Wage Subsidy Scheme Issues

voluntary

I think it's unfair as JB is for job seekers and due to the government imposed lockdown some people are stopped from seeking employment. All people with imposed restrictions on job seeking should be treated the same in a fair system.

Also, I believe for JB you need to be actively seeking a job to qualify, right? If the government tells you that you can't seek a job, then you're not a job seeker, aren't you?

Cafarnacus

I'm sure this question has been asked several times but I'm just failing to get my head around it

I'm working my normal hours, from home. We were advised we would be receiving the 70% wage subsidy scheme in our April payroll, with our employer topping it up, which we did. Our employer did up a report for each of us showing how it will impact each of us individually. I got a refund on my PAYE and USC paid so I'm up a very small amount net this month. Based on employers calculations I am looking at a tax liability of approx €750.00 at the end of the year.

I can't understand how, I'm working my full time hours, doing my normal job, and the only thing I'm gaining at the end of it is a tax liability? Can someone please shed some light for me? Am I completely missing something?

eh i dunno

If restrictions are lifted and people are back working full-time but only getting 70% wages and this puts them below minimum wage what happens then? Can you refuse to work for less than minimum wage?

petes

voluntary wrote: »

I think it's unfair as JB is for job seekers and due to the government imposed lockdown some people are stopped from seeking employment. All people with imposed restrictions on job seeking should be treated the same in a fair system.

Also, I believe for JB you need to be actively seeking a job to qualify, right? If the government tells you that you can't seek a job, then you're not a job seeker, aren't you?

So they will continue to receive their job seekers even though they can't 'seek jobs'.

The €350 payment is for people who were in employment and not now due to Covid-19.
The is no unfairness in this instance.

voluntary

We won't agree on this one. I see a great social injustice in treating 2 citizens seeking employment at the moment, especially considering the fact that both are under the same imposed restrictions. What justifies the fact that one is getting 350 a week today and the second only 200?

There's no fairness whatsoever in that.

petes

voluntary wrote: »

We won't agree on this one. I see a great social injustice in treating 2 citizens seeking employment at the moment, especially considering the fact that both are under the same imposed restrictions. What justifies the fact that one is getting 350 a week today and the second only 200?

There's no fairness whatsoever in that.

One has had a change in circumstances, one has not due to the pandemic.

voluntary

And maybe one is white and one is black, but so what?

Both are now restricted from seeking employment so what's the difference between these two?

The_Chap

voluntary wrote: »

And maybe one is white and one is black, but so what?

Both are now restricted from seeking employment so what's the difference between these two?

One lost their job due to the pandemic, other didn't have one in the first place

The two financial situations would/could be different as far as Revenue are concerned and that's all that matters

For e.g. A person who had a job and now has not due to circumstances outside their control will arguably have more costs associated from being employed, car loan etc.

lots of different arguments for and against, but there is only one opinion that matters - the Revenue's!

kennethsmyth

One thing to note for all employers is that if you are paying staff say 70% or a reduced salary and they are still working and you have not gotten consent you could be taken to WRC or labour court later on. Most employers are aware of this but maybe not the next sentence.

If an employer is topping up the wage to say normal payment net but part of this is a covid payment that has yet to be taxed and will be later an employee could still show that the employer is not paying the full net pay due to them and has done so without consent. Now this is only due to employers who can afford to pay as in reality an adjudicator will take the companies situation into account. However it does point out the subtleties of this covid payment and that its being paid net.

noodler

Is there any issue with employees working full hours under this?

Tow

noodler wrote: »

Is there any issue with employees working full hours under this?

No, but don't expect full pay.

MoonUnit75

Cafarnacus wrote: »

I'm sure this question has been asked several times but I'm just failing to get my head around it

I'm working my normal hours, from home. We were advised we would be receiving the 70% wage subsidy scheme in our April payroll, with our employer topping it up, which we did. Our employer did up a report for each of us showing how it will impact each of us individually. I got a refund on my PAYE and USC paid so I'm up a very small amount net this month. Based on employers calculations I am looking at a tax liability of approx €750.00 at the end of the year.

