Dáil Éireann Debate, Wednesday - 3 June 2020
89. Deputy Michael McGrath asked the Minister for Finance if the Revenue Commissioners determined that an employer did not qualify for the temporary wage subsidy scheme after the subsidy was provided, if the liability for repaying the Revenue Commissioners falls on the employer and not the employee; if there are protections for employees that are of the view their employer does not qualify; and if he will make a statement on the matter. [9049/20]
Amharc ar fhreagraThe legislation governing the Temporary Wage Subsidy Scheme (TWSS) is set out in section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020. The administration of the TWSS is under the care and management of Revenue.
The burden of compliance in relation to the TWSS rests solely with the employer rather than the employee.
Any amount due to be refunded to Revenue under the TWSS, where the employer was not entitled to receive the wage subsidy in respect of the employee, is treated as if it were tax due and payable by the employer from the date the wage subsidy amount in question had been paid by Revenue and is payable by the employer.
Additionally, I am advised by Revenue as follows.
Of necessity, Revenue’s primary focus in operating the TWSS so far has been on providing a timely and efficient customer support service to ensure that much needed financial assistance is paid to employers and employees as quickly as possible. In due course, Revenue will be undertaking a comprehensive programme of compliance checks and interventions in relation to employer eligibility for the scheme. While the scheme operates at employer level on largely self-assessment principles, Revenue will expect businesses to be able to produce relevant supporting documentation when requested to do so and to fully engage with Revenue on any follow up discussions or checks. Eligibility for the TWSS is initially determined largely on the basis of the self-assessment and declaration by the employer concerned, combined with a risk focused follow up verification by Revenue involving an examination of relevant business records where that is considered necessary.
Revenue further advises that where an employer has been paid a wage subsidy in respect of an employee and it transpires that the employer has not passed on the wage subsidy to the employee, or that the employer was not entitled to receive the wage subsidy in respect of the employee, the relevant law requires that the employer must refund the wage subsidy amount to Revenue. Any amount due to be so refunded to Revenue is treated as if it were tax due and payable by the employer from the date the wage subsidy amount in question had been paid by Revenue and is automatically so due and payable by the employer without the making of an assessment. However, where necessary, Revenue may make an assessment to recover the amounts in question and the provisions of tax law governing assessments to income tax, appeals against such assessments and the collection of and recovery of income tax apply in relation to the assessment, collection and recovery of wage subsidy amounts from employers. In other words, the full suite of tax collection and enforcement powers, including the charging of interest on amounts due to be refunded by employers, is available to Revenue to recover wage subsidy amounts due to be refunded by employers.
Section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020 also provides for penalties for abuses of the scheme but only in certain prescribed circumstances. Thus, an employer is liable to a penalty of €4,000, where the employer fails to include in, and separately identify in, the wage slips legally required to be given to employees under the Payment of Wages Act 1991 the amount of the wage subsidy. Where the employer who fails to comply is a body of persons, the secretary of that body is liable to a separate penalty of €3,000. These penalties are designed to ensure transparency around the wage subsidy and to protect employees who are entitled to know what wage subsidy the employer has received in respect of them.
There are more severe criminal penalties where an employer knowingly or wilfully delivers an incorrect return or statement, or knowingly or wilfully furnishes any incorrect information, in connection with the temporary wage subsidy scheme or where a person knowingly assists another person to furnish incorrect information in relation to the scheme. The penalties can be a fine of up to €5,000 and/or imprisonment for a term not exceeding one year in the case of a summary conviction and a fine of up to €126,970 and/or imprisonment for a term not exceeding 5 years in the case of a conviction on indictment. The penalties in question are severe because they are designed to protect against deliberate fraud by unscrupulous employers seeking to abuse a generous and expensive State support. However, given the way the TWSS is structured, in that the employer must have been compliant with its PAYE/PRSI/USC reporting obligations and the employee must have been on the employer’s payroll at 29 February 2020, the opportunity for deliberate fraud is limited.
Finally, I would add that if employees have concerns about their employers incorrectly operating or availing of the TWSS, it is open to them to contact Revenue about their concerns.
