Wage Subsidy Scheme Issues

Dec2020

collsoft wrote: »

For anybody that is interested the draft legislation covering EWSS has just been published at

https://data.oireachtas.ie/ie/oireachtas/bill/2020/19/eng/initiated/b1920d.pdf

Ok, so this is not the final legislation and I have only had a quick read through it and may have made mistakes, but here is some of what I understand about the EWSS

1) Scheme will run from 1st July 2020 to 31st March 2021 - Minister can extend after that.

2) To qualify an employer must have a drop of at least 30% of turnover or orders in the period 1st July 2020 to 31st December 2020 compared to same period in 2019. The minister may specify other percentage reductions

3) It will not be open to proprietary directors, and some connected persons.

4) The subsidy will be determined by employee's Gross Pay. For Pay between €151.50 and €202.99 per week a subsidy of €151.50 per week will be paid. For pay between €203 and €1462 per week the subsidy is €203 per week

5) No subsidy is available for any pay lower than €151.50 or higher than €1462 per week

6) It looks like the subsidy will be paid a month in arrears after the monthly statement has been returned. So for July the payments would be made to the employer after 15th August

7) You cant fire a full-time employee and replace them with two (or more) part time employees to increase your subsidy

8) Employer must perform review at the end of each tax month and exit the scheme if they no longer qualify. There will be a formal exit procedure


It would appear to me that this new subsidy will be a direct payment to the employer and will not appear on the employee's payslip.

It would also seem that J9 is not being used and employees will simply revert to their normal PRSI class under the scheme.

Anyway, take all of the above with a large pinch of salt - I could well have made some mistakes in my reading of it, and there is likely to be more clarification over the next week or so

Very helpful,
On point 5, did the employee had to have been earning over €1462 per week in Jan and Feb 2020 to be eligible? Or what does this apply to?

Also could you pay somone let's say €10k for the month of September off the subsidy and then put them back on it in October if the business was still eligible(30% down in turnover)
Many thanks

gb19815

Hi my employer is holding back taxes but not been declared to revenue is this right what Hes doing while claiming covid payment?

PickYourName

Dec2020 wrote: »

Very helpful,
On point 5, did the employee had to have been earning over €1462 per week in Jan and Feb 2020 to be eligible? Or what does this apply to?

My reading of it is that the rates refer to the period involved, with no reference back to a period in the past as used by the TWSS.

That is, if you are paid less than €1,462/week in (say) Sept 2020, you can claim the subsidy in that month.

collsoft

That would be my initial read of the rules as well.

The scheme only looks at the gross pay in the current period and the amount of subsidy is determined by that gross pay figure

PickYourName wrote: »

My reading of it is that the rates refer to the period involved, with no reference back to a period in the past as used by the TWSS.

That is, if you are paid less than €1,462/week in (say) Sept 2020, you can claim the subsidy in that month.

the corpo

Are they going to reopen applications? What if your company had been ok at the beginning of the pandemic but is now struggling?

Dempo1

the corpo wrote: »

Are they going to reopen applications? What if your company had been ok at the beginning of the pandemic but is now struggling?

Good question, the new scheme should be open for this scenario as it states 30% reduction in turnover, can't be sure of THE TWSS as I recall that was specific on turnover dates, others may have a better idea

collsoft

As I mentioned in my original post the reference period for the new scheme is July 2020 to December 2020 and the 30% drop is related to your turnover or orders for this period compared to the same period in 2019

Dempo1 wrote: »

Good question, the new scheme should be open for this scenario as it states 30% reduction in turnover, can't be sure of THE TWSS as I recall that was specific on turnover dates, others may have a better idea

Dec2020

Would you be allowed to pay employees commission as long as their gross pay did not exceed €1462 per week?

collsoft

Yes, I believe that you would.

The Payroll software companies are meeting with Revenue on Tuesday to discuss EWSS

Hopefully have more details after that

Dec2020 wrote: »

Would you be allowed to pay employees commission as long as their gross pay did not exceed €1462 per week?

jammiedodgers

Will the scheme be staying as is (ie 350 subsidy etc) until end of August or will EWSS come into effect sooner?

collsoft

Yes the existing scheme (TWSS) will continue to run until 31st August.

