Wage Subsidy Scheme Issues

je551e · 22-04-2020 11:18am

Hi,

Can you get a breakdown of what the revenue have paid you? Received a lot more Subsidy then my company should have done.

TIA

The_Chap · 22-04-2020 1:00pm

je551e wrote: »

Hi,

Can you get a breakdown of what the revenue have paid you? Received a lot more Subsidy then my company should have done.

TIA

there is no breakdown as far as I know, Revenue are overpaying currently as per their latest guidelines here :> https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf

They are putting the onus on the employer to reconcile and ensure you keep a record of what you can claim vs what they have paid.

Page 22 S.4.13 has the following:-

"Will employers be entitled to the full Subsidy amount under the transitional arrangements?"

During the transitional phase, employers will receive €410 subsidy per week for each employee that they have made
a PRSI Class J9 submission for, regardless of the amount of the subsidy actually paid to the employee. In many cases
this amount will exceed the subsidy that the employee is entitled to receive for that week and in these cases, the
employer is obliged to hold the excess of the subsidy payment received over the amount of subsidy actually to each
employee.
In the operational phase of the scheme, this excess amount will be taken into account by Revenue when paying
future subsidy payments to employer or will be repaid directly to Revenue."

And Page 27 S.6 applies also..

"Details of both the reconciliation process and the process for employers to follow when returning excess Wage Subsidy Scheme funds to Revenue will be published in due course.
In the interim, to assist in their future reconciliation, employers should continue to retain records of subsidy payments made to employees, records of subsidy refunds and tax refunds received from Revenue and hold any excess
of the subsidy payments received for offset against future subsidy payments or for future repayment to Revenue."

Will23 · 22-04-2020 1:33pm

The_Chap wrote: »

^^^ this

the subsidy is to enable your employer to keep you employed and at least pay you the wage subsidy, not to help keep existing incomes levels maintained

This makes sense, and in many ways I see the point of this.

However if you’ve agreed to a 30-40% pay cut in order to assist the company with cash flow, you would expect that the employer would maintain their contribution at that level and the subsidy could be adjusted to lessen the impact to the employee, who is clearly also taking some of the ‘pain’.

In particular where the workload remains at the same level but the cash flow has reduced (been delayed) for whatever reason.

In the scenarios described about this will probably all become clearer in early May and that element of the scheme is only applicable from May 4th I think.

fungie · 22-04-2020 3:42pm

Will23 wrote: »

This makes sense, and in many ways I see the point of this.

However if you’ve agreed to a 30-40% pay cut in order to assist the company with cash flow, you would expect that the employer would maintain their contribution at that level and the subsidy could be adjusted to lessen the impact to the employee, who is clearly also taking some of the ‘pain’.

In particular where the workload remains at the same level but the cash flow has reduced (been delayed) for whatever reason.

In the scenarios described about this will probably all become clearer in early May and that element of the scheme is only applicable from May 4th I think.

This is the point I was trying to make. It reflects very poorly on employers who do this. I work for an Irish multinational owned by a larger international company and not some start up. When the subsidy ends they are going to have to pay subsidy amount themselves anyway. It just smacks of taking advantage of the system, considering they are making over 10% of the workforce redundant too.

The_Chap · 22-04-2020 4:07pm

Will23 wrote: »

This makes sense, and in many ways I see the point of this.

However if you’ve agreed to a 30-40% pay cut in order to assist the company with cash flow, you would expect that the employer would maintain their contribution at that level and the subsidy could be adjusted to lessen the impact to the employee, who is clearly also taking some of the ‘pain’.

In particular where the workload remains at the same level but the cash flow has reduced (been delayed) for whatever reason.

In the scenarios described about this will probably all become clearer in early May and that element of the scheme is only applicable from May 4th I think.

fungie wrote: »

This is the point I was trying to make. It reflects very poorly on employers who do this. I work for an Irish multinational owned by a larger international company and not some start up. When the subsidy ends they are going to have to pay subsidy amount themselves anyway. It just smacks of taking advantage of the system, considering they are making over 10% of the workforce redundant too.

what the employer can do and should do are very different views unfortunately

fungie · 22-04-2020 8:58pm

The_Chap wrote: »

what the employer can do and should do are very different views unfortunately

That is a fact!

