Wage Subsidy Scheme Issues

Beasty

Threads merged

Tow

anonymous08 wrote: »

Why is 76K gross quoted as the limit in many places and nett figure 960 PW quoted in other places.

In the very early planning days 76K was used. This changed after a few days to 960 Revenue Average Net Pay. Which is Gross Pay - (Income Tax + PRSI + USC), so not necessarily the Net Pay on your payslip and Gross Pay is the PMOD definition. This is not the same as Taxable Pay, it does not have Travel tickets (salary sacrifice) etc reduced from it. The Revenue FAQ is incorrect to use the term taxable pay in it's examples.

Surely a gross figure would be more equitable etc.

The system is as specified by the Minister of Finance and Department of Finance.

Also, how is the estimated pay calculated is it pay in 2019 or the 1st 2 months of 2020

Average of Jan and Feb. Providing a submission with a Pay Date in February was received and the employer uploaded them before the 15th of March and did not subsequently modify them any way after the 15th. The weekly value is calculated by dividing by the number of insurable weeks, capped at 9.

blackwhite

anonymous08 wrote: »

Why is 76K gross quoted as the limit in many places and nett figure 960 PW quoted in other places.


Surely a gross figure would be more equitable etc.


Also, how is the estimated pay calculated is it pay in 2019 or the 1st 2 months of 2020

76k Gross is a highly over-simplified number.

The limit on a gross basis will vary from person to person, because people will have different tax credits, different cut-off points (if sharing with spouse/partner) and different tax allowable deductions, all which will have impacted on tax paid in Jan and Feb, and which will consequently impact on their Average Net Pay for Jan/Feb.

In our place we’ve someone on 54k gross who doesn’t qualify because he has additional credits, and a significant transfer of standard rate cut-off from his wife.
We’ve another person on 63k who makes zero pension contributions and only has standard credits, and this comfortably meets the limit

Seve OB

blackwhite wrote: »

76k Gross is a highly over-simplified number.

The limit on a gross basis will vary from person to person, because people will have different tax credits, different cut-off points (if sharing with spouse/partner) and different tax allowable deductions, all which will have impacted on tax paid in Jan and Feb, and which will consequently impact on their Average Net Pay for Jan/Feb.

In our place we’ve someone on 54k gross who doesn’t qualify because he has additional credits, and a significant transfer of standard rate cut-off from his wife.
We’ve another person on 63k who makes zero pension contributions and only has standard credits, and this comfortably meets the limit

A reason why the system is stupid.

Tow

Seve OB wrote: »

A reason why the system is stupid.

It is back of an envelope stuff. Not helped that PUP is too high, so companies who have work have staff leaving and then first they know about it is the Cessation Date coming in on employee's RPNs.

blackwhite

Seve OB wrote: »

A reason why the system is stupid.

We’ve a large numbers of employees going into the scheme this month. We plan to pay the max top-up before penalties kick in.

I’ve had our payroll manager running dummy payrolls to see what the impact is for our people. A significant number of the staff are going to end up actually receiving more net pay than normal due to the reduced tax/usc and zero PRSI on all pay.
I’ve been running some scenarios on how their situation might look when Revenue come looking to collect tax on the subsidy. Lower earners are actually going to end up better off, with unused credits offsetting much of the tax, and the saving from no PRSI whilst on J9 status still outweighing what’s left to pay. Makes no sense but that’s how they’ve set it

garden

I’ve read through the posts and am still not really getting it - I got exactly the same net wage this week as every other week €420 , (except last week where I got €450 )with covid 19 payment - in a nutshell have I basically gotten a pay decrease I.e will I at some point have to pay tax on this?

Heres Johnny

garden wrote: »

I’ve read through the posts and am still not really getting it - I got exactly the same net wage this week as every other week €420 , (except last week where I got €450 )with covid 19 payment - in a nutshell have I basically gotten a pay decrease I.e will I at some point have to pay tax on this?

