Wage Subsidy Scheme Issues

Dav010

lord quackinton wrote: »

My employer looked at this and refused to sign up for three reasons
1. Name is published by revenue
2. A drop in 25% in revenue is something they believe that must be proven in time , revenue are playing the nice guy but in time will review every application
3. The employees Will be reviewed by revenue at year end. This will be very messy

We will be paid as long as we can and then go on the 350 payment or stamps

Proven in time, are you not noticing a drop over the past month? It would be better to apply for subsidy now and repay Revenue if the drop does not reach the threshold, rather than waiting until the drop is confirmed in the coming months, and not having availed of the subsidy.

Why would he/she have an issue with name being published by Revenue? It’s likely the majority of businesses will be effected and there is no shame in being one of them. And the messy business will apply to all businesses, that is what accountants are for.

You could be paid for, and kept in employment for longer if your employer applies for the subsidy, rather than waiting until they can no longer pay and then laying you off. It just makes no business sense to work this way.

blackwhite

lord quackinton wrote: »

My employer looked at this and refused to sign up for three reasons
1. Name is published by revenue
2. A drop in 25% in revenue is something they believe that must be proven in time , revenue are playing the nice guy but in time will review every application
3. The employees Will be reviewed by revenue at year end. This will be very messy

We will be paid as long as we can and then go on the 350 payment or stamps

On 2 - Revenue have confirmed in discussions with a number of professional and representative bodies that they will treat the 25% decline on a good faith basis.

If you can demonstrate your decision process and show that there was a reasonable belief that the 25% threshold would be met then you won't be penalised if trading turns out to be better than the 25% - unless you continue to participate in the scheme after it becomes apparent that the company is unlikely to qualify.

CrabRevolution

michellie wrote: »

Work are paying us the 70% I only work 3 days a week, I got a payment of €504 yesterday (fortnight wage) plus tax back of €126. But I'm assuming now the €504 is the basic Covid 70% pay I will be getting and from next fortnight I won't have any more tax back.

I would be better off I was claiming the government €350per week at least then it would be the same as my regular wages. Is there no way I can do this or am I stuck with my 70%?

I'm taking it that your average weekly gross before this was €395, assuming €252 is 70% of your normal net, which would give a gross of €395ish, depending on your tax credits etc.

At €395 a week you'd have been liable for PAYE of (€79-Tax Credits) so I'll guess roughly €15.50. You'd have been up for USC of €4.46 a week too.

If you worked 12 weeks paying roughly €20 a week in PAYE & USC then you'll be due a refund of €240 in total. So you'll get a smaller refund next time and from then on just get the €504 fortnightly.

This is my first foray into tax questions, so any more knowledgeable folk feel free to tear my answer to shreds!

booooonzo

Seve OB wrote: »

Fair call. It was late!
I don’t think I was advising anyone though to accuse their employer of lying and defrauding though. I was more saying the employee should discuss with their employer. And if an employer makes a false declaration they can find themselves in a sticky situation.

In the spirit of the scheme though, it should not be abused to get subsidies and keep staff on full hours. As above in bold, this is what I was trying to say.

I’ll show so examples later on of what I mean about pay cuts.

I’ll need to remedy myself so that I can ask some questions....... and I have a couple on the back burner!

would be interested to hear these.

Doing my own research and it seems if the company can show proof (email) of substantial wage cuts that also qualifies them instead of proof of the 25% reduction in revenue.

I believe that is why we have gotten the 20% cut while reaming on full hours

They are preparing for the worst long term (possibly good business?) but i'm not 100% its correct use of this scheme.

Our business wouldn't really see a 25% Q2 reduction i dont believe due to the way our work is but i can't be sure....

lord quackinton

blackwhite wrote: »

On 2 - Revenue have confirmed in discussions with a number of professional and representative bodies that they will treat the 25% decline on a good faith basis.

If you can demonstrate your decision process and show that there was a reasonable belief that the 25% threshold would be met then you won't be penalised if trading turns out to be better than the 25% - unless you continue to participate in the scheme after it becomes apparent that the company is unlikely to qualify.

