Pearse Doherty (Donegal, Sinn Fein)
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194. To ask the Minister for Finance the time that was taken to bring the temporary wage subsidy scheme from design stage to its operational phase when it was introduced in 2020. [8898/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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On 24 March 2020, the Government announced measures to provide financial support to workers affected by the COVID-19 crisis. As part of these measures, Revenue operated a COVID-19 Temporary Wage Subsidy Scheme. The Temporary Wage Subsidy Scheme (TWSS) provided the payment of income supports to employers in respect of eligible employees, where the employer’s business activities experienced significant negative disruption due to the COVID-19 pandemic.

The TWSS started from 26 March 2020 and superseded the Employer COVID Refund scheme, which Revenue operated on behalf of the Department of Social Protection. The Employer COVID Refund scheme was an emergency support to employers that had run for a very short period from 19 March 2020.

The purpose of the TWSS was to get much needed financial assistance to employees, while retaining the employer/employee relationship which facilitated the early recommencement of normal business when conditions permitted.

The TWSS was open to employers who self-declared to Revenue that they experienced significant negative economic disruption due to Covid-19. They had to demonstrate that they met the criteria laid out in Revenue’s published Guidance on Employer Eligibility and Supporting Proofs

The TWSS was legislated for in section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020.  The scheme was predicated on the employer wanting to keep the employees on the payroll and to retain them until business picked up.  The employer was expected to make best efforts to maintain the employee’s net income for the duration of the scheme. 

I am advised by Revenue that a ‘transitional phase’ of the TWSS ran from 26 March 2020 to 3 May 2020.  During this period, the rate of subsidy was based on an employee’s Average Revenue Net Weekly Pay (ARNWP) and, where eligible employees’ ARNWP was:

- less than or equal to €586 per week, a maximum subsidy of €410 was payable

- greater than €586 and less than or equal to €960 per week, a maximum subsidy of €350 was payable.

Revenue implemented the ‘operational phase’ of TWSS from 4 May 2020. Under this phase, where an employee’s ARNWP was:

- less than, or equal to, €412, he/she would have received a subsidy of 85% of their ARNWP, up to a maximum of €350 per week

- more than €412, and up to €500, he/she would have received a flat rate of €350 per week

- more than €500, and up to €586, he/she would have received 70% of their ARNWP up to a maximum of €410 per week.

Where an employee’s ARNWP exceeded €586 per week, the wage subsidy did not exceed €350 per week.  It was calculated with reference to the additional payment an employee received from his/her employer and its effect on his/her average weekly pay.

By its nature, the ‘transitional phase’ of the TWSS was delivered in a very short timeframe as was necessary to get critical funding to employers as quickly as possible to ensure employees were retained in employment.  It was always acknowledged that there was potentially an element of overclaim involved with this phase.  The ‘operational phase’, on the other hand, was delivered over a longer period of time and accommodated tapering of the subsidy rates and other features that ensured a more precise subsidy amount was paid out based on the payroll data provided by employers.

I am further advised that Revenue carried out a comprehensive reconciliation process on the TWSS that opened on 22 March 2021 and concluded on 30 June 2021.  This process has ensured that any material overpayments of subsidies made to employers have either been paid back or are in the debt warehouse, to be paid back in the future. 

It is fair to say that the development of the TWSS was an ongoing process from its introduction by the Government in March 2020 to well beyond its expiry at the end of August 2020.  Revenue has confirmed to me that the delivery of the TWSS, which was a sophisticated and bespoke system that delivered wage subsidies to eligible employers for eligible employees, would not have been possible without the investment by Revenue in its PAYE Modernisation programme that was delivered over many months between 2016 and 2019. 

I want to acknowledge the exemplary work that went into the TWSS by my own officials and the staff in Revenue at what was an incredibly difficult time for our country. The success of these endeavours is evident from the fact that €2.8 billion was paid to over 67,000 employers in respect of almost 690,000 employees.

Finally, work is underway at senior official level on an inter-departmental basis to review the experience from the introduction and operation of Covid-19 emergency income supports paid to/in respect of people whose employment was impacted due to public health restrictions, and to identify lessons learnt.  My Department is represented on the relevant group which is chaired by the Department of Social Protection and also includes representatives from the Departments of Public Expenditure and Reform and Enterprise Trade and Employment and from the Office of the Revenue Commissioners.