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Revenue updates TWSS Employer Eligibility guidance – 20/04/2020
On Tuesday, 24th of March the Government announced new measures to provide financial support to workers affected by the Covid-19 crisis. As part of these measures, Revenue operates a Temporary Wage Subsidy Scheme. The scheme, enables employees whose employers are affected by the pandemic, to receive significant supports directly from their employer through the payroll system. The scheme is expected to last 12 weeks from the 26th of March 2020.
Key Features of the scheme
- Initially, and until 4 May 2020, the subsidy scheme will refund employers €410 for each qualifying employee.
- From 4 May 2020, the subsidy payment will move to a system based on the previous net weekly pay for each employee.
- Employers should pay the relevant subsidy to each employee and may make an additional payment so that the total pay does not exceed the average net weekly pay of the employee.
- The subsidy scheme applies both to employers who make additional payments to their employees and those that are not in a position to do so.
- Employers make this subsidy payment to their employees through their normal payroll process.
- Employers will then be reimbursed for amounts paid to eligible employees and notified to Revenue via the payroll process.
- The reimbursement will, in general, be made within two working days after receipt of the payroll submission.
- Income tax and USC will not be applied to the subsidy payment made through the payroll.
- Employee PRSI will not apply to the subsidy or any additional payment by the employer.
- Employer’s PRSI will not apply to the subsidy and will be reduced from 11.05% to 0.5% on the additional ‘top-up’ payment from the employer.
Who does the scheme apply to?
- The Scheme is available to employers from all sectors (excluding the public service and non-commercial semi-state sector) whose business activities are being adversely impacted by the COVID-19 pandemic.
- It is open to employers who retain staff on payroll; some of the staff may be temporarily not working or some may be on reduced hours and/or reduced pay. Provided the employer meets the conditions set out below and, subject to the levels of pay made to employees, the employer may be eligible for the scheme for some, or all of its employees.
To qualify for the scheme, employers must:
- Be experiencing significant negative economic disruption due to Covid-19
- Be able to demonstrate, to the satisfaction of Revenue, a minimum of a 25% decline in turnover
- Be unable to pay normal wages and normal outgoings fully and;
- Retain their employees on the payroll.
The Scheme is confined to employees who were on the employer’s payroll as at 29 February 2020, and for whom a payroll submission was made to Revenue in the period from 1 February 2020 to 15 March 2020.
After the Scheme has expired, the names of all employers involved will be published on Revenue’s website.
Rates of subsidy from the 4th of May 2020
It is expected that the following new rates will apply to payroll submitted from 4 May with a pay date on or after that date until the end of the scheme. (No backdating of the revised rates prior to 4 May will apply.)
Employees previously earning up to €586 net per week:
- An 85% subsidy shall be payable in the case of employees whose previous average net weekly pay does not exceed €412.
- A flat rate subsidy of up to €350 shall be payable in the case of employees whose previous average net weekly pay is more than €412 but not more than €500.
- A 70% subsidy shall be payable in the case of employees whose previous average net weekly pay is more than €500 but not more than €586, with the maximum cap of €410 applying.
Employees previously earning in excess of €586 net per week:
- For employees whose previous average net weekly pay is greater than €586 per week but not more than €960 per week, the temporary wage subsidy shall not exceed €350 per week, and shall be calculated by reference to the amount of any additional payments made by the employer and its effect on the average net weekly pay as follows:
- A subsidy of €350 shall be payable to employees with previous average net weekly pay greater than €586, where the employer pays sufficient gross salary which equates to an amount up to 60% of the employee’s previous net weekly earnings.
- A subsidy of €205 shall be payable to employees with previous average net weekly pay greater than €586, where the employer pays sufficient gross salary which equates to an amount that is more than 60% but not more than 80% of the employee’s previous net weekly earnings.
- No subsidy shall be payable to employees with previous average net weekly pay greater than €586, where the employer pays sufficient gross salary which equates to an amount that is more than 80% of the employee’s previous net weekly earnings.
- The new arrangements also mean that the wage subsidy is available to support employees where their pre-Covid salary was greater than €76,000, and their post-Covid salary has fallen below €76,000, subject to the tiering and tapering rules.