Minister Donohoe announces update to the Temporary Wage Subsidy Scheme to ensure greater staff retention and links between employer and employee

The Temporary Wage Subsidy Scheme (TWSS) was introduced on 26^th March 2020 to provide income support to eligible employees where the employer’s business activities have been negatively impacted by the COVID-19 (Coronavirus) pandemic.

The aim of the scheme is to maximise staff retention and firm viability by maintaining the link between the employer and employee.  The rate is set with respect to previous average net wage levels.

Many employers (over 43,000 as of today) have registered for the scheme and over 26,000 of these have already received a refund.  Minister Donohoe has been advised by the Revenue Commissioners that over 219,000 employees have already received at least one payment under the scheme, and that approximately 84% of employees have also received a top-up payment from their employer.

Section 28 of the relevant legislation, the Emergency Measures in the Public Interest (Covid-19) Act 2020 makes provision for the Minister for Finance to determine the amount of the temporary wage subsidy, including in relation to those earning in excess of €586 per week (€38,000 pa).   Furthermore, it is acknowledged that as the scheme has been developed at speed there are imperfections and anomalies arising, including for lower-paid employees.  

Therefore, Minister Donohoe has today (Wednesday) announced some further changes to the Scheme which apply to those earning less than €500 per week (approx. €31,000) as well as those earning in excess of €586 per week (€38,000). 

1. Employees with net pay less than €586 per week (€38,000)

• For those employees with previous average net pay less than €412 per week (equivalent to almost €24,400) the subsidy will be increased from 70% to 85% of their previous net weekly pay.  
• For those employees with previous average net pay between €412 and €500 per week (equivalent to €24,400-€31,000), the subsidy will be up to €350 per week. 

In addition, where an employer wishes to pay a greater level of top-up - beyond the outstanding 15% of previous pay- (in respect of employees with net pay less than €412 per week) in order to bring the employee’s  pay to €350 per week then tapering would not be applied to the subsidy. 

There are no changes in respect of those whose previous average net pay was between €500 and €586 per week (equivalent to €31,000-€38,000), who will continue to receive a subsidy of up to 70% of previous net income, up to a maximum of €410 per week.

These changes mean that more employees will now receive a subsidy of €350 per week, and those with previous net pay below €412 per week will now receive a greater level of subsidy. 

2. Employees with net pay in excess of €586 per week (€38,000)

For employees with previous net pay in excess of €586 per week (equivalent to €38,000), a tiered approach will apply.  The maximum subsidy payable for these remains €350 per week.   The tiered approach takes into account both the amount paid by the employer and the level of reduction in pay borne by that employee as follows:

Tapering of the subsidy will apply to all cases where the gross pay paid by the employer and the subsidy exceed the previous average net weekly pay.  This is calculated by subtracting the amount paid by the employer from the previous average net weekly pay.  This is to ensure that no employee would be better off under the scheme.

Minister Donohoe has also determined that the wage subsidy is now available to support employees where the average net pre-Covid salary was greater than €76,000, and their gross post-Covid salary has fallen below €76,000.  The tiered arrangement applicable to gross incomes in excess of €38,000 will apply in such circumstances.

Therefore, if an employee was earning over €76,000 gross and has now  been reduced to below €960 net pay a week,  and their reduction is more than 20% then a subsidy of up to €205 would be payable and if the reduction was more than 40% a subsidy of up to €350 would be payable.   To calculate the level of subsidy payable, current gross pay will be compared with previous average net weekly pay for January/February.  This subsidy will be tapered so as to ensure that the total net income (employer contribution + wage subsidy) does not exceed €960 net per week.

Minister Donohoe said: ‘The Temporary Wage Subsidy Scheme was designed and introduced with great speed. This was done to ensure the greatest number of employees maintained the link with their employee during this difficult time. It stood to reason that there were anomalies that needed to be ironed out to ensure greater fairness and implementation of the scheme. The whole world is facing a time of unprecedented difficulty. Here in Ireland we are working hard to ensure the impact and fallout from what is happening is minimised for our people to the greatest extent possible. Today’s measures serve to reinforce that message and to offer additional comfort to employer and employees in the period ahead’.

Effective date

These determinations have been made by the Minister for Finance [with the consent of the Minister for Employment Affairs and Social Protection], in accordance with Section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020. The determinations will apply for payroll with a pay date on or after the 4 May and received by the Revenue Commissioners on or after that date (no back-dating of increased subsidy will apply). 

Revenue are currently making the necessary changes to their systems to implement these changes and move to phase 2 of the scheme.  This phase will see a personal subsidy amount paid in respect of each employee and recoupment of any amounts overpaid to employers during the introductory interim phase.  

Qualification Criteria

There is no change to the qualification criteria for employers.

