Dáil Éireann Debate, Thursday - 1 October 2020
99. Deputy Joe O'Brien asked the Minister for Finance if the Revenue Commissioners will be instructed to conduct an audit and review of the operation of the temporary wage subsidy and employment wage subsidy schemes in a company (details supplied) in view of reports from employees that they have been in receipt of pay below the minimum mandated by the schemes; and if he will make a statement on the matter. [27979/20]
Amharc ar fhreagraThe Temporary Wage Subsidy (TWSS) was in place for 22 weeks between 26 March and 31 August. It was introduced as an emergency income support for employees of vulnerable firms where turnover had reduced by at least 25% during the second quarter of the year while the strictest public health measures were in place to stop the spread of the COVID-19 virus.
Under the TWSS, the income support was paid via the employer so as to maintain the link between the employee and employer insofar as was possible and the amounts were refunded to the employer by Revenue who administered the scheme on behalf of the State.
Under Section 851A of the Taxes Consolidation Act 1997 Revenue is precluded by reason of its taxpayer confidentiality obligations, from providing any details in relation to individual taxpayers including the company in question.
I would like to assure the Deputy that, by design, it is not possible for an employer to claim more of a subsidy under the TWSS than was paid to their employees. This is because the system used to make the payments was built upon employer payroll returns to Revenue under the PAYE system and the claim for the subsidy is based on the amount paid to the workers as recorded on the payroll return. It is not possible that an employer could have withheld a subsidy payment from their workers and the legislation required the employer to include the subsidy as part of the employees’ wages and identify the amount of the subsidy paid to the employee on the employees’ payslip.
Employers were required to download information provided by Revenue based on their January and February payroll and use it to calculate the wage subsidy for an employee. There was no obligation on an employer to claim the maximum amount of subsidy for an individual employee. It is therefore possible that the amount of subsidy that was claimed and recorded was less than the worker expected, based on the publicised maximum limits of the TWSS.
Section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020, the employer was expected to make best efforts to maintain the employee’s net income, as reflected in the average net weekly payment for January and February 2020, for the duration of the scheme.
However, the individual worker’s entitlements and rights in an employment context, what wages an employer may have been legally obliged to pay employees in respect of hours worked and the employer’s capacity to pay wages to employees in light of the impact of the Covid-19 pandemic had on the employer’s business are all matters that are outside the remit of the TWSS.
The legislation also placed the administration of the TWSS under the care and management of Revenue. In carrying out this important role, Revenue is conducting a programme of compliance checks on all employers who availed of the scheme to confirm that they met the eligibility criteria, and crucially that employees received the correct amount of subsidy due to them.
I am advised by Revenue that it is in the process of carrying out compliance checks on the 66,000 employers who participated in the TWSS scheme to ensure that they were properly eligible to receive these monies and that the supports were properly paid out to qualifying employees. I understand that, to date, checks have been initiated in respect of some 35% of TWSS employers representing some 67% of employments supported by the scheme. These checks will continue for the next number of months. Revenue advise that their enquiries to date have indicated high levels of compliance by employers with the requirements of the scheme.
I am further advised that Revenue intends to conduct a reconciliation exercise for employers who participated in the scheme to compare the refunds paid to an employer against the amount of subsidy payable to each employee per pay date under the conditions of the scheme. The aim of this exercise is to determine the amount of TWSS, if any that an employer may owe back to Revenue.
I understand that an employer may be required to repay amounts of TWSS where the employer has not paid the subsidy amount to the specified employee or where the employer was not entitled to receive the subsidy in the first place as it did not meet the qualifying criteria. In addition, where an employee does not meet the eligible employee requirement and received subsidy amounts, the employer will also be required to refund these amounts to Revenue.
The Employment Wage Subsidy Scheme (EWSS) replaced the TWSS from 1 September. To qualify for EWSS, an employer must have tax clearance. An employer will also be required to demonstrate to the satisfaction of Revenue that its business will experience a 30% reduction in turnover or in customer orders in the period between 1 July and 31 December 2020 and that Covid-19 is the cause of this disruption. An employer will have a monthly ongoing obligation to review its eligibility for the scheme.
To ensure that the EWSS scheme is operated as intended by employers, Revenue will undertake an assurance check programme at a later date.
I wish to emphasise that the information outlined above relates to the general operation of TWSS and EWSS and does not relate to any one employer or a small group of employers within any one industry.