I can't understand how, I'm working my full time hours, doing my normal job, and the only thing I'm gaining at the end of it is a tax liability? Can someone please shed some light for me? Am I completely missing something?

No, don't think you are missing anything. Seems straightforward from an employee perspective. Most employees on this scheme will be experiencing a pay cut through the back door.

Since the 'net pay' in many cases is the same now a lot won't know what's happened until their tax credits are adjusted for next year and they will be taking home less. Like yours, many businesses are telling employees to put any tax back received aside to pay the eventual tax bill from this but it's unlikely to cover it.

It's called the wage subsidy scheme but for employees it would be better to call it the 'Employment Continuity Tax'.

kennethsmyth

MoonUnit75 wrote: »

No, don't think you are missing anything. Seems straightforward from an employee perspective. Most employees on this scheme will be experiencing a pay cut through the back door.

Since the 'net pay' in many cases is the same now a lot won't know what's happened until their tax credits are adjusted for next year and they will be taking home less. Like yours, many businesses are telling employees to put any tax back received aside to pay the eventual tax bill from this but it's unlikely to cover it.

It's called the wage subsidy scheme but for employees it would be better to call it the 'Employment Continuity Tax'.

All employees need to kick up a fuss on this as revenue are not allowing employers to tip up more than normal net to offset this tax.

Employees are employees, not shareholders or owners who take the gains and risks. Employees are to be paid for their time and experience. People forget this.

snowgal

In the cases above, are employees still receiving their nett pay amount as normal before covid or are they receiving their nett pay and tax back, so getting more than usual pay?

Stratvs

snowgal wrote: »

In the cases above, are employees still receiving their nett pay amount as normal before covid or are they receiving their nett pay and tax back, so getting more than usual pay?

Many will be getting their normal net ( made up largely of the subsidy ) together with some Tax/USC refunds. So actual into hand may be more than previous.

If the employee does not want the refunds ( which will likely be owed back later ) they can request Revenue to issue a new RPN on a week1 basis.

The payroll providers did raise this issue of the refunds of Tax/USC with Revenue and suggested Revenue issuing an automatic W1 RPN but their answer appears to have been they wanted people to get the money and deal with it later.

kennethsmyth

snowgal wrote: »

In the cases above, are employees still receiving their nett pay amount as normal before covid or are they receiving their nett pay and tax back, so getting more than usual pay?

In the cases above i'm commenting on relate to an employee receiving covid and the remainder of net made up for by the employer - nothing related to tax refunds - imagine pay being on a week one basis.

If the employer tops up wages to actual net due they essentially still havent paid the full net due to the employee as the covid element still has to have tax etc paid on it at a later date. ie a reduction in pay.

kieran.

booooonzo wrote: »

Our cfo has confirmed the company would pay any taxes owed on the subsidy.

Thanks. I run a small company and would like to to do this for my employees if possible. How can you do this, I'm guessing revenue will look to collect the tax owed by the employees directly outside of the pay role system. And it would be a simple as me writing a cheque on there behalf.

Stratvs

kieran. wrote: »

Thanks. I run a small company and would like to to do this for my employees if possible. How can you do this, I'm guessing revenue will look to collect the tax owed by the employees directly outside of the pay role system. And it would be a simple as me writing a cheque on there behalf.

Unfortuately no :-

collsoft wrote: »

Just a small note - I cant remember the exact regulations behind this.

But when an Employer pays an Employee's tax liability for them, then that payment becomes a Benefit In Kind charge if it is not repaid by the employee to the employer.

Sorry, my mind is frazzled at the moment so I cant remember the exact regulation, but it is something you need to be careful of.

Seve OB wrote: »

they just have to gross the amount up

IRtax wrote: »

If the company pays the taxes on the subsidy for the employee this is also taxable. Eg if 500 is owed by the employee and your company pays you this 500 they will have to regross this and pay taxes on this for you also.

Seve OB

has anyone managed to download the csv file from ROS?
i can't seem to find it anywhere

Tow

Seve OB wrote: »

has anyone managed to download the csv file from ROS?
i can't seem to find it anywhere

It is under 'Request RPNs', see version 9 of the TWSS FAQ for more details.

blackwhite

Anyone come across any error in the Revenue calculations?