I am a member of a professional body
Revenue have issued guidelines that are open to debate
They are leaving themselves options to go hunting and to claim as much back as they can from the employees and employers
The wage income subsidy is set up by revenue to ensure this
It’s a bad scheme

It’s make more sense for a good employer to let employees to claim the 350 and then top it up themselves

Dav010

lord quackinton wrote: »

I am a member of a professional body

It’s make more sense for a good employer to let employees to claim the 350 and then top it up themselves

But to claim the €350 unemployment benefit, you have to have been made unemployed, it converts over to JSA soon, how could an employer make an employee unemployed, then top it up?

https://www.gov.ie/en/service/be74d3-covid-19-pandemic-unemployment-payment/

lord quackinton

Dav010 wrote: »

But to claim the €350 unemployment benefit, you have to have been made unemployed, it converts over to JSA soon, how could an employer make an employee unemployed, then top it up?

https://www.gov.ie/en/service/be74d3-covid-19-pandemic-unemployment-payment/

Both schemes are short term wage subsidy and emergency payment so time limit means nothing

What an employer could do is pay lump sum “holidays and overtime accrued to an employee

Good employers work with their employees

blackwhite

lord quackinton wrote: »

I am a member of a professional body
Revenue have issued guidelines that are open to debate
They are leaving themselves options to go hunting and to claim as much back as they can from the employees and employers
The wage income subsidy is set up by revenue to ensure this
It’s a bad scheme

It’s make more sense for a good employer to let employees to claim the 350 and then top it up themselves

I've been briefed on the direct discussions Revenue have had with IBEC, with CAI and with one of the big 4 - all briefings by people who were in the direct discussions with Revenue. The only intention of "hunting" is instances where there's willful abuse of the system.

Revenue have stated that for any "honest mistake" cases where subsidy was claimed inappropriately without mal-intent, they'll agree repayment without penalty - leaving employers no worse off than if they hadn't implemented the scheme.

On your final point - it's not possible for an employer to "top up" if the employee is claiming the €350 directly themselves. The €350 direct to employees is only for cases where people have been made unemployed as a result of the current circumstances. Topping-up in those circumstances would remove the entitlement for an employee to claim €350

No "good employer" is going to encourage welfare fraud

booooonzo

blackwhite wrote: »

I've been briefed on the direct discussions Revenue have had with IBEC, with CAI and with one of the big 4 - all briefings by people who were in the direct discussions with Revenue. The only intention of "hunting" is instances where there's willful abuse of the system.

Revenue have stated that for any "honest mistake" cases where subsidy was claimed inappropriately without mal-intent, they'll agree repayment without penalty - leaving employers no worse off than if they hadn't implemented the scheme.

On your final point - it's not possible for an employer to "top up" if the employee is claiming the €350 directly themselves. The €350 direct to employees is only for cases where people have been made unemployed as a result of the current circumstances. Topping-up in those circumstances would remove the entitlement for an employee to claim €350

No "good employer" is going to encourage welfare fraud

What constitutes mal intent?
we are taking pay cuts due to 'potential downturn' and availing of the scheme

gb19815

Stratvs wrote: »

You may receive refund of PAYE & USC for some weeks as your current taxable gross is small in relation to what it was before. However the non-taxed subsidy is taxable ( just not through payroll ) and reviews will be done later to reconcile what was paid and what should have been paid. Revenue have said in their FAQ to the scheme ( See 3.11 at linke below) that they will deal with that over time in manageable amounts. The aim right now is to give people money in their pocket when they need it.

https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf

Thanks

Heres Johnny

Can anyone tell me if its possible to pay staff 100% of their net wages using this subsidy without causing either of the below...

A) causing a tax liability for them? Which in effect is a wage reduction when the dust settles

Or

reducing amount of subsidy repayable to the company

noodler

Heres Johnny wrote: »

Can anyone tell me if its possible to pay staff 100% of their net wages using this subsidy without causing either of the below...

