid off their employees as a result of Covid-19, they can be placed back on payroll and qualify for this subsidy providing that they meet the criteria and were on payroll at the end of February

Duration of Scheme

The Wage Subsidy Scheme is due to be in operation for 12 weeks.

While you are here, Read more of our Covid-19 update blogs here

Top