Paul Murphy (Dublin South West, RISE)
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94. To ask the Minister for Finance the total amounts owed by workers for outstanding tax as a result of the temporary wage subsidy scheme; the plans in place to deduct this from workers; the way tax refunds due to workers are affected by same; and if he will make a statement on the matter. [17208/21]

Rose Conway-Walsh (Mayo, Sinn Fein)
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102. To ask the Minister for Finance if evidence has been determined of negative financial implications for workers who worked continuously through the Covid-19 pandemic but had been placed on the temporary wage subsidy scheme by their employer; if so, the details of same; and if he will make a statement on the matter. [16826/21]

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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148. To ask the Minister for Finance the reason workers are facing tax bills from the administration of the temporary wage subsidy scheme when the instruction to the employers was to top-up wages only to normal net amounts, effectively meaning a cut in gross pay and a saving to employers; if he will examine this position again in view of the fact that workers now facing tax bills received no improvement in their take home pay but are now presented with a tax bill; and if he will make a statement on the matter. [17190/21]

Neale Richmond (Dublin Rathdown, Fine Gael)
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315. To ask the Minister for Finance if he has considered reducing the tax liability of those whose income was supported by the temporary wage subsidy scheme; and if he will make a statement on the matter. [16377/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 94, 102, 148 and 315 together.

The Temporary Wage Subsidy (TWSS) was in place between 26 March and 31 August 2020 and was introduced as an emergency income support for employees of vulnerable firms whose businesses had been negatively impacted by COVID restrictions and whose turnover had reduced by at least 25% during Q2 while the strictest public health measures were in place. The support was paid via the employer so as to maintain employment links between the employee and employer insofar as was possible and, to that end, the rate of Employers' PRSI was also significantly reduced to 0.5%. The level of income given to each individual employee was based on previous wages received in January and February 2020. Over 66,500 employers received a subsidy under the TWSS with payments worth just under €2.9 billion paid out to a total of 664,000 workers.

The subsidy was based on net pay and tax was not collected in real-time through the PAYE system while the scheme was in operation, and instead would be collected after an end of year review, if any such liability arose. This decision was taken in order to maximise the amount of financial support that was provided to recipients at a time when it was considered that they needed such support most, when the TWSS was first announced and expected to only be in place for 12 weeks.

Net pay was the chosen benchmark for the TWSS as the priority was to preserve take-home income of workers insofar as was possible, noting that similar rates of income supports based on previous pay levels were also being provided for those on the Pandemic Unemployment Payment (PUP) administered by the Department of Social Protection.

When the TWSS was extended for a further 10 weeks until the end of August 2020, Revenue took steps to minimise the amount of income tax and USC due, if any, on TWSS payments at the end of the year. This was done by placing all recipients of the TWSS or PUP on the ‘week 1 basis’ of taxation for the remainder of the year so as to “preserve” unused tax credits that can then be used to offset any income tax or USC liabilities that arise at year end.

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, Revenue’s material on Frequently Asked Questions on the TWSS can be found at

The employer was expected to make best efforts to maintain the employee’s net income for the duration of the scheme. However, the question of an individual’s entitlements and rights in an employment context, the question of what wages an employer would be legally obliged to pay employees in respect of hours worked and the question of an employer’s capacity to pay wages to employees at pre-COVID levels in the light of the impact of the pandemic on the employer’s business, were matters between the employer and the relevant employees and were outside the remit of the TWSS.

An employer who received TWSS payments under the scheme was obliged to pass on any such payments to its employees. Revenue’s ongoing TWSS compliance programme is specifically examining that employers adhered to that requirement, as well as examining employer/employee eligibility for the TWSS. In addition, I am aware that 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/USC due for 2020, or by way of direct refund if the person has no 2020 arrears.

Payments made under the TWSS were 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 are subject to income tax and Universal Social Charge (USC). 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.

Although the final calculation of the end of year liability for each person is dependent on their personal circumstances based on data that Revenue released in January, it is noted that almost half of those in receipt of the PUP or TWSS have no outstanding liability to discharge (in fact over a third are due a refund).

In the case of the remaining taxpayer units with an outstanding liability, the data indicates that amounts to be collected are modest in scale, with 44% owing less than €500 and 72% having a liability of less than €1,000. If paid over the 4 year period beginning in 2022, the majority of those cases will owe less than €5 per week, with nearly half paying less than €2.50 per week. These figures represent a preliminary liability and may be further reduced by additional tax credits or reliefs such as health expenses.

Revenue has also given assurances that if any income tax and USC liabilities remain following the allocation of unused credits, it will work with its customers to collect the outstanding liabilities and a number of flexible arrangements may be entered into, including the collection without interest over an extended period of time for 4 years beginning in 2022. It is also understood that Revenue are facilitating employers who wish to pay the tax liabilities of their employees where such income tax and USC liabilities arise from the scheme.

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.

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:

I might conclude by noting that Revenue are facilitating employers who wish to pay the tax liabilities of their employees where such income tax and USC liabilities arise from the scheme. Any employers who are in a position to discharge such liabilities on behalf of their workers are encouraged to do so, but it is also acknowledged that, as with the decision around whether to avail of the TWSS in the first place, the question of whether an employer pays the income tax owed by employees in respect of the TWSS is a matter between the employer and the relevant employees.

Éamon Ó Cuív (Galway West, Fianna Fail)
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95. To ask the Minister for Finance the discussions he has had with the banks and building societies in relation to the provision of further mortgage breaks for those who are on pandemic payments due to the level 5 lockdown since January 2021; the results of these discussions; and if he will make a statement on the matter. [16453/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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Last year the Banking and Payments Federation of Ireland (BPFI) announced a coordinated approach by their member banks and other lenders to help their customers who were economically impacted by the onset of the COVID-19 crisis. The measures included flexible loan repayment arrangements where needed, including loan payment breaks initially for a period up to three months and then subsequently extended for up to six months. The implementation of this voluntary moratorium by the banking industry was a flexible response to the emerging COVID-19 crisis and ensured that a large volume of affected customers could benefit quickly during a fast moving and evolving public health crisis.

While many borrowers whose payment break has ended have been able to return to full payments, it is also recognised that many borrowers continue to be impacted by the economic consequences of COVID-19. For those borrowers, lenders are expected to engage with them in an effective way and, in line with the requirements of the Code of Conduct on Mortgage Arrears, the Consumer Protection Code and regulations on lending to SMEs, to deliver appropriate and sustainable solutions and facilitate as many borrowers with their debt repayments.

In relation to the reintroduction of mortgage payment breaks, the Central Bank has confirmed that there is no regulatory impediment to lenders offering payment breaks to borrowers, providing they are appropriate for the individual borrower circumstance. My Department maintains ongoing contact with the BPFI and lenders and the BPFI also stated last January that standard payment breaks continue to be part of the wide range of tailored solutions which are being made available to customers upon assessment of their particular situation.

I will continue to work with the Central Bank, as regulator, to ensure that the Central Bank consumer protection and other applicable frameworks will be fully available to all borrowers that still need support at this time.