Yes in a nutshell you are correct but it's not your employer, it's the way the scheme is forced to operate.
However I feel there may be a few twists and turns in this yet as regards people's tax bills.
But at 420 a week your tax bill be very minimal to be honest.

garden

Thanks for reply. Is there a calculator that can work out tact that will be owed, my partner got approx €700 last week - is it really €30 for every €100?

Heres Johnny

garden wrote: »

Thanks for reply. Is there a calculator that can work out tact that will be owed, my partner got approx €700 last week - is it really €30 for every €100?

No, the 30% was an arbritary figure from financial planner Eoin Mcgee on Facebook. Its a general rule of thumb. There's no calculator yet but I'm sure someone will knock one together it would be fairly handy to do in excel to be honest, but Google deloitte tax calculator and it works out what tax is payable based on normal circumstances.
You could fairly easily calculate tax liability using info from your payslip for cumulative amounts actually paid to see the difference between what would normally be paid and what is being paid.

jimmyrustle

I'm a bit lost after watching the Eoin McGee video. Why does he quote a deduction of a third of the weekly payment, when workers earning as low as this in normal circumstances would be paying very low, or no, income tax?

Via the COVID wage payment I got 395 on my first payment off it two days ago. Bit odd seeing as the limit is 410 and my take home pay packets for the weeks prior to the stoppage were well over 600, but I'm not going to email and start arguing about something that with any luck will only be four or five more wage periods.

IF we are to be liable for 1/3 payback, are we better refusing the wage support and remaining on the 350 dole payment? Doesn't seem to make sense- going off the presentation in McGee's video you could take home 400x6= 2400 if laid off for 6 weeks (optimistic timeframe) and be forced to hand back 800 (1600 left), or the alternative is to pocket 2100 in dole payments into the hand tax free.

Am I reading that right?

I haven't removed myself from the 350 dole payment yet as I frankly don't trust what clusterphuck the government might come up with next and the government have implied that it will be easy to return overpayments, nor do I trust that my employer will not cut off the scheme either.

It is, as Ted would say, resting in my account until this blows over. Not sure now whether to keep this and pull out of the wage scheme. Or live off the 350's and lodge the wage scheme money for future repayment.

Clear as snow the government communication during this. Playing a blinder my hole.

Seve OB

jimmyrustle wrote: »

I'm a bit lost after watching the Eoin McGee video. Why does he quote a deduction of a third of the weekly payment, when workers earning as low as this in normal circumstances would be paying very low, or no, income tax?

Via the COVID wage payment I got 395 on my first payment off it two days ago. Bit odd seeing as the limit is 410 and my take home pay packets for the weeks prior to the stoppage were well over 600, but I'm not going to email and start arguing about something that with any luck will only be four or five more wage periods.

IF we are to be liable for 1/3 payback, are we better refusing the wage support and remaining on the 350 dole payment? Doesn't seem to make sense- going off the presentation in McGee's video you could take home 400x6= 2400 if laid off for 6 weeks (optimistic timeframe) and be forced to hand back 800 (1600 left), or the alternative is to pocket 2100 in dole payments into the hand tax free.

Am I reading that right?

I haven't removed myself from the 350 dole payment yet as I frankly don't trust what clusterphuck the government might come up with next and the government have implied that it will be easy to return overpayments, nor do I trust that my employer will not cut off the scheme either.

It is, as Ted would say, resting in my account until this blows over. Not sure now whether to keep this and pull out of the wage scheme. Or live off the 350's and lodge the wage scheme money for future repayment.

Clear as snow the government communication during this. Playing a blinder my hole.

Firstly the dole payment is taxable.

And you feel it is ok to claim this along with getting paid through your employer?

Pistachio19

Via the COVID wage payment I got 395 on my first payment off it two days ago. Bit odd seeing as the limit is 410 and my take home pay packets for the weeks prior to the stoppage were well over 600, but I'm not going to email and start arguing about something that with any luck will only be four or five more wage periods.

If your weekly net pay is over €586 then the wage subsidy for you is capped at €350.

Geminilover196

Hi, would really appreciate some clarification if someone could help please!

