Wage Subsidy Scheme Issues

eh i dunno

If you are layed off and claiming the €350 covid19 payment does this then mean that you have been made redundant? So if the company takes you back on in a month how much redundancy would you be entitled to if the company then closed completely in 6 months? Would your years of service be wiped out having been temporarily layed off?

storker

The_Chap wrote: »

Getting some excellent queries from some clients! One director believing he should be receiving the wage subsidy refund from the revenue in addition to his salary lol you can’t make it up

Probably one of those guys who will criticise other peoples' "sense of entitlement".

Stratvs

eh i dunno wrote: »

If you are layed off and claiming the €350 covid19 payment does this then mean that you have been made redundant? So if the company takes you back on in a month how much redundancy would you be entitled to if the company then closed completely in 6 months? Would your years of service be wiped out having been temporarily layed off?

See the section below on changes to redundancy rules during Covid-19 period.

https://www.citizensinformation.ie/en/employment/unemployment_and_redundancy/redundancy/lay_off_short_time_working_and_redundancy.html#l99a8e

Your years of service are not affected. But neither can you claim redundancy after more than 4 weeks of layoff during the emergency period.

collsoft

Changes announced to TWSS today by the Minister of Finance

https://www.gov.ie/en/news/c3e1eb-minister-donohoe-announces-update-to-the-temporary-wage-subsidy-sche/

Let the games commence!

The_Chap

collsoft wrote: »

Changes announced to TWSS today by the Minister of Finance

https://www.gov.ie/en/news/c3e1eb-minister-donohoe-announces-update-to-the-temporary-wage-subsidy-sche/

Let the games commence!

wow, so wage subsidy for April payroll being left as is, this only takes effect from May

some people won't be happy!

Stratvs

collsoft wrote: »

Changes announced to TWSS today by the Minister of Finance

https://www.gov.ie/en/news/c3e1eb-minister-donohoe-announces-update-to-the-temporary-wage-subsidy-sche/

Let the games commence!

Someone's going to have a very busy weekend again rejigging software !

collsoft

Stratvs wrote: »

Someone's going to have a very busy weekend again rejigging software !

Well apparently Revenue are doing all the work so I can kick back and enjoy the holidays the same as everybody else

Tow

collsoft wrote: »

Well apparently Revenue are doing all the work so I can kick back and enjoy the holidays the same as everybody else

Phase 2 starts on the 4th of May, which is when Revenue plan to publish individual employee's figures. As employers will not have the required information before hand, there will be no running of payrolls in advance, for payment into accounts on the 4th.

nibtrix

So do the new changes mean that everyone is capped at max €350 subsidy, except for those earning between €500-586 as a net weekly average?

I'm lost again, only just had my head round the scheme as it was!

collsoft

nibtrix wrote: »

So do the new changes mean that everyone is capped at max €350 subsidy, except for those earning between €500-586 as a net weekly average?

I'm lost again, only just had my head round the scheme as it was!

Not quite.

If your Average Net Pay in Jan/Feb is between €500 and €586 then your subsidy is 70% so it will range from €350 to €410

nibtrix

collsoft wrote: »

Not quite.

If your Average Net Pay in Jan/Feb is between €500 and €586 then your subsidy is 70% so it will range from €350 to €410

Sorry, yes, that’s what I meant. So those with an average net weekly pay in Jan/Feb under €412, the subsidy is 85% of pay.

Net pay between €412-€500 the subsidy is €350.

Net pay between €500-586 the subsidy is 70% of pay i.e. between €350-€410.

Net pay between €586-986 the subsidy is €350.

Seems strange that they wouldn’t close that gap to simplify it, and just cap it at €350 for everyone between €412-986 weekly net.

michellie

This is much better for me as a part time worker. With the 70%, I was coming out with much less per fortnight. 85% helps me a lot, I can top up with some holidays I carried over from last year too.

Jafin

I'm a tad confused over the announcement today. I'm in the €412 - €500 bracket. This week and last week I received just over €380 (€305 of which was the Covid-19 payment, the rest was my tax credits and USC). Does this mean there is no change for me, or that I am being bumped up from €305 to €350?

Tow

michellie wrote: »

This is much better for me as a part time worker. With the 70%, I was coming out with much less per fortnight. 85% helps me a lot, I can top up with some holidays I carried over from last year too.