We've approx. 200 staff and downloaded the Revenue CSV to check against our own workings.

We've committed to topping up anyone on the scheme to the max allowable, and as a result we've 10 staff members who only qualify for the €205 max subsidy instead of the €350.

For 2 of those 10 staff members, Revenue are showing a Max allowable Top-Up of €755 (960 less 205) instead of giving the difference between their ARNWP and 205.
If we paid this full amount, it'd result in their Subsidy plus Top-Up being greater that ARNWP.

Anyone else have this error appearing?

Seve OB

another one

anyone looking at their payroll statement of account. i was going to approve ours for April but the figures do not match, yet when i go in and double check my submissions they are all as i have recorded.

if i drill into it, i can see there are refunds of tax which seem to be included in the repayments of the scheme but its all a bit weird.
eg, not the real figures
3rd april
wages subsidy payment liability effect 7,000
wages subsidy tax refund 1,000
we received 8,000 into our account.

10th is similar

17th
wages subsidy payment liability effect 8,000
wages subsidy tax refund 1,000
we received 8,000 into our account????????

24th
no idea what the split is.. they bundled weekly and monthly together as both paid on the same day but seperate files
wages subsidy payment liability effect 40,000
wages subsidy tax refund 10,000
we received 40,000 into our account????????

it is not making sense what they are doing, and no back up to their figures so i can reconcile them.


by the way, how were you guys treating the subsidy in your accounts? i kept a separate control account for the amount we paid and the subsidy we received. different amounts i know, but it was to be reconciled and i figured it would be easier to keep it separate.
maybe i should just bundle it with the PAYE/PRSI/USC and reconcile them all together???

just a bit of thinking out loud, haven't had a chance to spend loads of time at it yet. I might cuddle up beside the missus tonight on the couch with The Wire on the box and a nice spreadsheet

Tow

Many of the formula have changed for the TWSS Operational Phase. In addition Revenue give one Wage Subsidy per person, using their RPN values to divide it between employments.

Here is Revenues TWSS Calculator: https://www.revenue.ie/en/corporate/communications/documents/twss-sample-subsidy-calculator.xlsx

blackwhite

Seve OB wrote: »

another one

anyone looking at their payroll statement of account. i was going to approve ours for April but the figures do not match, yet when i go in and double check my submissions they are all as i have recorded.

if i drill into it, i can see there are refunds of tax which seem to be included in the repayments of the scheme but its all a bit weird.
eg, not the real figures
3rd april
wages subsidy payment liability effect 7,000
wages subsidy tax refund 1,000
we received 8,000 into our account.

10th is similar

17th
wages subsidy payment liability effect 8,000
wages subsidy tax refund 1,000
we received 8,000 into our account????????

24th
no idea what the split is.. they bundled weekly and monthly together as both paid on the same day but seperate files
wages subsidy payment liability effect 40,000
wages subsidy tax refund 10,000
we received 40,000 into our account????????

it is not making sense what they are doing, and no back up to their figures so i can reconcile them.


by the way, how were you guys treating the subsidy in your accounts? i kept a separate control account for the amount we paid and the subsidy we received. different amounts i know, but it was to be reconciled and i figured it would be easier to keep it separate.
maybe i should just bundle it with the PAYE/PRSI/USC and reconcile them all together???

just a bit of thinking out loud, haven't had a chance to spend loads of time at it yet. I might cuddle up beside the missus tonight on the couch with The Wire on the box and a nice spreadsheet

We were able to recalculate it - but you need to go employee by employee.

For any employee reported as J9 in an April payroll, multiply the insurable weeks declared by €410, and add on any tax or USC refund due for that specific employee.

The tax and USC refunded total is shown on your PAYE/USC/PRSI statement of account as a refund presently also.

collsoft

This is not an error.

Under the Wage Subsidy Scheme the total of the Subsidy Payment and the Additional Employer Payment (your Gross Pay) cannot be more than €960 or else the subsidy tapers down.

