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Temporary Wage Subsidy Scheme – Update

Temporary Wage Subsidy Scheme – Update

Posted on 03rd - July - 2020

Revenue have issued eBrief No. 117/20, 23rd June 2020: Temporary Wage Subsidy Scheme – Extension of the Temporary Wage Subsidy Scheme to August 2020 and update on a range of developments under the Scheme

The Minister for Finance and Public Expenditure and Reform announced on 5 June 2020 that the operation of the TWSS is extended to 31 August 2020.

Revenue have confirmed that the extension of the scheme does not alter how it currently operates.

A summary of the main clarifications arising from the eBrief are: 

Eligibility to participate in the Temporary Wage Subsidy Scheme:

The eligibility criteria to continue participating within the scheme or to now join the scheme remain unchanged.  The business must have suffered a significant negative economic impact as a result of the Covid-19 pandemic. The indicators of this are a minimum of a 25% reduction in turnover, customer orders or any other ‘reasonable basis for the three months to 30 June 2020, Quarter 2.  Details of the eligibility criteria are available on the Revenue website.

Calculation of the subsidy per employee

There is no change in the basis of calculation of the subsidy amount for the extended period and the arrangements in place since the start of the Operational Phase on 4 May 2020 continue.

Lessons learned from operation of the scheme to date

The majority of TWSS payroll submissions are processed for refund the day after they are received by Revenue. However, there are J9 submissions in respect of which no refund issued.  The main issues that have arisen to date are listed in the eBrief.

Week 1 Basis

TWSS payments made to employees are liable to Income Tax and Universal Social Charge (USC), while the Pandemic Unemployment Payment (PUP) is liable to Income Tax. However, the subsidy and PUP are not being taxed in real-time through the PAYE system and instead will be calculated as part of the employee End of Year review. With the continuation of the TWSS to the end of August 2020, to mitigate the possible impact on the employee End of Year review, Revenue will place all employees that received payments under either the TWSS or the PUP on a Week 1 basis.

It is important that employers utilise the most up-to-date Revenue Payroll Notification (RPN) when running payroll so that employees are correctly switched to the Week 1 basis as quickly as possible. Where an employee is already on the Week 1 basis no further action is needed.

Employee subsidy information viewable in myAccount

Details of TWSS subsidy payments being made to employers on behalf of employees are now viewable in each employee’s Revenue record, which can be accessed via myAccount. Through this facility, employees can see whether their employer is participating in the TWSS and being refunded a wage subsidy on their behalf. Employees can view this information by accessing the ‘Manage your Tax 2020’ link on the ‘PAYE Services’ card in myAccount and select the ‘View’ link beside the relevant employment. The employee should click on the ‘View’ link next to any payroll submission they wish to see.           

Where employees identify discrepancies between the TWSS amounts shown in myAccount and those provided by the employer, Revenue advises employees to firstly contact their employer to have the matter rectified (employers are obliged to rectify any issue identified). If it is not subsequently rectified to the employee’s satisfaction, they should contact Revenue directly via MyEnquiries under the category ‘PAYE (Pay As You Earn) employee/pensioner – Other’ and the subcategory ‘Employee Payroll Reporting – Compliance’.

Employees returning to work following a period of maternity or other related leave or, having been in receipt of Illness or other benefits paid by the Department of Employment Affairs & Social Protection (DEASP)

Employers who have employees returning to work following a period of maternity or other similar leave are reminded that that they can now claim wage subsidy in respect of such employees.  On 8 June last, Revenue implemented a change to the TWSS to accommodate employees returning to work.

Apprentices Returning to Work

Revenue has implemented a change to the TWSS which will accommodate apprentices returning to work who, in February 2020, were on an apprenticeship education and training programme run by SOLAS and were not on their main employer’s payroll in February 2020.

Compliance Programme

To ensure the TWSS is operating correctly Revenue is conducting a programme of compliance checks on all employers availing of the scheme and will be contacting all employers to confirm that:

–          They meet the eligibility criteria,

–          Employees are receiving the correct amount of subsidy; and

–          The subsidy amount is being correctly recorded in employee payslips.

Further guidance is available on Revenue’s eBrief No. 117/20:

https://www.revenue.ie/en/tax-professionals/ebrief/2020/no-1172020.aspx

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