Happy4all · 23-04-2020 12:10am

kennethsmyth wrote: »

This is why I believe items mentioned above are causing confusion. The subsidy forms part of your net pay at whatever level your employer has reduced it to.

Eg (from May) if your normal pay is 1000, and employer has reduced it to 80% then it will be 800. The subsidy is not added onto the 800 but forms part of it. The subsidy is essentially helping the employer pay the 80% of pay.

However what you need to be aware is that the subsidy while not taxed now is taxable in future so you are not really getting 80% pay you are getting less as more tax will need to be paid on the subsidy element later.

It seems unfair that the employee will end up with an end of year tax bill.

Seve OB · 23-04-2020 12:44pm

Tow wrote: »

What people also need to be aware of is, from the 4th of May Revenue are going to rob Peter (ARNWP>586) to pay Paul (ARNWP>960). In other words the higher paid will now get a wage subsidy, at the cost of the people on middle income.

this is incorrect
there is no change at all to anyone in the 586-960 range. all they could get before the change was 350 and they will still get that after the change

Seve OB · 23-04-2020 12:47pm

collsoft wrote: »

Hi Will,

Unfortunately this is something that we all just have to live with.

The way the subsidy is calculated inevitably mixes up terms like "Gross", "Net" and "Salary" and it is easy to get confused.

What is really confusing is that an individuals subsidy entitlement is a mix of previous net pay as well as the current gross pay, so it will always be confusing.

this is just it. the revenue have started all this on a after tax pay, but they throw in gross amounts, which are irrelevant because everybody tax credits can mean different things. i wish they would just use gross amounts, because that would have been the fairest way of doing things, but they didn't so it is what it is..... .but it just makes it confusing for the lay person.

Seve OB · 23-04-2020 1:04pm

the new document is a little confusing as it mentions changes from 16th April and i think they also have something in there from 20th april, and then changes are from the 4th may. i can see a lot of people misreading this and thinking that they are ok to make changes from 16th april.
unless i'm mistaken all these changes can only be effected after 4th may. i'm going to assume for monthly, we will just use a full month calculation at new rate rather than apportion 4 days at old rate?

Seve OB · 23-04-2020 1:04pm

Here is one, maybe for Collsoft if you have seen it.

Monthly employee, fixed salary, earning about 71k so less then the revenue advertised 76k(irrelevant i know but could be used to make a point), and who's tax credits are pretty standard and their ANW is less than 960 when worked out over the course of the year. however they were paid jan and feb but the payroll used 4 weeks stamps in each month. because of this the payroll report is using a divisor of 8 to work out the ANW (instead of *12/52, which gives a true figure). ANW the payroll is reporting is slightly over the 960 and we are talking pennies in one instance.

i was hoping to see the revenue would issue some clarification regarding the monthly payroll as was advised would be available ahead of the april run, but nothing ever came. i do see they indicate the subsidy should be paid for april monthly payroll though as *52/12, so am hoping they see sense in allowing the same calculation for the ANW

Tow · 23-04-2020 2:21pm

Seve OB wrote: »

this is incorrect
there is no change at all to anyone in the 586-960 range. all they could get before the change was 350 and they will still get that after the change

From the 4th of May...

Seve OB · 23-04-2020 2:44pm

Tow wrote: »

From the 4th of May...

yes the changes are from the 4th may but as i pointed out, they are not reducing the subsidy for the middle earners as you say in order to top up the big earners.

gb19815 · 23-04-2020 2:49pm

Hi can someone help me, so I was getting covid payment only from employer . Last week he asked me to do some work from home I worked 26 hours . My payslip showed 350 covid payment and 150 top up. Employer has said I got paid 2 days at covid rate ie €70 per day and rest at my hourly rate . Yet 350 payment full cova payment on payslip. Too me it’s an absolute pisstake any advice welcome

blackwhite · 23-04-2020 2:57pm

Seve OB wrote: »

Here is one, maybe for Collsoft if you have seen it.

