Dáil Éireann Debate, Wednesday - 31 March 2021
63. Deputy Paul Murphy asked the Minister for Finance the amounts due to be returned from employers for overpayments of the temporary wage subsidy scheme and employment wage subsidy scheme; the manner in which this will be carried out; and if he will make a statement on the matter. [17209/21]
Amharc ar fhreagraThe Temporary Wage Subsidy (TWSS) was in place between 26 March and 31 August 2020 and was introduced as an emergency income support for employees of vulnerable firms whose businesses had been negatively impacted by COVID restrictions and whose turnover had reduced by at least 25% during Q2 while the strictest public health measures were in place. The support was paid via the employer so as to maintain employment links between the employee and employer insofar as was possible and, to that end, the rate of Employers' PRSI was also significantly reduced to 0.5%. The level of income given to each individual employee was based on previous wages received in January and February 2020. Over 66,500 employers received a subsidy under the TWSS with payments worth just under €2.9 billion paid out to a total of 664,000 workers.
The TWSS amounts due to be returned from employers (reconciliation balances) arise primarily due to the rapid introduction of the scheme as an emergency response to the Covid-19 pandemic in early 2020. For the initial ‘transitional phase’ from 26 March to 3 May 2020, Revenue operated a simplified process so that employers could be supported as quickly as possible and, as an interim measure, paid employers the maximum subsidy amount of €410 per week in respect of each employee. Revenue provided extensive guidance on how to calculate the correct subsidy amount due and employers made a declaration that they would return any overpayments. Most of the balances now repayable relate to this phase rather than the ‘operational phase, which ran from 4 May 2020 to 31 August 2020.
Revenue has recently completed the reconciliation between the TWSS subsidy amounts paid to employers in respect of their employees and the actual amounts correctly due and paid to them. From the initial analysis, 41% of employers are in a balanced position, 3% of employers are due additional subsidy payments totalling €1.4m and 56% of employers have reconciliation balances to be repaid, totalling €224 million. Of this sum, approximately €90 million has already been repaid.
Revenue has at this stage notified most employers of their TWSS balance, other than a small number of more complex cases where calculations are still being finalised. Revenue appreciates that employers will wish to review these figures and ensure that all payments to their employees have been correctly reported. To facilitate these reviews, a period of three months, to end June 2021, is available to examine the data, make any necessary amendments and repay any amounts owing at that point, thereby finalising the reconciliation process.
Any reconciliation balance owing at end June 2021 may be paid to Revenue in similar manner to a tax liability. However, to ensure that these liabilities do not cause undue hardship to businesses at this difficult time, I introduced measures in the Finance Act 2020 to extend the Tax Debt Warehousing provisions to include any amounts owing in respect of TWSS. Employers not in a position to avail of Tax Debt Warehousing may request a phased payment arrangement from Revenue. Where employers do not avail of the opportunity to finalise matters by end June, Revenue will consider the current reconciliation balance as owing and will collect the outstanding amounts.
This is a historic issue as the TWSS was replaced by the Employment Wage Subsidy Scheme (EWSS) from 1 September 2020. The EWSS operates differently to the TWSS and is not included in the reconciliation process.