A) causing a tax liability for them? Which in effect is a wage reduction when the dust settles

Or

reducing amount of subsidy repayable to the company

Instead of giving them their 410 (gross) you could do the tax for them and give them whatever the net is (prob about 300).

If you give them the other 30% though? Would paying 30%^410 (gross) and giving the net of this reduce the amount of subsidy?

blackwhite

booooonzo wrote: »

What constitutes mal intent?
we are taking pay cuts due to 'potential downturn' and availing of the scheme

Nothing defined, but that's a general standing principle in any Revenue audit or compliance check, so anyone running a business in a position of fiscal responsibility should be familiar with the general principles that Revenue apply for it.

blackwhite

Heres Johnny wrote: »

Can anyone tell me if its possible to pay staff 100% of their net wages using this subsidy without causing either of the below...

A) causing a tax liability for them? Which in effect is a wage reduction when the dust settles

Or

reducing amount of subsidy repayable to the company

The only way we've been able to think of is to possibly make up the tax shortfall at the end of the year with non-taxable One4All vouchers or similar.

I'd imagine anything that seen to be a way of "topping up" shortfalls arising from the scheme would be at risk as being considered a way to circumvent the rules

blackwhite

noodler wrote: »

Instead of giving them their 410 (gross) you could do the tax for them and give them whatever the net is (prob about 300).

If you give them the other 30% though? Would paying 30%^410 (gross) and giving the net of this reduce the amount of subsidy?

Revenue guidance has been very clear that you cannot deduct Income Tax or USC from the Govt subsidy. If the subsidy is claimed then it must be passed in full to employees except in very rare circumstances (i.e. where an employee wants to continue making certain non tax-related payments via payroll).

witchgirl26

lord quackinton wrote: »

My employer looked at this and refused to sign up for three reasons
1. Name is published by revenue
2. A drop in 25% in revenue is something they believe that must be proven in time , revenue are playing the nice guy but in time will review every application
3. The employees Will be reviewed by revenue at year end. This will be very messy

We will be paid as long as we can and then go on the 350 payment or stamps

1. What's the problem with this? It'll literally be on their website somewhere. I honestly don't understand why this is freaking people out. Hey look our company is published on Revenue's website for signing up to a scheme to help pay employees.

2. Course they will review. They state that in the guidelines. However they also state that if you don't have the 25% drop in actuality but can show through calculations etc that you reasonably expected that fall off, that they will not pursue.

3. Yes it might get a bit awkward. However it means that employees are getting a bit more now rather than trying to survive on much less.

Look it's not ideal & there are holes in it but having spent the past week going through it with a fine tooth comb, it's not the worst scheme in the world. There's flaws in all schemes out there. I've also been involved in the one in the UK but it's messy too, just in different ways.

gb19815

I was wondering would it be possible to receive the cova payment and apply some holiday payment also ? Ie cova payment and 1 day holiday pay ?

collsoft

gb19815 wrote: »

I was wondering would it be possible to receive the cova payment and apply some holiday payment also ? Ie cova payment and 1 day holiday pay ?

It should be ok - but it depends on your figures.

Each employee has a unique subsidy and allowable top-up that depends on the average net pay in Jan/Feb.

Assuming that the 1 day of holidays is less than the maximum employer top-up then you should be ok.

We have a calculator on our website www.collsoft.ie that will tell you the amount of subsidy available and the maximum amount by which you can top up.

Just enter your Average Net Pay into the calculator.

If you are not sure about your average net pay, then get you last payslip in February and take the cumulative figures for Gross Pay - PAYE - USC - PRSI and then divide by the number of Insurable weeks - it should be close enough

noodler

blackwhite wrote: »

Revenue guidance has been very clear that you cannot deduct Income Tax or USC from the Govt subsidy. If the subsidy is claimed then it must be passed in full to employees except in very rare circumstances (i.e. where an employee wants to continue making certain non tax-related payments via payroll).

Pretty sure it says the employer does.not have to deduct.

Not that they cannot.

