Dáil Éireann Debate, Wednesday - 24 March 2021
488. Deputy Michael Healy-Rae asked the Minister for Finance if he will address a matter regarding the temporary wage subsidy scheme (details supplied); and if he will make a statement on the matter. [15309/21]
Amharc ar fhreagraThe Temporary Wage Subsidy Scheme (TWSS) was introduced on 26 March 2020. It was legislated for in section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020 and was an emergency measure to deal with the impact of the Covid-19 pandemic on the economy. Over 66,500 employers were supported through the TWSS in respect of more than 664,000 employees at a cost of €2.9bn. The scheme operated until 31 August 2020 and was replaced by the Employment Wage Subsidy Scheme (EWSS) from 1 September 2020.
Payments made under the TWSS were regarded as income supports and therefore share the characteristics of income. It is important to note that other income earners in receipt of comparable ‘normal wages’ are taxable on those wages and in the interest of equity, payments under the TWSS are subject to income tax and Universal Social Charge (USC). While income tax and USC on most income is deducted in real-time as and when the person is paid, the TWSS payments were not taxed until year end due to the Government’s overarching priority of ensuring payments were made to employers and employees impacted by the COVID-19 pandemic as quickly as possible.
Where a TWSS or Pandemic Unemployment Payment (PUP) related liability arose at the end of 2020, taxpayers have the option to pay the amount owed on an interest free basis over four years from 1 January 2022 through a reduction of tax credits, thereby reducing the potential for financial hardship to the greatest extent possible. This arrangement is not required for 2021 as both PUP and EWSS payments are taxed in the normal ‘real-time’ manner.
Revenue has advised me that while it is not possible from the information provided to comment further on the case referenced by the Deputy, the final tax liability is dependent on the couple’s joint income for the year (2020), including the total TWSS received.