The Subsidy Scheme is open to employers who self-declare to Revenue that they have experienced significant negative economic disruption due to Covid-19. They should be able to show that they meet the criteria laid out in Revenue’s published Guidance on Employer Eligibility and Supporting Proofs - www.revenue.ie/en/corporate/communications/documents/guidance-on-employer-eligibility-and-supportingproofs.pdf.

Department of Employment Affairs & Social Protection (DEASP)

The Department of Employment Affairs & Social Protection (DEASP) are contactable to provide and discuss essential information and resources available to companies in the Cork region around Covid-19.

Increase to the payment rate for COVID-19 Pandemic Unemployment Payment:

The payment rate of the new Pandemic Unemployment Payment has increased from €203 to €350 per week. The rate increase is effective from 24th March. The scheme is available to both employees and the self-employed who have lost employment on foot of the COVID-19 pandemic. 

Any employee or self-employed person who has already in receipt of the COVID19 payment or who has applied will automatically get the higher rate from their next payment and they do not need to take any action.

Changes to the Employer Refund Scheme:

• The Employer Refund Scheme introduced on 15th March is no longer accepting applications.  This scheme has been replaced by a new and enhanced Temporary COVID-19 Wage Subsidy Scheme for employers, which will be administered by the Revenue Commissioners.
• Employers who have already signed up for the refund scheme announced on 15th March, and who may have received refunds under the current scheme do not need to reapply.  Revenue will contact them directly to confirm that they meet the conditions for this new scheme.
• Revenue will operate this  Temporary Wage Subsidy Scheme. The scheme, enables employees, whose employers are affected by the pandemic, to receive significant supports directly from their employer. The scheme expected to last 12 weeks from 26 March 2020. Draft legislation governing the scheme will be published shortly.
• The scheme is available for employers who retain staff on payroll; some of the staff may be temporarily not working or some may be on reduced hours and/or reduced pay. Provided the employer meets the conditions set out and subject to the levels of pay to the employees the employer may be eligible for the scheme for some or all of the employees.

To qualify for the scheme, employers must:

• Be experiencing significant negative economic disruption due to Covid-19
• Be able to demonstrate, to the satisfaction of Revenue, a minimum of a 25% decline in turnover
• Be unable to pay normal wages and normal outgoings fully
• Retain their employees on the payroll.

For general issues relating to the scheme, employers should contact Revenue’s National Employer Helpdesk via the myEnquiries system, providing details of the query and a direct dial contact number.

Employers should make sure to:

• Select ‘Employer’s PAYE’
• Then ‘Employer’s PAYE General Enquiry’ when submitting the query through myEnquiries.

Temporary Lay-Offs- Please see below contact details for the offices of the DEASP in Cork City. This is relevant to any employer or employee that are faced with temporary layoffs due to the Covid 19 virus.  In terms of catchment area, all queries from companies based on the northside of the City should go to Hanover Street and all southside addresses go to Abbey Court House.

Contact details for employers: Northside:  Hanover Street: e: leighann.kennedy@welfare.ie / t: 021 4806802, Southside: Abbeycourt House Office: e: eilin.healy@welfare.ie  / t: 021 4943125

Contact Details for Employees Southside queries: e: 2020ach@welfare.ie, Northside queries: e: 2020HanoverSt@welfare.ie

Workplace Relations Commission:t:1890 130 023 / www.workplacerelations.ie

General Information for Employers/Employees: can be found here: COVID-19 (Coronavirus) Information for Employers and Employees

Attached, please find a flyer / poster that can be used in the workplace for information purposes: Illness Benefit for COVID19

Finally, please find some information booklets that will be of interest to employers/employees on the emergency income support measures:

• Short Term Work Support
• DEASC Gen Information Employers & Employees

Department of Business, Enterprise & Innovation  (DBEI)

The DBEI also provides a very comprehensive and useful checklist of issues for enterprise to consider in responding to a COVID-19 outbreak.  This includes Business Continuity Planning, travel advise HSE updates. The information can be found at the following link: DBEI

On the 10th of March, The Minister of Business, Enterprise and Innovation (DBEI), Heather Humphreys TD, announced  details on the package of supports  for businesses impacted by COVID-19.  You can view details of this package here: Businesses impacted by COVID-19

Revenue Commissioners: The Revenue Commissioners have also outlined (13.03.20) some key advice and actions taken to assist small and medium enterprise (SME) businesses experiencing cashflow and trading difficulties arising from the impacts of the virus. More information can  be accessed here - Revenue announce measures to assist SMEs experiencing cashflow difficulties arising from COVID-19

State Agencies: 

Companies should contact their respective state agencies to find out more about what supports they are eligible for:

• IDA: www.idaireland.com
• Enterprise Ireland: www.enterprise-ireland.com
• Local Enterprise Office: www.localenterprise.ie

it@cork are on hand to offer any assistance or advice to our members during these unprecedented times so please do not hesitate to contact us.  Our thoughts are with those affected at this time.

it@cork team: e: admin@itcork.ie, t: +353 21 4868180