It would appear to be illegal for employers to pay more than 70% Wage Subsidy.

In section 6 http://www.irishstatutebook.ie/eli/2020/act/2/section/28

(d) In the case where the net weekly emoluments that would otherwise have been payable, as mentioned in subsection (2)(a), to the specified employee amount to not more than €586 per week, the amount of the temporary wage subsidy shall not exceed a weekly amount equivalent to 70 per cent of the net weekly emoluments that would otherwise have been so payable.

nibtrix

Tow wrote: »

It would appear to be illegal for employers to pay more than 70% Wage Subsidy.

In section 6 http://www.irishstatutebook.ie/eli/2020/act/2/section/28

The quote you posted specifically says the SUBSIDY can’t be more than 70% of net pay (although this is now increased to 85% for earners under a certain amount), not that employers can’t pay more than 70%. Employers are allowed, actually encouraged, to top-up the payment to as close as possible of 100% of average net pay.

Tow

nibtrix wrote: »

The quote you posted specifically says the SUBSIDY can’t be more than 70% of net pay (although this is now increased to 85% for earners under a certain amount),

Exactly a Wage Subsidy of 70% of average revenue net weekly pay.

The minister for finance got 70% enshrined in law, he is on very iffy grounds to increase it to 85% without changing the law.

Fred Cryton

Away With The Fairies wrote: »

But you're just giving out about someone who was working short hours. Making them out to be some lazy dole scrounger. They're not, they lost their job. What do you want them to do?

I want them to earn less from not working than when they were working! How did you not comprehend that from my post?

Skihunta13

The revenue say they will look for the tax on the €350 subsidy from the employee at the end of the year.
How will this work? I am not earning any extra money now compared to january/february yet the revenue will look for the tax off me on the €350 subsidy received. I reckon that could amount to €800. Why am i liable for this when i am not taking home extra money?

august12

Skihunta13 wrote: »

The revenue say they will look for the tax on the €350 subsidy from the employee at the end of the year.
How will this work? I am not earning any extra money now compared to january/february yet the revenue will look for the tax off me on the €350 subsidy received. I reckon that could amount to €800. Why am i liable for this when i am not taking home extra money?

If you normally don't pay tax and this payment is similar to your weekly earnings. then you won't pay tax on it.

Skihunta13

august12 wrote: »

If you normally don't pay tax and this payment is similar to your weekly earnings. then you won't pay tax on it.

I do normally pay tax. But with the subsidy and my employer topping up my wages im still taking home my normal wage amount. However revenue say that they will look to recover the tax on the €350 subsidy off me at end of year. But i am not taking home any extra money so why am i liable to pay tax on the subsidy? I will end up being down money.

Seve OB

Skihunta13 wrote: »

I do normally pay tax. But with the subsidy and my employer topping up my wages im still taking home my normal wage amount. However revenue say that they will look to recover the tax on the €350 subsidy off me at end of year. But i am not taking home any extra money so why am i liable to pay tax on the subsidy? I will end up being down money.

You most likely are down money.

stupidskin

I've just seen my payslip and as with everyone else am totally confused, I've received the full covid subsidy payment plus .01 from employer and then then a large enough negative tax figure which increases the NET takehome. This has me confused, how will all this balance with regards taxation at year end ? SS

The_Chap

stupidskin wrote: »

I've just seen my payslip and as with everyone else am totally confused, I've received the full covid subsidy payment plus .01 from employer and then then a large enough negative tax figure which increases the NET takehome. This has me confused, how will all this balance with regards taxation at year end ? SS

general advice would be to put any tax refund received now aside for later in the year, at which point there will be a year end reconciliation done

booooonzo

Seve OB wrote: »

You most likely are down money.

I'm still confused on this.

We are continuing to work full time hours
We have been told we are taking a pay cut of 20% from May
We will be using the subsidy for April
We have been told our net will remain the same for April as previous months
Our Gross will be reduced by 20% from May

Are you saying we may effectively be hit by more than a 20% reduction from May on wards while using the subsidy scheme due to having to pay tax on what ever portion of our net is made up of the subsidy?

thanks

2Mad2BeMad

stupidskin wrote: »

I've just seen my payslip and as with everyone else am totally confused, I've received the full covid subsidy payment plus .01 from employer and then then a large enough negative tax figure which increases the NET takehome. This has me confused, how will all this balance with regards taxation at year end ? SS

They plan on having it spread out throughout the year so you will take home less every week. Although it won't be much prob a 10er but it's impossible to know at this stage. Unless you can afford to pay back the balance in one go.
Or if you lose your job and haven't earned enough by the end of the year to be taxed.
Its really anyone's guess.