Also, in order to qualify for a subsidy your Gross Pay has to fall below €960 per week, and that fall has to be at least 20% below the ARNWP

blackwhite wrote: »

Anyone come across any error in the Revenue calculations?

We've approx. 200 staff and downloaded the Revenue CSV to check against our own workings.

We've committed to topping up anyone on the scheme to the max allowable, and as a result we've 10 staff members who only qualify for the €205 max subsidy instead of the €350.

For 2 of those 10 staff members, Revenue are showing a Max allowable Top-Up of €755 (960 less 205) instead of giving the difference between their ARNWP and 205.
If we paid this full amount, it'd result in their Subsidy plus Top-Up being greater that ARNWP.

Anyone else have this error appearing?

collsoft

Hi Seve,

I think keeping a separate control account is the best way, and I would suggest that it needs to be a Balance Sheet item rather than a P&L

Any subsidy payments made to employees should be posted there (dont ask me if its a D or C or else my head will explode), likewise any subsidy payments received from Revenue should be posted there on the other side. The balance on this account should be the amount of money that you will owe Revenue at reconciliation.

Now, any payments of PAYE/USC refund from Revenue are reported separately by Revenue and I think that they are probabally best posted to your usual P30 control account - I have not though this one through for very long, so I am interested in your feedback.

Seve OB wrote: »

another one
by the way, how were you guys treating the subsidy in your accounts? i kept a separate control account for the amount we paid and the subsidy we received. different amounts i know, but it was to be reconciled and i figured it would be easier to keep it separate.
maybe i should just bundle it with the PAYE/PRSI/USC and reconcile them all together???

blackwhite

collsoft wrote: »

This is not an error.

Under the Wage Subsidy Scheme the total of the Subsidy Payment and the Additional Employer Payment (your Gross Pay) cannot be more than €960 or else the subsidy tapers down.

Also, in order to qualify for a subsidy your Gross Pay has to fall below €960 per week, and that fall has to be at least 20% below the ARNWP

I understand the scheme and how the calculations work.

In the Revenue file, for 2 of our employees, if you take the Tier2 Max Wage Subsidy (Tier2MWWS) of €205, and add the Max Top-up defined in the file (Tier2MWEPBT) then the total is coming to €960.00 - despite their calculated ARNWP being less than €960. The rules only allow you to pay higher than ARNWP if the value is less than €350 - so if we were to pay the Max Tier 2 Subsidy and Max Tier 2 Top-UP as per the file, we'd be breaching the ARNWP rule.


Example is below

ARNWP is €943.82

Tier1 Max Subsidy €350
Tier1 Max Top-Up €566.29

If we were to claim the €350, then paying the max top-up to ARNWP would be €593.82 - 63% of ARWNP. To qualify for the €350 we would be capped at a top-up of €566.29

In the file we see Tier1MWWS is €350, and Tier1MWEPBT is €566.29. So far so good.


Because we want to top up to the Max allowed, we will instead claim the €205.

Under the scheme rules, the Maximum top-up allowed is the difference between the Subsidy and the ARWNP - which is €738.82 (943.82 less 205)

However - what we currently see in the file for this employee is:
Tier2 Max Subsidy €205
Tier2 Max Top-Up €755

If we paid these, it would total €960 - €16.24 higher than the employee's ARWNP - which is not allowed under point 1.6 of the Revenue guidance.

collsoft

Sorry BlackAndWhite, I completely misread your question, and missed your point altogether.

You are correct that this appears to be wrong, and your calculations are correct, tapering begins at either €593.86 in Tier 1 or €738.82 in Tier 2

I dont suppose you could post the two relevant lines from your CSV with all of the personal information (name, PPSN, Employement ID etc) removed/blanked.

I would like to pass this up to the development team in Revenue to review.

I have checked our own calculation code and for an ARNWP that you mentioed we would taper at the amounts you calculated.

However, when the employer has imported a CSV file then we give the figures in the CSV file precedence over our own calculations and would taper at the values in the file.

Also, as far as I know Revenue use the same figures in the CSV file to perform the tapering on their side.

Thanks,

Jason

blackwhite wrote: »

I understand the scheme and how the calculations work.

