Paschal Donohoe (Dublin Central, Fine Gael)
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The Temporary Wage Subsidy Scheme (TWSS) is an emergency measure to deal with the impact of the Covid-19 pandemic on the economy. The scheme builds on data returned to Revenue through its real-time PAYE system. It must be accepted that the underlying legislation and the scheme itself cannot be tailored to meet every individual unique set of circumstances for either employers or employees. The core principles of the scheme, as prescribed in the underlying law, are that the business is suffering significant negative economic impact due to the pandemic, that the employees were on the payroll at 29 February 2020 and that the employer had fulfilled its PAYE reporting obligations for February 2020 before, in general, 15 March 2020. The latter two requirements in particular were critical safeguards against abuse of the scheme.

I have been advised by Revenue that following a review of cases since the TWSS commenced, it became apparent that a number of employers had been unable to access the scheme because they failed the 15 March 2020 rule but had qualified under all other conditions of the scheme and are otherwise tax compliant. Given the purpose and objectives of the scheme, Revenue announced on 24 April 2020, under its care and management provisions, that it would allow such employers access the scheme provided:

- the employees in respect of whom the wage subsidy is claimed were included on the employer’s payroll on 29 February 2020,

- the February 2020 payroll submissions were submitted to Revenue before 1 April 2020, and

- the payroll submissions for all previous months were submitted to Revenue before 15 March 2020.

Where a business qualifies for the scheme under the revised criteria and makes the necessary declaration that it is significantly impacted by the Covid-19 crisis, the wage subsidies under the scheme will be payable for eligible employees in respect of payroll submissions made on or after 24 April 2020, with a pay date on or after 24 April 2020. These revised arrangements cannot be made retrospective. Where a business fails to meet the revised qualifying criteria for TWSS but wishes to further engage with Revenue on the matter, it must provide supporting evidence setting out the rationale for why it should be included in the scheme. This supporting documentation should be provided via Revenue’s myEnquiries system.

As I have indicated, the PAYE reporting obligations built into the eligibility criteria for the TWSS were designed in particular to prevent abuse of the scheme. It is not proposed to make any further concessions in relation to compliance with those reporting requirements for the purposes of qualification for the scheme.

James Browne (Wexford, Fianna Fail)
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61. To ask the Minister for Finance his views on ensuring that employers availing of the wage subsidy scheme raise their employees' wages up to 100% of their gross pay instead of their net pay; and if he will make a statement on the matter. [7383/20]

James Browne (Wexford, Fianna Fail)
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65. To ask the Minister for Finance his views on whether employers availing of the temporary wage subsidy scheme should match employees' gross pay instead of net pay rate; and if he will make a statement on the matter. [7583/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 61 and 65 together.

The Temporary Wage Subsidy Scheme (TWSS) is provided for in section 28 of the recently enacted Emergency Measures in the Public Interest (Covid-19) Act 2020. In the context of the compelling need for immediate implementation of the TWSS, the scheme necessarily had to build on data returned to Revenue through its real-time PAYE system.

The key prescribed conditions of the scheme are that –

- the business is suffering significant negative economic impact due to the pandemic and is unable to pay normal wages to employees, but wishes to continue to employ the employees and is making best efforts to continue to pay some wages to the employees,

- the employees were on the payroll at 29 February 2020, and

- the employer had fulfilled its PAYE reporting obligations for February 2020 before, in general, 15 March 2020, but recently extended to before the 1 April 2020.

The latter two conditions were particularly designed with a view to preventing abuse of the scheme.

The amount of the temporary wage subsidy payable in relation to eligible employees is based on the average net weekly pay reported for January and February 2020 for each employee.

I clarified in my letter of 16 April 2020 to Revenue, which set out my determinations of the amounts of wage subsidy to be payable in relation to different classes of employees, that for the purposes of the operation of the TWSS, the Average Revenue Net Weekly Pay is the employee’s average net weekly pay for January and February 2020 based on the payroll submissions made by the employer concerned to Revenue. It is a matter for each employer concerned to decide what amount of normal wages should be paid to employees in addition to the wage subsidy amounts, and whether to try match the employees’ previous gross or net pay. Ultimately, what employees are most concerned about is how near the aggregate of the wage subsidy amount plus whatever amount of normal wages is being paid net to them by employers is to their normal take home pay.

Revenue has confirmed that it has now implemented the revised rates of wage subsidy as determined by me on 16 April 2020, with the remainder to be implemented shortly. The revised rates apply as respects payroll notifications received by Revenue on or after 4 May 2020 in respect of payroll runs to be made on or after that date. The revised rate now implemented include:

- the 85% subsidy rate for employees whose average net weekly pay does not exceed €412,

- non-tapering of the 85% subsidy where an employer contribution of more than 15% of the employees net weekly pay results in a salary payment of up to €350 per week,

- the flat rate subsidy of up to €350 for employees whose average net weekly pay is more than €412 but less than €500,

- the 70% subsidy rate for employees whose average net weekly pay is more than €500 but less than €586, with a maximum subsidy of €410 applying,

- a maximum payment of €350 per week for employees whose average net weekly pay is greater than €586 per week but not more than €960 per week, subject to specific tapering reductions based on the employer contribution to the net weekly earnings.

Finally, it is important to note that the TWSS is operated in real-time by employers through the normal payroll process. To ensure that subsidy amounts are paid to employees on a timely basis as part of the relevant payroll run, it is necessary to calculate the amount of the subsidy due to an employee based on the employee’s gross pay. This is necessary as an employee’s net pay cannot be fully determined before the actual payroll is run. Revenue is aware that, in effect, this means that for some employees where the employer pays between (net weekly) €586 and €960, the full amount of the subsidy due to an employee may not be paid through the payroll run concerned. However, Revenue has confirmed it will be implementing a system development to ensure that any subsidy amounts that remain due to such employees will be calculated, by Revenue, following the submission of the actual payroll or payrolls. Arrangements will then be made by Revenue to pay any outstanding subsidy amount directly to the employees concerned. The necessary system development to achieve this will be implemented shortly and will be applied retrospectively from 4 May 2020 to any impacted weekly, fortnightly or monthly paid employees.