Seve OB

noodler wrote: »

Pretty sure it says the employer does.not have to deduct.

Not that they cannot.

wrong.
it clearly states the subsidy must be paid in full to the employee

fairylove

Hey all, I have a query about the wage subsidy scheme if anyone could throw some light on it - my company laid everyone off on 16th March. Now they are planning to bring back senior staff on wage subsidy scheme, this includes me. The employer will top up 10% of my pay, rather than the 30%. I'm delighted to be able to avail of this and be back to work (from home!). However, some information received today isn't sitting right with me. Some of my colleagues will receive their full pay (30% top up). We are all doing the same hours & will be on the same part-time hours for the duration of the subsidy payment. My query is - Would anyone know why my employer would pay some employees a higher percentage of the subsidy than others? It doesn't seem fair. I do earn a bit more than some colleagues but we are all within the €38k limit for the subsidy scheme, so I don't think that's why. I can't think of anything other than it's an arbitrary decision they have made for some reason. I will speak to them about it but just wanted to see if there's anything I'm missing, as I'm feeling annoyed/confused by this

CaptainCoPilot

I work for a pretty big company who have been adversely affected by Covid-19.

Originally they advised us that everybody was being put on a 50% working week which would result in a 50% reduction in pay. Therefore we could claim social welfare for the other 2.5 days.

The government then announced this scheme and the company informed us they were signing up to it.

However, the 50% time was remaining the same, so the covid subsidy was being used to pay the 50% payment to us only. As we cant claim both the covid and unemployment benefit, the company is "topping up" our 50% payment with the amount we would be able to claim from social welfare.

I think this is all wrong.

Firstly I think the company is being greedy by keeping us on 50% time while the government is paying 70% of our salary. By my calculation, for the vast majority, the government is now paying the entirety of our wage.

Secondly, as there is a tax liability on the covid payment we are actually worse off as we should be keeping some money aside to pay the tax at a later date.

Can anybody shed some light? Am I right to he concerned? The company have already made mistakes in applying this and many employees are concerned.

LJ_20

Hi, I am due to return to work from maternity leave this month and my employer has told me they cannot put me on the wage subsidy scheme even though all other staff are on it and will be receiving 100% of their wage.

Their reasoning is that I have not been on the payroll in January or February and I should apply for PUP which is 350 a week.

I have come across a document from Revenue which you can find by searching "Guidance on operation of Temporary COVID Wage Subsidy scheme FAQ v5"

Section 4.6 looks like it makes an exception for people who were not on the payroll in January or February if they were on maternity leave but my employer claims this is not correct and has said Revenue confirmed to them that I should not be included on the scheme.

I do not see how it can be OK for my maternity leave to affect my wage like this while my colleagues continue to receive full pay. I am also very worried about how this will affect things such as mortgage approval. Any advice on what I can do here would be greatly appreciated.

gb19815

collsoft wrote: »

It should be ok - but it depends on your figures.

Each employee has a unique subsidy and allowable top-up that depends on the average net pay in Jan/Feb.

Assuming that the 1 day of holidays is less than the maximum employer top-up then you should be ok.

We have a calculator on our website www.collsoft.ie that will tell you the amount of subsidy available and the maximum amount by which you can top up.

Just enter your Average Net Pay into the calculator.

If you are not sure about your average net pay, then get you last payslip in February and take the cumulative figures for Gross Pay - PAYE - USC - PRSI and then divide by the number of Insurable weeks - it should be close enough

Hi thanks again , my employer not topping up and leaving a fair difference to normal pay . One last question what happens ie with bank holiday in relation to pay ?

CrabRevolution

noodler wrote: »

Pretty sure it says the employer does.not have to deduct.

Not that they cannot.

The guidance states:

Revenue will be checking the eligibility of employer and employees for this scheme. Checks include:
• the employer has paid the full subsidy amount to the employee

And

Income tax, USC, LPT, if applicable, and PRSI are not deducted from the Temporary Wage Subsidy.

You can't pay the employee less than what revenue give you to pay them.