In the Revenue file, for 2 of our employees, if you take the Tier2 Max Wage Subsidy (Tier2MWWS) of €205, and add the Max Top-up defined in the file (Tier2MWEPBT) then the total is coming to €960.00 - despite their calculated ARNWP being less than €960. The rules only allow you to pay higher than ARNWP if the value is less than €350 - so if we were to pay the Max Tier 2 Subsidy and Max Tier 2 Top-UP as per the file, we'd be breaching the ARNWP rule.


Example is below

ARNWP is €943.82

Tier1 Max Subsidy €350
Tier1 Max Top-Up €566.29

If we were to claim the €350, then paying the max top-up to ARNWP would be €593.82 - 63% of ARWNP. To qualify for the €350 we would be capped at a top-up of €566.29

In the file we see Tier1MWWS is €350, and Tier1MWEPBT is €566.29. So far so good.


Because we want to top up to the Max allowed, we will instead claim the €205.

Under the scheme rules, the Maximum top-up allowed is the difference between the Subsidy and the ARWNP - which is €738.82 (943.82 less 205)

However - what we currently see in the file for this employee is:
Tier2 Max Subsidy €205
Tier2 Max Top-Up €755

If we paid these, it would total €960 - €16.24 higher than the employee's ARWNP - which is not allowed under point 1.6 of the Revenue guidance.

collsoft

I just checked our own file and we have one employee with an ARNWP of €935.87 which is very close to yours.

ARNWP €935.87
Tier1 €561.52
Tier1MWWS €350.00
Tier1MWEPBT €561.52
Tier2 €748.70
Tier2MWWS €205.00
Tier2MWEPBT €730.87
Tier3 €748.71
Tier3MWWS €0


There can be some oddities for employees with multiple employments, but generally these work to reduce the subsidy and introduce tapering earlier

blackwhite wrote: »

I understand the scheme and how the calculations work.

In the Revenue file, for 2 of our employees, if you take the Tier2 Max Wage Subsidy (Tier2MWWS) of €205, and add the Max Top-up defined in the file (Tier2MWEPBT) then the total is coming to €960.00 - despite their calculated ARNWP being less than €960. The rules only allow you to pay higher than ARNWP if the value is less than €350 - so if we were to pay the Max Tier 2 Subsidy and Max Tier 2 Top-UP as per the file, we'd be breaching the ARNWP rule.


Example is below

ARNWP is €943.82

Tier1 Max Subsidy €350
Tier1 Max Top-Up €566.29

If we were to claim the €350, then paying the max top-up to ARNWP would be €593.82 - 63% of ARWNP. To qualify for the €350 we would be capped at a top-up of €566.29

In the file we see Tier1MWWS is €350, and Tier1MWEPBT is €566.29. So far so good.


Because we want to top up to the Max allowed, we will instead claim the €205.

Under the scheme rules, the Maximum top-up allowed is the difference between the Subsidy and the ARWNP - which is €738.82 (943.82 less 205)

However - what we currently see in the file for this employee is:
Tier2 Max Subsidy €205
Tier2 Max Top-Up €755

If we paid these, it would total €960 - €16.24 higher than the employee's ARWNP - which is not allowed under point 1.6 of the Revenue guidance.

blackwhite

collsoft wrote: »

I just checked our own file and we have one employee with an ARNWP of €935.87 which is very close to yours.

ARNWP €935.87
Tier1 €561.52
Tier1MWWS €350.00
Tier1MWEPBT €561.52
Tier2 €748.70
Tier2MWWS €205.00
Tier2MWEPBT €730.87
Tier3 €748.71
Tier3MWWS €0


There can be some oddities for employees with multiple employments, but generally these work to reduce the subsidy and introduce tapering earlier

We've over 100 employees on the WSS, and for all except these 2 the calculations are correct. We some whose ARWNP is within a few cent of these employees, so doesn't make any sense as to how these two fell through the cracks.

In both cases, they return a Tier2MWEPBT of €755.00 when per the rules they should have a lower value (€16.24 of a difference in one case; €0.39 in the other)

My previous post has the ARWNP, as well as the Tier 1 and Tier 2 MWWS and MWEPBT, so should be able to work from that