Written answers

Thursday, 25 February 2021

Department of Finance

Covid-19 Pandemic Supports

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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37. To ask the Minister for Finance the position regarding the entitlement of a person (details supplied) to the temporary wage subsidy scheme and employment wage subsidy scheme. [10705/21]

Photo of Paschal DonohoePaschal 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. This scheme ended on 31 August 2020 and was replaced by the Employer Wage Subsidy Scheme (EWSS).

The transitional phase of TWSS operated until 3 May 2020 and provided a subsidy of 70% of the average net weekly pay up to a maximum of €410 in respect of eligible employees. The operational phase of the scheme was introduced from 4 May 2020 and included increased subsidy rates up to 85%, to a maximum subsidy payment of €410. The operational phases also included a tapering mechanism that ensured the subsidy payment plus any additional payment by the employer did not exceed the employee’s ‘normal’ average weekly wage (ARNWP). This ARNWP, was calculated using the pay and tax details as reported to Revenue in the employer’s payroll submission for each pay date in January and February 2020.

Under the TWSS, the employer was expected to make best efforts to maintain employees’ net income for the duration of the scheme. However, there was no legal requirement for an employer to pay an additional gross (top-up) payment that fully or partially made up the difference between the amount provided by the subsidy scheme and the employee’s normal wage (ARNWP). The TWSS legislation also required employers to separately identify subsidy payments on employee payslips from any top-up payments made.

Revenue has advised me that based on payroll submissions received from the person’s employer, her ARNWP was calculated at €721.00 per week and the maximum subsidy payable to her under the TWSS was €350.00 per week. According to Revenue records, the person received TWSS payments from 9 April 2020 to 27 August 2020, which were in accordance with her ARNWP and which took account of the various additional top-up payments received from her employer during this time.

However, Revenue has previously publicly stated that for certain employees where their employer paid net weekly earnings of between €586 and €960 pre-COVID, the full amount of the subsidy due to such employees may not have been paid through the payroll process during the period the TWSS was in operation. The process of identifying those employees who qualify for an additional subsidy is currently in progress. Revenue intends to offset any additional amount against an individual’s outstanding income tax/Universal Social Charge (USC) due for 2020, or by way of direct refund if the person has no 2020 arrears. Based on the information available, it would appear that the person concerned may meet the relevant criteria and may be due an additional wage subsidy. It is hoped that this process will be implemented by the middle of this year when all the relevant data from employers has been reconciled and the required IT systems developments have been completed. It is not possible to quantify at this point how much additional subsidy amount each person would be entitled to.

As already indicated, the EWSS replaced the TWSS from 1 September 2020. The scheme is an economy-wide enterprise support that operates differently to the TWSS in that it provides a flat-rate subsidy to qualifying employers (rather than employees) based on the numbers of eligible employees on the payroll and on the level of weekly gross pay to those employees. The qualifying criteria for subsidy payments require that the employer pays gross weekly wages to the eligible employee of between €151.50 and €1,462. There is no subsidy payable where the gross weekly wage is less than €151.50 or more than €1,462. The rates of subsidy payable to employers per employee are €350, €300, €250 and €203, based on the level of gross wages paid. The level of gross wages paid is a matter for the employer and employee to agree.

Revenue has advised me that taxpayer confidentiality prohibits the disclosure of any information regarding the specific employer’s operation of the EWSS.

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