Fergus O'Dowd (Louth, Fine Gael)
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198. To ask the Minister for Finance if a response will issue regarding concerns raised (details supplied) in respect of the temporary wage subsidy scheme and possible issues arising; the measures that should be undertaken in such circumstances; and if he will make a statement on the matter. [3853/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Temporary Wage Subsidy Scheme (TWSS) was introduced on 26 March 2020 to provide income support to eligible employees where the employer’s business activities were negatively impacted by the COVID-19 pandemic. The scheme operated until 31 August 2020 and was replaced by the Employment Wage Subsidy Scheme (EWSS) on 1 September 2020.

To ensure payments were made to employees as quickly as possible, Revenue operated a ‘transitional phase’ of the TWSS from late March until 3 May 2020. The ‘transitional phase’ provided a subsidy of 70% of the average net weekly pay up to maximum of €410 in respect of eligible employees.

On 4 May 2020 the TWSS moved to the ‘operational phase’ and included increased subsidy rates of up to 85%, subject to various maximum payments. During this phase, the subsidy amount paid to employers was based on each employee’s Average Revenue Net Weekly Pay (ARNWP), which was calculated using average net earnings in January/February 2020.

According to Revenue’s records, the person in question had three active employments in 2020, with one employer participating in the TWSS. This employer started operating the scheme in April 2020 and the person first received a subsidy of €260.04 on 30 April 2020. Subsequent monthly payments from May to August 2020 were reported (to Revenue) by the employer in respect of the person, indicating subsidy payments of €315.77. The amount of subsidy paid to the person corresponds with his ARNWPand the applicable rates of subsidy due to him under the scheme.

Revenue has confirmed that it is engaging directly with the employer regarding the actual amount of TWSS that was paid to the person. Once the amounts are confirmed, Revenue will ensure any necessary adjustments are made by the employer to the person’s 2020 salary record, which will impact (reduce) his taxable income for the year.

The TWSS payments correctly received by the person are subject to income tax and Universal Social Charge (USC). The amount due can be reduced by the allocation of any unused tax credits for 2020 or additional tax credits such as health expenses. Any remaining balance at that point will be collected, interest free, over four years from 1 January 2022 by reducing tax credits, thereby minimising any financial hardship to the greatest extent possible.

Gerald Nash (Louth, Labour)
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199. To ask the Minister for Finance if tax liabilities will be issued to workers whose employer wrongly availed of the temporary wage subsidy scheme; and if he will make a statement on the matter. [3858/21]

Gerald Nash (Louth, Labour)
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237. To ask the Minister for Finance the number of employers found not to be in compliance with the temporary wage subsidy scheme to date; if employees who have worked in firms found not to be compliant are subject a tax bill on their payment; and if he will make a statement on the matter. [4478/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 199 and 237 together.

As recently advised to the Deputy in a previous reply to a Parliamentary Question, Revenue has completed compliance checks in respect of more than 92% of employers who participated in the Temporary Wage Subsidy Scheme (TWSS). To date, over €3m of subsidy payments has been recouped in aggregate from some 620 employers, and enquiries are ongoing in the remaining cases.

It is to be noted that these figures are in the context of total TWSS payments in excess of €2.8bn to some 66,000 employers. It should also be noted that 5,195 employers have repaid over €79m in TWSS payments up to 31 December 2020. The overpayments typically occurred in circumstances where the level of estimated business decline did not materialise or where unintended errors were included in claims.

Any TWSS payments received by employees are subject to income tax and USC irrespective of whether the employer was correctly eligible to participate in the scheme or not. Where Revenue has recovered TWSS amounts from ineligible employers, it is a matter between the parties (i.e. employer and employee) as to whether the payments are subsequently recouped from relevant employees. Any such recoupment by employers will result in a reduction in the taxable income of the relevant employees.

Where the TWSS amounts paid to relevant employees are not recouped by the employer, then the income tax and USC liabilities remain due. Revenue has confirmed that these liabilities, which may be reduced by the allocation of unused tax credits or additional tax credits such as health expenses, will be collected, interest free, over four years from 1 January 2022. This will be achieved by reducing tax credits for those years, thereby reducing any financial hardship to the greatest extent possible.