The new scheme (EWSS) will run from 1st July in tandem with old scheme.

So I think you could have employees on the old scheme TWSS and have any of your new hires on the new scheme at the same time.

I presume that at the end of August any of your employees currently on the existing scheme will transfer over to the new scheme if the employer is still eligible.

jammiedodgers wrote: »

Will the scheme be staying as is (ie 350 subsidy etc) until end of August or will EWSS come into effect sooner?

socco

I know no PRSI is deducted but when processing a redundancy payment what PRSI Class should I report it against? Is it Class M since no PRSI owed.

snowgal

while the extension is welcome for employers, it will be a big enough drop from the current 70% allowance to a maximum of €203 per week for most of our employees here

leex

So if an employee qualifies for this new scheme, then their September payslip should look the same as their February payslip (assuming normal circumstances and working all year) and no additional tax due amount (on subsidy) will be payable at end of year?

kennethsmyth

leex wrote: »

So if an employee qualifies for this new scheme, then their September payslip should look the same as their February payslip (assuming normal circumstances and working all year) and no additional tax due amount (on subsidy) will be payable at end of year?

That is how I would read it, however there is plenty of time for the government to F it up between now and the next payrun!

collsoft

I think that is one of the best elements of this new scheme.

From the employee's perspective they are just being paid thier normal wages and the subsidy is paid directly to the employer.

No J9 PRSI Class, nothing to show on Payslip and no PAYE and USC bills at the end of the year.

leex wrote: »

So if an employee qualifies for this new scheme, then their September payslip should look the same as their February payslip (assuming normal circumstances and working all year) and no additional tax due amount (on subsidy) will be payable at end of year?

collsoft

That is going to be a big shock to most employers alright - the level of subsidy is much lower

snowgal wrote: »

while the extension is welcome for employers, it will be a big enough drop from the current 70% allowance to a maximum of €203 per week for most of our employees here

jammiedodgers

collsoft wrote: »

I think that is one of the best elements of this new scheme.

From the employee's perspective they are just being paid thier normal wages and the subsidy is paid directly to the employer.

No J9 PRSI Class, nothing to show on Payslip and no PAYE and USC bills at the end of the year.

Is there a reason they couldn't have done it like this from the start?

Seve OB

jammiedodgers wrote: »

Is there a reason they couldn't have done it like this from the start?

it would have closed down a lot of businesses, many more on the live register. doing it the way they did, kept people employed or at least "on the books"

this change may very well impact a lot of companies who are not back up to a decent operating level.

matildajane

a quick question - apologies if this has been answered already. My daughters average was calculated based on January and February when she was part time and only working around 32 hours per week. She is now working full time but because her subsidy is capped based on her average hours her employer is still only paying her for 32 hours per week even though she is averaging 45 hours per week. They gave her an additional 50 in cash to bump up her wages but that still leaves her short around €88 per week. They obviously don't want to lose the subsidy but I have told her to only work the 32 hours so they can keep their subsidy. She was on the €350 while out of work , initially went back part time and was getting €203 per week but now she is full time she is just getting the covid subsidy and her employer is topping up to a max of €350 per week and this is leaving her considerably short of her pre covid earnings, in fact she is earning less than minimum wage.

Dec2020

So the new scheme should allow someone to draw down their mortgage whilst being on the scheme as it won't appear on payslips anymore?

kennethsmyth

Dec2020 wrote: »

So the new scheme should allow someone to draw down their mortgage whilst being on the scheme as it won't appear on payslips anymore?

I would say you’re correct on that. This is what should of been donee a few weeks into the Twss when they went to “fix” the issues.

jammiedodgers

Seve OB wrote: »

it would have closed down a lot of businesses, many more on the live register. doing it the way they did, kept people employed or at least "on the books"

this change may very well impact a lot of companies who are not back up to a decent operating level.

I don't mean paying less of a subsidy from the start, I meant in terms of basing it on gross pay and taxing it in real time.

