Temporary Wage Subsidy Scheme 2

covid-19 caution

The Bill passed Seanad Éireann. Revenue and Department of Finance have revised and published Version 2 of their guide Operation of Temporary COVID-19 Wage Subsidy Scheme.
The new version rolls back some aspects and clarifies previous issues with the scheme.
Key clarifications in Version 2 are:

  • All employees on payroll are eligible for the Wage Subsidy Scheme. Including proprietary directors, those outside the age of 18-66, part-timers and those working in the ROI but resident in Northern Ireland.
  • The maximum top-up of 30% of net wage limit has been removed and redefined. The employer can contribute up to the employees previously defined Revenue weekly net wage.
  • There are better worked examples of how to treat weekly, fortnightly and monthly pay runs in the Transition Period of March and April.
  • Benefits in Kind are suspended for the duration of the scheme. This means that any scheme submission should not contain BIK elements. However, the BIK will still need to be declared at the end of the year and taxes deducted where applicable.
  • The band between Revenue net wage of €586 and €960 is a flat €350 per week. This does leave oddities such as a person on €586 will receive €410 employer refund, while someone on €586.01 (1c higher) will be refunded €350.
  • Those above €960 per week are not eligible for a refund.

There is some clarity on the treatment of the scheme for the transition period:

For weekly and fortnightly pay runs with payment date on or after the 26th of March, then the subsidy to the employer will be €410 per week. The refund to the employee should only be 70% of their Revenue net wage up to a maximum of €410 or €350 per week, depending on their income level. The employer will need to ring-fence the difference and return that to Revenue. The payslip submission should include 1(or 2) J9 PRSI insurable weeks.

For March monthly pay runs with with payment date on or after the 12th of March, Revenue will refund €203 * 4 to the employer. The payslip should contain a subsidy to the employee of 70% of the Revenue net wage, up to a flat maximum of €812. The pay slip submission should include 4 J9 PRSI insurable weeks.

So, what is this Revenue Weekly Net Wage thing all about?

This is an attempt to establish limits on the value of the scheme. It defines the maximum amount that the government will pay per employee. At the same time it limits how much the employer can pay the employee for the duration of the scheme. Paying more than the Revenue net wage to the employee results in the wage subsidy refund to the employer being reduced.

The value of an employees Revenue net wage is determined from the January and February submissions already made to Revenue before the 15th of March. Last submissions, or revised submissions after the 15th of March are ignored.

The employee must be on the payroll on 29 February and the employer must, between 1 February and 15 March, have made payroll submissions for payments to the employee to Revenue with pay-dates between 1 Feb and 29 Feb.

Revenue net wage is the gross pay, less taxes (IT, PRSI ee & USC) divided by the number of insurable weeks in the employee payslips.

It is a blunt instrument. People paid bonus or with extra-ordinary income in Jan and Feb will benefit from a higher average net wage. Those who had reduced income in the period will be have a lower average net wage. There is no mechanism to adjust this value.

We will be making changes to the Parolla COVID-19 Wage Subsidy Scheme code this weekend to reflect the latest Version of the FAQ document.

See previous post here.