As the Deputy will be aware this is a matter for my colleague, the Minister for Finance.
I understand that the legislation underpinning the Temporary Wage Subsidy Scheme (TWSS) is contained in Section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020. Of necessity, the legislation and the scheme itself were developed very quickly to support the urgent Government objective of getting much needed assistance to employers and employees that have been seriously affected by the pandemic.
The TWSS builds on data returned to Revenue through its real-time PAYE system. It must be accepted that the underlying legislation and the scheme itself simply cannot be tailored to meet every individual unique set of circumstances for either employers or employees.
The core principles of the scheme, as prescribed in the underlying law, are that –
- the business is suffering significant negative economic impact due to the pandemic,
- the employees were on the payroll at 29 February 2020, and
- the employer had fulfilled its PAYE reporting obligations for February 2020 by 15 March 2020.
The changes to Revenue’s systems required to fully implement the TWSS have been delivered incrementally since the scheme commenced on 26 March 2020. The latest phase of the scheme implements the revised subsidy rates, as determined by the Minister for Finance, in accordance with the legislation and is effective from 4 May 2020 for most employees. This phase is based on providing employers with details of the maximum personal subsidy amount to be paid to individual employees based on their previous average net weekly pay.
On 15 April 2020, the Minister for Finance announced further updates to the TWSS. Included in the updates were measures to increase the wage subsidy for certain lower paid employees. In effect, for those employees with previous net pay of less than €586 per week, the amount of the temporary wage subsidy shall not exceed €410 per week in accordance with the following principles:
- an 85% subsidy shall be payable in the case of employees whose average net weekly pay does not exceed €412; and
- a flat rate subsidy of up to €350 shall be payable in the case of employees whose average net weekly pay is more than €412 but not more than €500.
In addition, where an employer wishes to pay a greater level of top-up, in respect of employees with net pay of less than €412 per week, in order to bring the employee’s pay to €350 per week, then tapering would not be applied to the subsidy.
These changes to the TWSS mean that more employees will now receive a subsidy of €350 per week, and those with previous net pay below €412 per week will now receive a greater level of subsidy.
These new rates have been fully operational for payroll submissions made on or after 4 May 2020, with a pay date on or after that same date.
The changes announced allow the concentration of resources to protect incomes, in a proportionate way having regard to available resources, employer contribution and the broader suite of COVID-19 related supports put in place by the Government.
Currently, the Minister for Finance has no plans to change the average wage calculation to a different period.