PickYourName

matildajane wrote: »

a quick question - apologies if this has been answered already. My daughters average was calculated based on January and February when she was part time and only working around 32 hours per week. She is now working full time but because her subsidy is capped based on her average hours her employer is still only paying her for 32 hours per week even though she is averaging 45 hours per week. They gave her an additional 50 in cash to bump up her wages but that still leaves her short around €88 per week. They obviously don't want to lose the subsidy but I have told her to only work the 32 hours so they can keep their subsidy. She was on the €350 while out of work , initially went back part time and was getting €203 per week but now she is full time she is just getting the covid subsidy and her employer is topping up to a max of €350 per week and this is leaving her considerably short of her pre covid earnings, in fact she is earning less than minimum wage.

Firstly, and most importantly it is illegal to pay anyone less than the minimum wage: that law is still in place and operational.

Secondly, she has effectively had a wage cut, which presumably didn't agree to. This is a change to her terms and conditions without agreement, which again is not permitted.

If there is a union in her workplace she should contact them and get them to act on her behalf.

If there isn't she should speak to her employer. The issue about a change to her terms and conditions is tricky, as she may be put in a position to accepting a wage cut in return for retaining her job. However, she cannot accept a wage of less than minimum wage: it is illegal to do so.

She should ask for any monies due (i.e. the balance of what she was paid to either the minimum wage or her agreed wages) immediately.

If she doesn't get anywhere with her employer, she should make a complaint to the Workplace Relations Commission.

Useful links: https://www.citizensinformation.ie/en/employment/employment_rights_and_conditions/contracts_of_employment/change_job_contract.html

Note in particular the section about being asked to reduce your pay or hours.

Kewreeuss

The employer helpline has no information about the changes that are coming to the scheme. If you look on Revenue website, nothing has happened or will happen.
Reading this thread I have discovered the Bill No 2
It came out last week, but it is backdated to 1 July. How are you meant to do that, if you have already paid 3 weeks?
Can the employer now take on new staff and claim the fixed rate or do they have to wait until September make the claim?
Also, could someone please read section 28b(9), it's on page 13, and let me know what it means. I have a short little attention span and I can't find the bit before or after it that give it sense or context.
Thank you

PickYourName

Kewreeuss wrote: »

The employer helpline has no information about the changes that are coming to the scheme. If you look on Revenue website, nothing has happened or will happen.
Reading this thread I have discovered the Bill No 2
It came out last week, but it is backdated to 1 July. How are you meant to do that, if you have already paid 3 weeks?
Can the employer now take on new staff and claim the fixed rate or do they have to wait until September make the claim?
Also, could someone please read section 28b(9), it's on page 13, and let me know what it means. I have a short little attention span and I can't find the bit before or after it that give it sense or context.
Thank you

28b(9) is on page 11 of the document I'm looking at. Edit: you're right, it's page 13 of the PDF file; the page number on the page is 11, though.

I take it to mean you can't claim both the TWSS and new scheme for the same employee, during the period in which the schemes overlap.

I also don't see a problem with it starting on 1 July. The subsidy is paid retrospectively in any event.

Pistachio19

Is it allowable to pay travel expenses to an employee if it's going to bring their monthly pay over their average net?

blackwhite

Pistachio19 wrote: »

Is it allowable to pay travel expenses to an employee if it's going to bring their monthly pay over their average net?

Vouched travel expenses are not taxable, and aren't considered to be part of pay.

No issue with paying vouched expenses under the scheme.


Unvouched expenses (which would be subject to BIK) are considered to be part of pay, and are subject to the same Top-Up limits as any other pay top-up for anyone on the scheme.

Kewreeuss

Roll on September when we are paid for the hours we work and pay the taxes up front.

collsoft

Ok, so its not going to be as simple as first thought!!!!

Under the new scheme (EWSS) Employees will revert to their normal PRSI class and rates.

However, employers will continue to pay employers PRSI at a rate of 0.5%

This is going to be challenging to implement within the current PRSI bands, rates and rules!!!!!