Seve OB

LJ_20 wrote: »

Hi, I am due to return to work from maternity leave this month and my employer has told me they cannot put me on the wage subsidy scheme even though all other staff are on it and will be receiving 100% of their wage.

Their reasoning is that I have not been on the payroll in January or February and I should apply for PUP which is 350 a week.

I have come across a document from Revenue which you can find by searching "Guidance on operation of Temporary COVID Wage Subsidy scheme FAQ v5"

Section 4.6 looks like it makes an exception for people who were not on the payroll in January or February if they were on maternity leave but my employer claims this is not correct and has said Revenue confirmed to them that I should not be included on the scheme.

I do not see how it can be OK for my maternity leave to affect my wage like this while my colleagues continue to receive full pay. I am also very worried about how this will affect things such as mortgage approval. Any advice on what I can do here would be greatly appreciated.

IMO it is quite clear, they can include you.
I would ring the revenue yourself and seek their advice, explain the situation to them.

highgiant1985

LJ_20 wrote: »

Hi, I am due to return to work from maternity leave this month and my employer has told me they cannot put me on the wage subsidy scheme even though all other staff are on it and will be receiving 100% of their wage.

Their reasoning is that I have not been on the payroll in January or February and I should apply for PUP which is 350 a week.

I have come across a document from Revenue which you can find by searching "Guidance on operation of Temporary COVID Wage Subsidy scheme FAQ v5"

Section 4.6 looks like it makes an exception for people who were not on the payroll in January or February if they were on maternity leave but my employer claims this is not correct and has said Revenue confirmed to them that I should not be included on the scheme.

I do not see how it can be OK for my maternity leave to affect my wage like this while my colleagues continue to receive full pay. I am also very worried about how this will affect things such as mortgage approval. Any advice on what I can do here would be greatly appreciated.

Reads like you were on unpaid maternity leave? If so your employer is correct. If you were not in a payroll submission with a Feb payment date that was transfer to Revenue before 15th March then the revenue scheme rules are the employee can not be processed under this scheme.

LJ_20

highgiant1985 wrote: »

Reads like you were on unpaid maternity leave? If so your employer is correct. If you were not in a payroll submission with a Feb payment date that was transfer to Revenue before 15th March then the revenue scheme rules are the employee can not be processed under this scheme.

Correct, it was unpaid maternity leave. However, the document I referenced says the below;

"4.6 What if an employee was not on Payroll in January or February 2020?

There can be cases where an employee was in employment but who did not receive normal pay in January or
February 2020, such as reduced pay, maternity leave or off-pay leave. In such cases the employer can either:
• operate the scheme based on Average Net Weekly Pay,
• pay the employee the appropriate wages without receiving a subsidy refund, or
• the employee may decide not to participate in the Temporary Wage Subsidy Scheme and instead apply
directly to the Department of Employment Affairs and Social Protection for the Pandemic Unemployment
Payment."

I would have thought this section covers me as it's for employees that were not on payroll in January or February. I am really surprised that maternity leave may not be protected here.

Happy4all

over how long a period does an employer's have to be down 25% ?

Seve OB

LJ_20 wrote: »

Correct, it was unpaid maternity leave. However, the document I referenced says the below;

"4.6 What if an employee was not on Payroll in January or February 2020?

There can be cases where an employee was in employment but who did not receive normal pay in January or
February 2020, such as reduced pay, maternity leave or off-pay leave. In such cases the employer can either:
• operate the scheme based on Average Net Weekly Pay,
• pay the employee the appropriate wages without receiving a subsidy refund, or
• the employee may decide not to participate in the Temporary Wage Subsidy Scheme and instead apply
directly to the Department of Employment Affairs and Social Protection for the Pandemic Unemployment
Payment."

I would have thought this section covers me as it's for employees that were not on payroll in January or February. I am really surprised that maternity leave may not be protected here.

Yes that’s the correct section. Previous poster highgiant is incorrect. Show this document to your employer. As I say, call revenue and explain to them the situation and they can guide you.