Next week sees a number of changes to the Temporary Wage Subsidy Scheme (TWSS) come into effect. I attach the latest Revenue FAQ’s and Guidance for reference.
The scheme is moving to what is referred to as the operational phase. Revenue will be using actual calculations from now on based on the information that they have on record from payroll submissions.
A. RE-HIRING EMPLOYEES
As always said by revenue, the rehiring of employees is allowed and those employees can avail of the TWSS. As a consequence of the move of the scheme to the next phase, Revenue will provide information to employers in an Employer CSV file to ensure the correct wage subsidy due to each eligible employee is made. The Employer CSV file can be downloaded in ROS by employers who are registered for Employer PAYE(Emp), and their agents.
As this CSV is being generated this weekend, Employees rehired after 1 May 2020 will not be included in the 4 May 2020 Employer CSV file. Revenue are investigating options to facilitate the inclusion of such rehires at a future date. Until then, J9 submissions for employees rehired after 1 May 2020 will be processed but rejected for refunding. It is our expectation, that at a future date, Revenue will reprocess all the submissions received from the employee’s rehire date and refund where appropriate
This could have significant cashflow implications for businesses that are considering rehiring employees over the coming weeks.
There were two approaches that may have been taken on your payroll system when you laid off staff:
- They remained on the payroll system with a revenue employment ID and were just not paid; NO ISSUE HERE AS THEY WILL REMAIN ON THE REVENUE CSV
- A termination date was entered on the system and included on the submission to revenue. In this case the employment ID would have ceased. THESE EMPLOYEES WILL NOT BE ON THE REVENUE GENERATED CSV
B. SCHEME OPERATION AND SUBSIDY AMOUNTS
As with the operation up to now, everything is driven by what is called the Employee’s “Average Revenue Net Weekly Pay” (ARNWP). This is determined with reference to the net pay earned by employees over the first 9 weeks of 2020.
On determining that amount there are then effectively 5 bands that this amount can fall into in order to determine the subsidy amount and allowed employer top up amount. The bands that apply from 4th May are:
- If Employee’s Average Revenue Net Weekly Pay (ARNWP) is €412 or – the subsidy amount will increase to 85% (from the current 70%).
- 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
- For ARNWP greater that €586 per week but not more than €960 per week. Where the eligible employee’s ARNWP is greater than €586 per week but not more than €960 per week and the employee’s current gross pay, as reported in the payroll submission, is:;
- not more than 60% of the ARNWP, a subsidy of €350 is applicable (This is Tier 1)
- more than 60% and not more than 80% of the ARNWP a subsidy of €205 is applicable (This is Tier 2)
- more than 80% of the ARNWP, no subsidy is payable and J9 PRSI class should not be applied (This is Tier 3)
NB – this is potentially a significant change for certain of your employees (e.g. Employee with ARNWP of €900 – employer can pay €540 (60%) and still get a subsidy of €350. If Employer paid (i.e. top up) anything over €540 the subsidy would drop to €205. )
5. For ARNWP more than €960, and current gross pay is below €960 per week. The wage subsidy is available to support employees whose ARNWP is more than €960, and their current gross pay is below €960 per week.
- Where the employee’s current gross pay, as reported in the payroll submission, represents:
- not more than 60% of the ARNWP, a subsidy of up to €350 is applicable (This is Tier 1)
- more than 60% and not more than 80% of the ARNWP, a subsidy of €205 is applicable (This is Tier 2).
- more than 80% of the ARNWP, no subsidy is payable and J9 PRSI class should not be applied (This is Tier 3).
The maximum additional payment an employer can make, to receive the full subsidy, is the difference between the employees Average Revenue Net Weekly Pay and their maximum weekly wage subsidy. The guidance also states that this is subject to ensuring that the net pay now does not exceed €960.
Example – an employee with ARNWP of €1050 (up to this point would have been excluded from the scheme). They could now potentially be eligible for the €350 subsidy. So if their gross pay was reduced to €610, which is a 42% reduction on €1050, and you added the €350 subsidy their new “pay” would be €960 but the employer would be getting a €350 subsidy towards this. This is based on the revenue guidance available and so each case would have to be looked at individually.
C. Reconciliation of Employer Refunds
It is still the case that at a future date Revenue will perform a reconciliation of employer refunds made to the employer from 26 March up to 4 May. Where necessary Revenue will adjust the amount of future refunds that it will make to the Employer to take into account the difference between subsidy the employee was eligible for and the €410 that Revenue has refunded to the employer during the Transitional phase.
As ever if anyone would like to discuss any of the above feel free to contact one of the team or e mail firstname.lastname@example.org