Early last week employer announced that they would be moving to the Wage Subsidy Scheme. Great, as currently claiming 2 days social welfare at €40 per day and working a three day week.

I fall below the upper threshold of €960 net pay per week so based on the schemes terms I should receive the €350 per week top up from my employer. Here is my concern after researching the small print of the scheme the average net weekly pay reference months are Jan and Feb 2020 - 9 weeks pay.

In January I received a performance related bonus based on sales from 2019 which increased my net pay. Using this reference period it looks like i am now ineligible for the payment. Total net pay divided by 9 weeks has me above the average €910 per week threshold, even though my normal net weekly pay is well below the limit.

Have I interpreted this correctly? Is there a solution / appeal mechanism?

Thank you for the help!

RCSATELLITES

Hi all. Have some questions here.

I had a company day (1 day annual leave) off for Good Friday. Will I loose this holiday as I am on the covid wage subsidy.

Also was on illness benefit back in Nov dec 2019 but my employer added this on Jan and Feb 2020 pay slips. So now I think I am going to be paid less than my monthly average normal wage. I am in full time employment ( not on reduced time or lay off) what shold I do? I am not working for less especially when the job is exact same but my employer managed to get on the subsidy because of another plant. Let me know your thoughts.

RCSATELLITES

Geminilover196 wrote: »

Hi, would really appreciate some clarification if someone could help please!

Early last week employer announced that they would be moving to the Wage Subsidy Scheme. Great, as currently claiming 2 days social welfare at €40 per day and working a three day week.

I fall below the upper threshold of €960 net pay per week so based on the schemes terms I should receive the €350 per week top up from my employer. Here is my concern after researching the small print of the scheme the average net weekly pay reference months are Jan and Feb 2020 - 9 weeks pay.

In January I received a performance related bonus based on sales from 2019 which increased my net pay. Using this reference period it looks like i am now ineligible for the payment. Total net pay divided by 9 weeks has me above the average €910 per week threshold, even though my normal net weekly pay is well below the limit.

Have I interpreted this correctly? Is there a solution / appeal mechanism?

Thank you for the help!

Hi this might be totally incorrect. But from reading how they calculate the average weekly wage. They use the gross pay then minus the usc,prsi and income tax for Jan and Feb. Maybe the preformance bonus is under a seperate section? Or would it be added directly to your wages. Hoe I work it out is get payslip add gRoss pay for Jan and Feb then take the deductions and divide by 9.

jimmyrustle

Seve OB wrote: »

Firstly the dole payment is taxable.

How can a dole payment be taxable when no other form of social welfare is taxable? As I understood it

Covid19 dole= dole

Covid 19 wage support= government gives your employer your wages up to a maximum of 410.

Why should people getting only the standard 350 pay tax on a welfare payment while some waster on it the last 20 years keeps their whole 205? If it is decided that the Covid dole is dole, and thus untaxable, that leaves the wage subsidy where? Only anything north of the 350 is taxable, or the whole thing is? Taxable at what rate? How and when is it repaid?

This is junior infants level stuff that the likes of Regina Doherty seem to be saying no comment to.

And you feel it is ok to claim this along with getting paid through your employer?

I'll be refunding the money once this blows over (I'm only up a single additional payment) or even this week once we get some clarity i.e. whether I'm better off on the dole or the wage subsidy, whether or not both are taxed or, as you claim, only one is, and if so, why is that, and how much will the other be taxed. You know, the basic questions a taxpayer deserved answered from the people who will be taking said taxes and who are paid very well for the positions they hold and should do their duties as such. So far none of the above have been answered by the government as far as I can see- rather we have had predictions and opinions from tax advisers and journalists. Why would I cancel the normal dole when I might be poorer in the long run on the wage assisted dole? We need clarity on these issues, not opinion pieces from people who don't work for the state.


I don't trust incompetents like Varadkar and Harris as far as I could throw them, they can't even be bothered explaining the basics, and have left it up to opinion pieces re whether these payments really are tax liable.

