Kathleen Funchion (Carlow-Kilkenny, Sinn Fein)
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172. To ask the Minister for Finance if childcare professionals who returned to work on 29 June 2020 will not be expected to pay tax on their net wages; and if he will make a statement on the matter. [9560/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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The wage subsidy schemes have been a key component of the Government’s response to the continued Covid-19 crisis to support viable firms and encourage employment in the midst of these very challenging times.

The Temporary Wage Subsidy Scheme (TWSS) was introduced on 26 March 2020 and legislated for in section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020. Over 66,500 employers were supported through the TWSS in respect of more than 664,000 employees at a cost of €2.9bn. The scheme operated until 31 August 2020 and was replaced by the Employment Wage Subsidy Scheme (EWSS) from 1 September 2020.

The stated objective of both schemes is to support all employment and maintain the link between the employer and employee insofar as is possible, including through periods of the strictest public health restrictions that may have closed particular businesses, such as the childcare sector. It has also applied when and as the public health restrictions have been eased to help businesses to recover from the impact of a closure or reduced trade for a period. To that end, both supports have been available, regardless of whether or not the individual has actually been at work or not, as they are based on weekly pay to employees rather than hours worked. For employees, the "return to work" therefore does not impact on the application of treatment of the subsidy.

Payments made under the TWSS are regarded as income supports and share the characteristics of income. Other income earners in receipt of comparable “normal wages” are taxable on those wages. In the interest of equity, therefore, payments under the TWSS which were made to the category of individuals mentioned in the Deputy's question are subject to income tax and Universal Social Charge (USC) in the same way as is the case in relation to other categories or worker. While income tax and the USC on most income is deducted in real-time as and when the person is paid, the TWSS payments were not taxed in real-time and were instead liable to income tax and USC at the end of 2020.

The taxation treatment of TWSS payments was legislated for in section 28(5)(e) of the Emergency Measures in the Public Interest (Covid-19) Act 2020, and provides that “notwithstanding any other provision of the Act, the additional amount paid by the employer to a specified employee in accordance with paragraph (d) shall not be regarded as emoluments of the specified employee for the purposes of Chapter 4 of Part 42 of the Act and the Regulations, but shall be treated as income chargeable to tax on the specified employee under Schedule E within the meaning of section 19 of the Act”.

The Employment Wage Subsidy Scheme, which was legislated for under the Financial Provisions (Covid-19) (No. 2) Act 2020. The specific nature and terms of the EWSS arrangement are separate and distinct from the TWSS. EWSS re-establishes the normal requirement to operate PAYE and normal PRSI on all payments made to the employee by the employer. Employers operate payroll as normal and report employer and employee PRSI deductions based on the employee’s appropriate existing PRSI classes. This ensures employee social insurance contributions accumulate as normal and furthermore, that no additional tax liability on the salary payments made should accrue to employees.

As regards the TWSS, the Government have been consistent as regards the TWSS’s liability to tax from the outset of the payment. Indeed, I have been advised by Revenue that it clarified the tax treatment of the TWSS at employee level in the guidance material on the TWSS that it has published on its website since the commencement of the Scheme. Furthermore, Revenue actively engaged in facilitating webinars with the Employer Bodies, Accountancy Firms and Tax Practitioners to explain and clarify any issues for employers as regards the TWSS. For the information of the Deputy, the link directs to Revenue’s material on Frequently Asked Questions on the TWSS:

Revenue made a Preliminary End of Year Statement available to all employees from 15 January 2021, including those who were in receipt of the TWSS. The Preliminary End of Year Statement includes information relating to an employee’s income received, including pensions and income from the Department of Social Protection, as well as their tax credit entitlements. For the tax year 2020, the Statement also includes information on the amounts of TWSS payments, if any, received by each employee. In addition, the Statement provides employees with a preliminary calculation of the income tax and USC position for 2020 and indicates whether their tax position is balanced, underpaid or overpaid for the year.

Upon viewing the Preliminary End of Year Statement through myAccount, which is Revenue’s secure online facility for individual taxpayer services, employees have an opportunity to complete their income tax return for 2020, declaring any additional income and claiming any additional tax credits due, for example qualifying health expenses, to arrive at their final liability for 2020.

When a liability is finalised, individuals may opt to fully or partially pay any income tax and USC liability through the Payments/Repayments facility in myAccount. Where individuals do not opt to fully or partially pay, Revenue will collect the liability by reducing their tax credits over 4 years, interest free. The reduction of tax credits will start in January 2022.

Finally, the Preliminary End of Year Statement sets out a provisional tax position for 2020, based on information available on Revenue records, including any Temporary Wage Subsidy Scheme (TWSS) payments reported by the individual’s employer. Revenue published provisional statistics in relation to the preliminary end of year tax position for all PAYE taxpayers for the year 2020, on 14 January 2021 which is available to view on Revenue’s website PAYE Preliminary End of Year Statements.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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173. To ask the Minister for Finance when a Covid restrictions support scheme application by a person (details supplied) will be paid. [9566/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Covid Restrictions Support Scheme (CRSS) is a targeted support for businesses significantly impacted by restrictions introduced by the Government under public health regulations to combat the effects of the Covid-19 pandemic. Details of the CRSS are set out in Finance Act 2020 and operational guidelines are published on the Revenue website at link; .

I am advised by Revenue that all issues relating to the person’s entitlement to the CRSS have been resolved. The payments due to the person under the scheme have been processed and will be in the nominated bank account in the coming days.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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174. To ask the Minister for Finance if the employment wage subsidy scheme payments due to a person (details supplied) will be paid shortly. [9570/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that Employment Wage Subsidy Scheme (EWSS) payments are generally made to employer nominated back accounts within two working days of receipt of the relevant payroll submissions.

Revenue has also confirmed that the EWSS payments in question were paid to the person’s nominated bank account on 18 February 2021. Revenue contacted the person’s tax agent on 19 February confirming that the payment was made and that the technical issue that delayed the payment was fully resolved.