Revenue to implement changes to Temporary Wage Subsidy Scheme announced by Minister for Finance

Yesterday (15/04/2020), Minister for Finance, Paschal Donohoe T.D., announced further changes to the Temporary Wage Subsidy Scheme which will apply to those earning up to €500 per week (approx. €31,000) as well as those earning in excess of €586 per week (€38,000). Details of the Minister’s determinations can be found in letter from Minister for Finance dated 16 April 2020.

The details on the changes to the Temporary Wage Subsidy Scheme are now available on Revenue’s Temporary COVID-19 Wage Subsidy Scheme webpage. Key changes to the scheme include:

  • An 85% subsidy for employees whose previous average net weekly pay does not exceed €412.
  • In respect of employees receiving an 85% subsidy, no tapering of the subsidy will apply where an employer makes a ‘top up’ payment of more than 15% of the employee’s pre-Covid crisis pay in order to bring the total new salary (i.e. subsidy plus gross ‘top up’ pay) to €350 net.
  • A flat rate subsidy of up to €350 will be payable in the case of employees whose previous average net weekly pay is more than €412 but not more than €500.
  • For employees with previous net pay in excess of €586 per week, including those whose previous net pay exceeded €960 per week, a tiered approach will apply. The maximum subsidy payable is €350 per week with the tiered approach taking into account both the amount paid by the employer and the level of reduction in pay borne by the employee.
  • For employees whose current net pay exceeds €960 per week (€76,000 gross) no subsidy applies regardless of the level of any reduction in pay.

Revenue has confirmed that the new subsidy rates and the relevant tapering will become fully operational for payroll submissions made on or after 4 May 2020, with a pay date on or after that same date.

Until 4 May 2020, the current transitional arrangements apply whereby eligible employers will receive a refund of the maximum subsidy of €410 in respect of each eligible employee, regardless of the employee’s income. However, for administrative purposes and to allow for future reconciliation of subsidy payments made, it is recommended that employers only pay an amount equivalent to the likely final subsidy to each employee when running their payroll.

Revenue would like to remind employers that there is no change to the qualifying criteria for the scheme. If an employer’s business is experiencing significant negative economic disruption due to Covid-19 they can register for the scheme in three simple steps.

 [Ends 16/04/2020]