This thread shouldn't even need to exist. It's the government's job to provide clear, concise breakdowns on these issues, and they simply couldn't be arsed.

Any semblance of them having a decent handle on this whole issue disappeared Friday two weeks ago, when Leo announced only essential workers would be allowed move around, then took an additional 12 hours to bother defining who was an essential worker.

But here, Leo "the borders will regulate themselves" and Harris the NCH budget wizard are "playing a blinder" according to the FG grassroots on Twitter. A pair of utterly bumbling incompetents. And as bad as they are I think Micheal Martin might do worse.

Which is all the worse because I voted FF in Feb.

RCSATELLITES

QUOTE=jimmyrustle;113135204]How can a dole payment be taxable when no other form of social welfare is taxable? As I understood it

Covid19 dole= dole

Covid 19 wage support= government gives your employer your wages up to a maximum of 410.

Why should people getting only the standard 350 pay tax on a welfare payment while some waster on it the last 20 years keeps their whole 205? If it is decided that the Covid dole is dole, and thus untaxable, that leaves the wage subsidy where? Only anything north of the 350 is taxable, or the whole thing is? Taxable at what rate? How and when is it repaid.[/QUOTE]



Most social welfare payments are taxable. But usually if you are only on the social welfare payment (dole) then your personal credits cover the tax to be paid. So you technically don't loose any money. But now with the covid 19 payment people have been working for the first 3 months of the year getting usually a higher payment. So they might owe tax due to the personal credit not being sufficient.
Tax credits for a single person €1,650.00 and paye tax €1,650.00

So only after you get paid ovet the €16,500 do you start paying tax.

So the people on the dole for 20 years might not get over €16,500 per year.

Seve OB

jimmyrustle wrote: »

How can a dole payment be taxable when no other form of social welfare is taxable? As I understood it

Covid19 dole= dole

Covid 19 wage support= government gives your employer your wages up to a maximum of 410.

Why should people getting only the standard 350 pay tax on a welfare payment while some waster on it the last 20 years keeps their whole 205? If it is decided that the Covid dole is dole, and thus untaxable, that leaves the wage subsidy where? Only anything north of the 350 is taxable, or the whole thing is? Taxable at what rate? How and when is it repaid?

This is junior infants level stuff that the likes of Regina Doherty seem to be saying no comment to.



I'll be refunding the money once this blows over (I'm only up a single additional payment) or even this week once we get some clarity i.e. whether I'm better off on the dole or the wage subsidy, whether or not both are taxed or, as you claim, only one is, and if so, why is that, and how much will the other be taxed. You know, the basic questions a taxpayer deserved answered from the people who will be taking said taxes and who are paid very well for the positions they hold and should do their duties as such. So far none of the above have been answered by the government as far as I can see- rather we have had predictions and opinions from tax advisers and journalists. Why would I cancel the normal dole when I might be poorer in the long run on the wage assisted dole? We need clarity on these issues, not opinion pieces from people who don't work for the state.


I don't trust incompetents like Varadkar and Harris as far as I could throw them, they can't even be bothered explaining the basics, and have left it up to opinion pieces re whether these payments really are tax liable.

This thread shouldn't even need to exist. It's the government's job to provide clear, concise breakdowns on these issues, and they simply couldn't be arsed.

Any semblance of them having a decent handle on this whole issue disappeared Friday two weeks ago, when Leo announced only essential workers would be allowed move around, then took an additional 12 hours to bother defining who was an essential worker.

But here, Leo "the borders will regulate themselves" and Harris the NCH budget wizard are "playing a blinder" according to the FG grassroots on Twitter. A pair of utterly bumbling incompetents. And as bad as they are I think Micheal Martin might do worse.

Which is all the worse because I voted FF in Feb.

The Fact is the dole is taxable and it is taxed at your marginal rate. It has been like that for as long as I know. These coved payments are also taxable, it is clearly defined if you read the documents, no opinions required. I can’t really say anymore than that. If you don’t believe me, then speak to a tax advisor. I don’t know what you want the government to spell out. The rules are there, sometimes people aren’t clever enough to understand them and that is why there is tax advisors and accountants. Sure the system was a little confusing when it was announced, but all that’s been done since is to make points a bit clearer for the lay person to get to grips with a bit easier.
One thing that is made very clear is that you must not claim the dole while also being on the scheme.

