The Temporary Wage Subsidy Scheme (TWSS) has been extended to 31st August 2020. Revenue will continue to administer the scheme reimbursing employers for subsidy amounts paid to eligible employees, notified to Revenue via the payroll process.
Employers Eligibility
The eligibility criteria to continue participating within the scheme or to now join the scheme remains 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 June 30th 2020, Quarter 2.
Where a business, after reviewing its position and the economic impact of the pandemic, considers that it did not meet the eligibility criteria but had reasonable grounds for assuming it would, it should immediately cease claiming the subsidy for the extended scheme. Revenue will require evidence of the assumptions supporting the original self-assessment of eligibility and, once the basis is reasonable, will not seek to claw-back the subsidy paid for the original period. If there was not a reasonable basis, the subsidy is repayable.
How employers can stop claiming TWSS
Employers who consider they do not meet the eligibility criteria or who no longer wish to avail of the TWSS, should cease returning J9 PRSI Class payroll submissions to Revenue.
Employers should ensure the employee J9 PRSI Class (J9 submissions) is reverted on future payroll submissions for each employee to their normal PRSI class (Pre-Covid-19).
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. The wage subsidy rates remain as follows:
- Where the eligible employee’s Average Revenue Net Weekly Pay (ARNWP) does not exceed €412, a subsidy of 85% of ARNWP, to a maximum of €350, is applicable.
- Where the ARNWP is more than €412 but not more than €500; a subsidy of €350 is applicable.
- Where the ARNWP is more than €500 but not more than €586, a subsidy of 70% of ARNWP is applicable to a maximum of €410.
- Where the eligible employee’s ARNWP is greater than €586 but not more than €960 and the employee’s current gross pay per week, as reported in the payroll submission, is:
- not more than 60% of the ARNWP, a subsidy of €350 is applicable.
- more than 60% and not more than 80% of the ARNWP, a subsidy of €205 is applicable.
- more than 80% of the ARNWP, no subsidy is payable and J9 PRSI class should not be applied.
- Where employees’ ARNWP is more than €960, and where their current gross pay is below €960 per week and this represents
- not more than 60% of the ARNWP, a subsidy of up to €350 is applicable.
- more than 60% and not more than 80% of the ARNWP, a subsidy of €205 is applicable.
- more than 80% of the ARNWP, no subsidy is payable and J9 PRSI class should not be applied.
Revised tax credit certificates for employees in receipt of TWSS and PUP Payments
TWSS payments made to employees are liable to income tax and Universal Social Charge , 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.
Employer 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.
The compliance check programme will also address any identified issues in respect of the operation of Real Time PAYE (PMOD) by employers over 2019 and 2020 and will also provide an opportunity for employers to address any other outstanding tax issues. This will be of importance to employers who may intend to avail of the ‘debt warehousing’ scheme for Employer PAYE and VAT liabilities incurred during the pandemic period as up-to-date compliance will be a pre-requisite in order to avail of that scheme.
Letters will issue to employers and their agents, where relevant, mainly through the ROS Inbox. The programme is expected to last for several months.
It is essential that employers respond promptly as failure to do so may lead to suspension of future payments.