Written answers

Wednesday, 20 May 2020

Department of Finance

Covid-19 Pandemic Supports

Photo of Mick BarryMick Barry (Cork North Central, Solidarity)
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72. To ask the Minister for Finance if he will consider an adjustment to the Covid-19 wage subsidy payment to allow for more flexibility to include those workers that had just commenced employment in the weeks prior to the crisis; if the average wage calculation for those workers could be calculated on a period other than January to February; and if he will make a statement on the matter. [5871/20]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The legislation underpinning the Temporary Wage Subsidy Scheme (TWSS) is contained in Section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020. Of necessity, the legislation and the scheme itself were developed very quickly to support the urgent Government objective of getting much needed assistance to employers and employees that have been seriously affected by the pandemic.  

The TWSS builds on data returned to Revenue through its real-time PAYE system. It must be accepted that the underlying legislation and the scheme itself simply cannot be tailored to meet every individual unique set of circumstances for either employers or employees.

The core principles of the scheme, as prescribed in the underlying law, are that –

- the business is suffering significant negative economic impact due to the pandemic,

- the employees were on the payroll at 29 February 2020, and

- the employer had fulfilled its PAYE reporting obligations for February 2020 by 15 March 2020

The changes to Revenue’s systems required to fully implement the TWSS have been delivered incrementally since the scheme commenced on 26 March 2020. The latest phase of the scheme implements the revised subsidy rates, as determined by me, in accordance with the legislation and is effective from 4 May 2020 for most employees. This phase is based on providing employers with details of the maximum personal subsidy amount to be paid to individual employees based on their previous average net weekly pay.

On 15 April 2020, I, as Minister for Finance, announced further updates to the TWSS. Included in the updates were measures to increase the wage subsidy for certain lower paid employees.  In effect, for those employees with previous net pay of less than €586 per week, the amount of the temporary wage subsidy shall not exceed €410 per week in accordance with the following principles:

- an 85% subsidy shall be payable in the case of employees whose average net weekly pay does not exceed €412; and

- a flat rate subsidy of up to €350 shall be payable in the case of employees whose average net weekly pay is more than €412 but not more than €500.

In addition, where an employer wishes to pay a greater level of top-up, in respect of employees with net pay of less than €412 per week, in order to bring the employee’s pay to €350 per week, then tapering would not be applied to the subsidy.

These changes to the TWSS mean that more employees will now receive a subsidy of €350 per week, and those with previous net pay below €412 per week will now receive a greater level of subsidy.

These new rates have been fully operational for payroll submissions made on or after 4 May 2020, with a pay date on or after that same date. 

The changes announced allow the concentration of resources to protect incomes, in a proportionate way having regard to available resources, employer contribution and the broader suite of COVID-19 related supports put in place by the Government.

Currently, I have no plans to change the average wage calculation to a different period.

Photo of Niall CollinsNiall Collins (Limerick County, Fianna Fail)
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73. To ask the Minister for Finance if an application (details supplied) for the temporary wage subsidy scheme previously disallowed due to an administrative error will be reviewed; and if he will make a statement on the matter. [5875/20]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The Temporary Wage Subsidy Scheme (TWSS) is an emergency measure to deal with the impact of the COVID-19 pandemic on the economy. The underlying legislation and the scheme itself were developed within a very short timeframe to support the urgent Government objective of getting much needed assistance to employers and employees, where businesses have been seriously affected by the necessary restrictions introduced to fight the pandemic. The purpose of the scheme is to ensure that the relationship between employers and employees is maintained to the greatest extent possible so that businesses can restart operations quickly once that is possible.

The TWSS builds on data returned to Revenue through its real-time PAYE System and is based on each employee’s average net weekly pay. The average net weekly pay is calculated from the information contained in payroll submissions reported by the employer to Revenue for January and February 2020 pay dates. The core principles of the scheme, as set out in the legislation are that:

- the business is suffering significant negative economic impact due to the pandemic,

- the employees were on the payroll at 29 February 2020, and

- the employer had fulfilled its PAYE reporting obligations for February 2020 by 15 March 2020.

Revenue recently amended the 15 March 2020 eligibility deadline for the February payroll submission to ‘before’ 1 April 2020 under its care and management provisions. This concession applies where all earlier returns were submitted before 15 March 2020.  These requirements are critical safeguards against abuse and exploitation of the scheme. 

Revenue has advised me that the weekly payroll submissions for February 2020 in respect of the business in question were not received until 16 April 2020, which is outside of the revised ‘before’ 1 April 2020 deadline.  Revenue has further confirmed that the January 2020 payroll submissions were also not received until 16 April 2020 and that over the course of 2019, payroll submissions were generally not received within the required deadlines.  

Revenue further advise me that it is for these reasons that the business cannot access the TWSS and that it is not possible for Revenue to design systems that will allow entry to the scheme where the inbuilt eligibility thresholds have not been adhered to. 

Steven Matthews (Wicklow, Green Party)
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75. To ask the Minister for Finance if a case (details supplied) will be examined in which a company is unable to access the temporary wage subsidy scheme. [5883/20]

Steven Matthews (Wicklow, Green Party)
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82. To ask the Minister for Finance if the case of a company (details supplied) will be investigated. [5937/20]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 75 and 82 together.

I am advised by Revenue that all cases which have applied for refunds under the Temporary Wage Subsidy Scheme (TWSS) and which were rejected on the basis of failing to meet the eligibility criteria are reviewed by Revenue.

The TWSS builds on data returned to Revenue through its real-time PAYE system. It must be accepted that the underlying legislation and the scheme itself simply cannot be tailored to meet every individual unique set of circumstances for either employers or employees. The core principles of the scheme, as prescribed in the underlying law, are that –

- the business is suffering significant negative economic impact due to the pandemic,

- the employees were on the payroll at 29 February 2020, and

- the employer had fulfilled its PAYE reporting obligations for February 2020 by 15 March 2020.

Accordingly, the TWSS can only operate in respect of an employee, whether full-time or part-time, who was on the payroll of the employer as at 29 February 2020.  Thus, where an employer has not met its statutory PAYE reporting obligations for February 2020 by 15 March 2020, then the employer is not eligible to participate in the scheme. These requirements of the TWSS were critical safeguards against abuse and exploitation of the scheme. PAYE legislation requires employers to report their payroll to Revenue in real time as the payroll is run.  Thus, employers are obliged to report the tax and PRSI deducted from their employees’ wages in real time.  

Arising from the ongoing review of specific cases since the TWSS started, I am advised by Revenue that it became apparent that a number of employers were unable to access the scheme because they failed the 15 March 2020 rule but had qualified under all other conditions of the scheme and are otherwise tax compliant.  Given the purpose of the scheme to maintain the link between the employee and employer, Revenue decided, under its care and management provisions, to allow such employers access to the scheme, provided:

- the employees in respect of whom the wage subsidy is claimed were included on the employer’s payroll on 29 February 2020,

- the February 2020 payroll submissions were submitted to Revenue before 1 April 2020, and 

- the payroll submissions for all previous months were submitted to Revenue before 15 March 2020.

Having regard to the particular circumstances of the case, involving a significant interruption caused by a suspected COVID-19 outbreak, following further engagement between the business concerned and Revenue, and in recognition of the positive compliance record of the business concerned, I am advised by Revenue that it approved the business for the purposes of the operation of the TWSS.

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