And finally, yes it can be confusing, that’s why threads like this exist, the help junior infant kids get to grips with it

RCSATELLITES

What is the incentive to go to work full time for the same money as the laid off staff. Both are on the covid 19 wage subsidy.

I am sure someone will say you should be happy to have a job, the laid off staff are still on the pay role and they have a job once the restrictions are over.

Others will say the employer will remember the staff that worked. No they will not all are just a number. People change jobs every few years so not really an incentive. Also employers won't be giving pay rises any time soon as this pandemic is a great excuse.

A thanks from the employer won't cut it unfortunately.

People are still accruing annual leave if working or temp laid off.

No management has been let go and they are not eligible for the covid 19 wage subsidy.
So if their wages can be paid then there is no excuse.

I would like to hear people's thoughts on this.

noodler

RCSATELLITES wrote: »

What is the incentive to go to work full time for the same money as the laid off staff. Both are on the covid 19 wage subsidy.

I am sure someone will say you should be happy to have a job, the laid off staff are still on the pay role and they have a job once the restrictions are over.

Others will say the employer will remember the staff that worked. No they will not all are just a number. People change jobs every few years so not really an incentive. Also employers won't be giving pay rises any time soon as this pandemic is a great excuse.

A thanks from the employer won't cut it unfortunately.

People are still accruing annual leave if working or temp laid off.

No management has been let go and they are not eligible for the covid 19 wage subsidy.
So if their wages can be paid then there is no excuse.

I would like to hear people's thoughts on this.

Because in three months the person on the wage subsidy scheme might have a job.

The person on the 350 pandemic payment will, as things stand, move onto normal JBA/JSA of 203 p.w.


You describe it as a choice but it.wont be for alot of people. To get the pandemic payment, rather than standard JBA/JSA, you must have been made unemployed in the relevant Covid period and the job loss must have been down to covid.

If you are currently on the wage subsidy scheme (i.e. getting paid more than 350 to stay at home. It still have a job) then why would you not want this? Further, if you were to "quit" this situation you'd have further complications with DEASP as you haven't been laid off.

RCSATELLITES

noodler wrote: »

Because in three months the person on the wage subsidy scheme might have a job.

The person on the 350 pandemic payment will, as things stand, move onto normal JBA/JSA of 203 p.w.


You describe it as a choice but it.wont be for alot of people. To get the pandemic payment, rather than standard JBA/JSA, you must have been made unemployed in the relevant Covid period and the job loss must have been down to covid.

If you are currently on the wage subsidy scheme (i.e. getting paid more than 350 to stay at home. It still have a job) then why would you not want this? Further, if you were to "quit" this situation you'd have further complications with DEASP as you haven't been laid off.

Hi unfortunately you don't seem to understand my comment. We are both on the wage subsidy, no one was let go or on the pandemic payment. Just I have to go to work because my product is running on the production line while the other product isn't,so the other guy stays at home with exact same pay as me. Hope that clarifies the situation.

RCSATELLITES

Oh look a proper way of calculating average wage. This is how its done in the UK not a stupid 2 months here. What a shambles using 9 weeks to work out average pay. Stupid you tell me.

Employees whose pay varies
If the employee has been employed for 12 months or more, you can claim the highest of either the:

same month’s earning from the previous year
average monthly earnings for the 2019-2020 tax year
If the employee has been employed for less than 12 months, claim for 80% of their average monthly earnings since they started work.

If the employee only started in February 2020, work out a pro-rata for their earnings so far, and claim for 80%.

Heres Johnny

RCSATELLITES wrote: »

Oh look a proper way of calculating average wage. This is how its done in the UK not a stupid 2 months here. What a shambles using 9 weeks to work out average pay. Stupid you tell me.

