COVID-19 Wage Supports

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Firstly, please let me know if you want to be removed from these emails. While Covid-19 affects as all, some companies may not need to take the
supports at the moment.

Most of you will have seen the press releases around Covid-19 Temporary Wage Subsidy Scheme announced yesterday evening.

As part of the Payroll Software Developers Association we have been in discussions with Revenue today. The details as reported in the media and published by Revenue + DEASP, do not contain all the details of how the schemes are to be administered.
The content of the scheme still has to be passed through the Diál tomorrow, so may change again.

Here’s what we understand at the moment about the five plans currently in play:

Illness Benefit

A welfare payment of €350 for people medically diagnosed or instructed to self-isolate.

Short Time Work Support

A form of Job-seekers Benefit for those placed on reduced hours/days. It pays a proportion of the Job Seekers Benefit depending on the reduction in days, around €40 per day not worked.

It is likely that an employee on reduced in hours due to COVID-19, but still working, will be better to use the new Temporary Covid-19 Wage Subsidy Scheme , if offered/eligible with the employer

Employer Refund Scheme

The initial refund scheme is a flat rate of €203 per week allowing the employer to pay an employee who is temporarily laid off due to Covid-19. The state will reimburse the employer. This scheme is still in effect for:

  • Pay runs submitted before the 26th March even if they have a pay date after the 26th March.
  • Monthly pay runs in March.

It is replaced by the COVID-19 Pandemic Unemployment Payment.

COVID-19 Pandemic Unemployment Payment

An upgraded version of the Employer Refund Scheme with a flat net payment of $350 per week. This is for people temporarily laid off. (They haven’t been made redundant or ceased, but with no work available for them). The payment will last the course of the pandemic.

It is worth noting that this payment is a flat payment and is not tested against previous earnings.
Some employees may be better off on this scheme depending on their earnings history during January and February of 2020, than on the new Temporary Covid-19 Wage Subsidy Scheme.
The employer can administer the scheme via payroll and be refunded by the DEASP via Revenue. Or the employee can go directly to the DEASP.

Temporary COVID-19 Wage Subsidy Scheme

Details have not been confirmed yet but you can read the initial guidance about the scheme here:

Now that you’ve read that!
These are the exceptions/clarifications that the Payroll Software Developers Association have been discussing with Revenue:

  • The Collector General is going to issue further guidance on the eligibility of companies to avail of the scheme. In particular the line about companies needing to be unable to pay staff or liabilities. Revenue expect that this will be a relaxed interpretation.
  • The definition of take home pay and net pay, used to calculate 70% and 30% subsidy and top up, is not agreed yet. It is likely to be Gross pay, less USC, less PAYE IT, less PRSI ee. We are unclear on the application of BIK or deductions on that calculation. Worked calculations are being issued by Revenue.
  • Revenue will calculate the Revenue Net Pay over the next few weeks based on the reported payroll submissions for each employee in the months of January and February. The average will be determined by what has been reported, divided by the number of insurable weeks claimed, up to a maximum of 9.
  • Until they have done that calculation, the employer should attempt it, using their best estimates, and use that value as the basis of determining the 70% subsidy.
  • During the transition period, Revenue will refund companies for each employee at a flat rate of €410. However, the employer is expected to ring-fence and refund the difference between the €410 subsidy and what was actually paid out.
  • There will be some form of wash up where you will need to declare subsidies paid out and reconcile it against subsidies received.
  • In the bill going to the Dáil there is a tapering clause. Where the value of the subsidy decreases for those between €586 – €960 per week emoluments. The nature of the tapering is not defined.
  • There is also a max limit where those over €960 per week are not eligible for the scheme.
  • The employer can top up to the value of 30% of the employees average Revenue Net Wage.
  • There is however no distinction between a top-up to get someone to their base salary, and an additional earnings such as overtime, commissions etc.
  • Income above the top-up 30% will result in a 1-for-1 reduction of the subsidy.
  • It is the employers responsibility to establish the eligibility of an employee to avail of the scheme. There has been no guidance on those outside the ages of 18-66.
  • You will be able to bring employees who were let go initially back onto the new scheme. However, we don’t have understanding from Revenue about how to calculate their equivalent net earnings for their new employments.
  • The employer should consider if the employee actually wants to be on the scheme. They may be better off temporarily unemployed.
  • Refunds of subsidies to companies will be sought where employees have later been found to be ineligible or their initial net pay was overstated.
  • Don’t try changing Jan and Feb pay run submissions, as only those submitted before March 14th will be used as the basis of net pay calculation.
  • Reversing or deleting any payslip submitted to Revenue containing PRSI class J9 (the method revenue use to establish the presence of COVID-19 payments) may be ignored as the refund might have already been issued. So don’t delete or modify a COVID payment once it has been submitted!
  • None of the schemes are retrospective, or can be backdated.

We have updated our system to automatically create a new calendar, migrate employees, and create a new Refund Scheme earnings rate for the Pandemic Unemployment Payment.

We have not yet updated for the Wage Subsidy Scheme, we just don’t know the mechanics yet. However, the tools are there. We can create a estimated net report for you, once we know the calculation process. We can create separate earnings lines mapped to different codes, so that you can track reconciliation and we can submit class J9.

Again, this may all change very quickly.

Read our previous post here:

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