If we go the full 12weeks i reckon il ow at least 1600 in tax by the end of the year.
Spread that out over a year its about 30odd quid down a week.
So your best bet is to put 20percent aside in a savings account so when they come looking you can give most if not all of it back

Skihunta13

2Mad2BeMad wrote: »

They plan on having it spread out throughout the year so you will take home less every week. Although it won't be much prob a 10er but it's impossible to know at this stage. Unless you can afford to pay back the balance in one go.
Or if you lose your job and haven't earned enough by the end of the year to be taxed.
Its really anyone's guess.

If we go the full 12weeks i reckon il ow at least 1600 in tax by the end of the year.
Spread that out over a year its about 30odd quid down a week.
So your best bet is to put 20percent aside in a savings account so when they come looking you can give most if not all of it back

But you are being taxed €1600 at the end if the year by your estimate based on the subsidy being taxed. The issue i see is that you have not earned or took home any extra money during this crisis however you will have to pay tax on it. But you employer has not paid you your normal gross and their prsi contribution is down to 0.5%.
Looks to me that the employer is not only saving €350 per week but also saving on the top up and prsi. And the employee will be hit with a tax liability at the end of the year even thiugh they are earning less.

The_Chap

Skihunta13 wrote: »

But you are being taxed €1600 at the end if the year by your estimate based on the subsidy being taxed. The issue i see is that you have not earned or took home any extra money during this crisis however you will have to pay tax on it. But you employer has not paid you your normal gross and their prsi contribution is down to 0.5%.
Looks to me that the employer is not only saving €350 per week but also saving on the top up and prsi. And the employee will be hit with a tax liability at the end of the year even thiugh they are earning less.

What you earn over the course of the year will be reconciled and your tax will be calculated based on that less your eligible tax credits = tax payable, from this what has been paid already will be deducted, remainder will be due to Revenue.

How they then reclaim the amount has yet to be decided, but I suspect they will adjust 2021 tax credits for most

not sure what part of this is confusing - nearly all income earned is included in taxable calculations, how much you are liable to pay depends on multiple personal factors

Skihunta13

The_Chap wrote: »

What you earn over the course of the year will be reconciled and your tax will be calculated based on that less your eligible tax credits = tax payable, from this what has been paid already will be deducted, remainder will be due to Revenue.

How they then reclaim the amount has yet to be decided, but I suspect they will adjust 2021 tax credits for most

not sure what part of this is confusing - nearly all income earned is included in taxable calculations, how much you are liable to pay depends on multiple personal factors

The confusing part is that for the duration of the subsidy payment scheme i am going to incur a tax liability of approx €1200 which i will have to pay back to revenue over the course of 2021. However i have not earned any extra money to warrant this tax liability but my employer has.

kennethsmyth

Skihunta13 wrote: »

The confusing part is that for the duration of the subsidy payment scheme i am going to incur a tax liability of approx €1200 which i will have to pay back to revenue over the course of 2021. However i have not earned any extra money to warrant this tax liability but my employer has.

I get where you are coming from. To put it succinctly.

1. They are essentially basing the covid payment on a net payment of 350/70% but that is not really correct. The payment is essentially gross but not yet taxed.
2. Employers maybe topping up to 100% net but in fact in reality they are not as the 350/70% is still yet to be taxed.
3. This means employers that can pay full pay and are topping up are getting away with essentially paying employees with less overall net pay for the year.

This is a sham and it all should of been done on gross to reflect individuals tax circumstances while at the same time macking the covid deasp payment 300 to be more relevant.

The_Chap

Skihunta13 wrote: »

The confusing part is that for the duration of the subsidy payment scheme i am going to incur a tax liability of approx €1200 which i will have to pay back to revenue over the course of 2021. However i have not earned any extra money to warrant this tax liability but my employer has.

The point is you are getting this subsidy tax free currently as a short term measure

The employer is getting the support to try to make sure you have a job at the end

Or would you rather they collapsed?