Employees whose pay varies
If the employee has been employed for 12 months or more, you can claim the highest of either the:

same month’s earning from the previous year
average monthly earnings for the 2019-2020 tax year
If the employee has been employed for less than 12 months, claim for 80% of their average monthly earnings since they started work.

If the employee only started in February 2020, work out a pro-rata for their earnings so far, and claim for 80%.

It's probably a better way of calculating net pay but I'm administering the Irish system and the UK system for my company and I'll tell you the UK system is causing chaos. You can't work in any shape or form or provide any service for your employer while on their scheme. The Irish system is much more flexible to be honest.

noodler

RCSATELLITES wrote: »

Hi unfortunately you don't seem to understand my comment. We are both on the wage subsidy, no one was let go or on the pandemic payment. Just I have to go to work because my product is running on the production line while the other product isn't,so the other guy stays at home with exact same pay as me. Hope that clarifies the situation.

No, sorry

It might just be me bit I don't understand.

I thought you were making a general critique bit your next post seems to say it's your personal situation?

If you think it'd be any use the feel free to explain again.

Masala

Masala wrote: »

Question.... does an employer HAVE to top up to the level of the Wk1-Wk09 average??

EG.... John worked a ball of overtime for January cost Pat his mate did only bare 39 hrs. They both on same rate. But John average take home for the 9 weeks was say €800 and Pat average (on 39hr weeks as he did very little OT) was €580. If both worked 39 hrs at same rate they would each come put with say €550 for argument sake. What figure has the employer to pay Pat as part of this scheme? Covid19 subsidy + Top up = €800 or Covid19+Topup = €550.

Jeez... this is a minefield!

Bumping the above as could do with feedback on the above before we decide to signup to the scheme

Heres Johnny

Masala wrote: »

Bumping the above as could do with feedback on the above before we decide to signup to the scheme

Answer to your first question is no, employer doesn't have to top up salary on full but can do so if they wish. Or another amount in between.

The guy on 800 a week will get a reclaimable subsidy of 350 as his net pay is over 586 a week and it's capped at 350 in that vsse

The guy on 580 will get a subsidy of 406 which is 70% of his net pay as he is under 586 a week. Bit of an anomaly there but its the way its designed

Id use 550 as target to match each guys pay I wouldn't be aiming for 800 to match his overtime to be honest as he will hardly be working overtime nowadays

Masala

Heres Johnny wrote: »

Answer to your first question is no, employer doesn't have to top up salary on full but can do so if they wish. Or another amount in between.

The guy on 800 a week will get a reclaimable subsidy of 350 as his net pay is over 586 a week and it's capped at 350 in that vsse

The guy on 580 will get a subsidy of 406 which is 70% of his net pay as he is under 586 a week. Bit of an anomaly there but its the way its designed

Id use 550 as target to match each guys pay I wouldn't be aiming for 800 to match his overtime to be honest as he will hardly be working overtime nowadays

Thanks Johnny.... exactly my thoughts as well!!

Heres Johnny

Masala wrote: »

Thanks Johnny.... exactly my thoughts as well!!

It's not perfect but I'm operating it on behalf of my employer. It might say 70% subsidy but in reality it's covering about 50% of the wage bill overall but we are paying everyone full net pay at the moment. That's for 48 employees. We will be trying to keep everyone at 75% of net pay AT LEAST over the 12 weeks but to be honest sales have collapsed and nearly all our customers are closed so we'll see what happens

RCSATELLITES

Heres Johnny wrote: »

It's probably a better way of calculating net pay but I'm administering the Irish system and the UK system for my company and I'll tell you the UK system is causing chaos. You can't work in any shape or form or provide any service for your employer while on their scheme. The Irish system is much more flexible to be honest.

The UK system kind of makes sense. As I will be getting a reduced monthly pay because I was on illness benefit for a few weeks in Feb and this will bring down my average pay. And I am in full time work with nothing different in work load than before the pandemic. While others in the same job different area are laid off, with full pay. Doesn't seem fair to me. Hence why the UK system is more fair in my circumstances.