Temporary COVID-19 Wage Subsidy Scheme Update 5th May 2020

Revenue have issued a further update to their Frequently Asked Questions document (version 9) – see link below.

The scheme has now moved from the Transitional Phase to the Operational Phase.

A summary of the main clarifications arising from the update are:

Update to calculations

Revenue have now updated their system and will now provide average wage values as a downloadable file from ROS for employers.

During the Operational Phase of the scheme (which is in place now) Revenue will calculate the Average Revenue Net Weekly Pay (ARNWP) in accordance with the scheme rules and the maximum weekly wage subsidy (MWWS) for each employee and provide these to employers for use in the payroll process. This data will be downloaded via ROS in a CSV file.

85% Subsidy allowed from 4 May 2020

From 4 May 2020, the following wage subsidy rates apply:

For Average Revenue Net Weekly Pay (ARNWP) not more than €586

• Where the ARNWP does not exceed €412, a subsidy of 85% of ARNWP, to a maximum of €350, is applicable.
• Tapering Exception. Where the ARNWP does not exceed €412, the employer may pay an additional gross payment (gross pay) such that the gross pay plus the temporary wage subsidy does not exceed €350 per week. The effect of this is that an employee earning less than €412 per week will not have their wage subsidy tapered where the combined wage subsidy plus their gross pay does not exceed €350.
• Where the ARNWP is more than €412 but not more than €500; a subsidy of €350 is applicable.
• Where the ARNWP is more than €500 but not more than €586, a subsidy of 70% of ARNWP is applicable to a maximum of €410.

For ARNWP greater that €586 per week but not more than €960 per week

Where the eligible employee’s ARNWP is greater than €586 per week but not more than €960 per week and the employee’s current gross pay, as reported in the payroll submission, is:

• not more than 60% of the ARNWP, a subsidy of €350 is applicable.
• more than 60% and not more than 80% of the ARNWP, a subsidy of €205 is applicable.
• more than 80% of the ARNWP, no subsidy is payable and J9 PRSI class should not be applied.

Employees Previously Earning over €76,000 gross per annum

Where an employee was previously earning more than €76,000 gross per year and has seen a reduction in earnings

• Of 20% or more the employee is now entitled to a subsidy value of up to €205 per week
• Of 40% or more the employee is now entitled to a subsidy value of up to €350 per week

The total net pay for any employee in receipt of the wage subsidy must not exceed 960 per week this includes the employers contribution and the Wage subsidy but it does not include any tax or USC refunds due to the employee.

The Revenue guidance also states that the gross payment to an employee per week cannot exceed €960.

Re-Hired Employees

Revenue have stated that Employees rehired after 1 May 2020 will not be included in the 4 May 2020 Employer CSV file. Revenue are investigating options to facilitate the inclusion of such rehires at a future date. Until then, J9 submissions for employees rehired after 1 May 2020 will be processed but rejected for refunding. It is our expectation, that at a future date, Revenue will reprocess all the submissions received from the employee’s rehire date and refund where appropriate.

If you have any queries please contact one of the Keogh Ryan Tierney Team

Link to Revenue FAQs version 9:

https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-twss.pdf