Dáil Éireann Debate, Wednesday - 27 January 2021
198. Deputy Fergus O'Dowd asked the Minister for Finance if a response will issue regarding concerns raised (details supplied) in respect of the temporary wage subsidy scheme and possible issues arising; the measures that should be undertaken in such circumstances; and if he will make a statement on the matter. [3853/21]
View answerThe Temporary Wage Subsidy Scheme (TWSS) was introduced on 26 March 2020 to provide income support to eligible employees where the employer’s business activities were negatively impacted by the COVID-19 pandemic. The scheme operated until 31 August 2020 and was replaced by the Employment Wage Subsidy Scheme (EWSS) on 1 September 2020.
To ensure payments were made to employees as quickly as possible, Revenue operated a ‘transitional phase’ of the TWSS from late March until 3 May 2020. The ‘transitional phase’ provided a subsidy of 70% of the average net weekly pay up to maximum of €410 in respect of eligible employees.
On 4 May 2020 the TWSS moved to the ‘operational phase’ and included increased subsidy rates of up to 85%, subject to various maximum payments. During this phase, the subsidy amount paid to employers was based on each employee’s Average Revenue Net Weekly Pay (ARNWP ), which was calculated using average net earnings in January/February 2020.
According to Revenue’s records, the person in question had three active employments in 2020, with one employer participating in the TWSS. This employer started operating the scheme in April 2020 and the person first received a subsidy of €260.04 on 30 April 2020. Subsequent monthly payments from May to August 2020 were reported (to Revenue) by the employer in respect of the person, indicating subsidy payments of €315.77. The amount of subsidy paid to the person corresponds with his ARNWP and the applicable rates of subsidy due to him under the scheme.
Revenue has confirmed that it is engaging directly with the employer regarding the actual amount of TWSS that was paid to the person. Once the amounts are confirmed, Revenue will ensure any necessary adjustments are made by the employer to the person’s 2020 salary record, which will impact (reduce) his taxable income for the year.
The TWSS payments correctly received by the person are subject to income tax and Universal Social Charge (USC). The amount due can be reduced by the allocation of any unused tax credits for 2020 or additional tax credits such as health expenses. Any remaining balance at that point will be collected, interest free, over four years from 1 January 2022 by reducing tax credits, thereby minimising any financial hardship to the greatest extent possible.