Monthly employee, fixed salary, earning about 71k so less then the revenue advertised 76k(irrelevant i know but could be used to make a point), and who's tax credits are pretty standard and their ANW is less than 960 when worked out over the course of the year. however they were paid jan and feb but the payroll used 4 weeks stamps in each month. because of this the payroll report is using a divisor of 8 to work out the ANW (instead of *12/52, which gives a true figure). ANW the payroll is reporting is slightly over the 960 and we are talking pennies in one instance.

i was hoping to see the revenue would issue some clarification regarding the monthly payroll as was advised would be available ahead of the april run, but nothing ever came. i do see they indicate the subsidy should be paid for april monthly payroll though as *52/12, so am hoping they see sense in allowing the same calculation for the ANW

We had the same issue. It's in the Revenue guidance that you use whatever PRSI weeks were submitted via ROS during Jan & Feb - subject to max of 9.

They've even stated that this calculation will result in some differences to actual weekly pay, but ARNWP must still be used.

Section 4.3
An employee’s Average Revenue Net Weekly Pay (ARNWP) is based on January and February payroll submissions made to Revenue by the employer by 15 March 2020.

Bonuses, commissions and other payments will be taken into account in the calculation if these were included as part of gross pay in the January and February 2020 payroll submissions.

To calculate the “Average Revenue Net Weekly Pay”, using the values in the payroll submission for each pay date in January and February 2020:
1. Take the employee’s “Gross pay” and from it subtract the “Income Tax Paid”, the “USC Paid” and the “Employee PRSI paid “. (See Appendix 1 for sample screens in ROS showing these values).
2. Total this figure for each pay date in Jan and Feb 2020 and divide this by the total number of insurable weeks reported.
• If the total number of insurable weeks reported exceeds 9 then use 9 as the divisor.
• If, for example, due to an exclusion order or an employee being PRSI exempt, there were no, or a negative number of, insurable weeks reported then use 9 as the divisor, regardless of the number of weeks actually paid or reported.
• The calculation will result in an Average Revenue Net Weekly Pay for the employee, however, there will be a small number of cases where calculation may not be fully representative of the employee’s usual weekly wage, the calculated Average Revenue Net Weekly Pay must be used in in these cases.

Seve OB · 23-04-2020 3:04pm

Seve OB wrote: »

the new document is a little confusing as it mentions changes from 16th April and i think they also have something in there from 20th april, and then changes are from the 4th may. i can see a lot of people misreading this and thinking that they are ok to make changes from 16th april.
unless i'm mistaken all these changes can only be effected after 4th may. i'm going to assume for monthly, we will just use a full month calculation at new rate rather than apportion 4 days at old rate?

ok so i've had some confirmation from the relevant sources. changes are effective immediately (from 16th april) for the higher earners. other changes are only from Star Wars May the 4th be with you.

Seve OB · 23-04-2020 3:06pm

blackwhite wrote: »

We had the same issue. It's in the Revenue guidance that you use whatever PRSI weeks were submitted via ROS during Jan & Feb - subject to max of 9.

They've even stated that this calculation will result in some differences to actual weekly pay, but ARNWP must still be used.

yes that was my reading on it, but I didn't spot the last line

however, it might be ok because as you see my post above just now, the changes for higher earners are effective from 16th april.

collsoft · 23-04-2020 4:01pm

Ok, Im going to stay away from things like 71K or 76K because they only make the whole thing more confusing.

So lets say that the Average Revenue Net Weekly Wage (ARNWP ) is €965 so you are just outside the eligibility under the old rules.

However, under the new rules for ARNWP over €960 they can qualify for a subsidy if they meet the following criteria;

1) Payment Date and Revenue Reporting Date is 16th April or later

2) Their new "Weekly Gross Pay" has fallen by 20% or more below their ARNWP

So, if your ARNWP is €965 you can earn up to €772 (Gross) and be eligible for a subsidy of €188. If you earn €773 you are ineligible

Note: Even though the new scheme only started on 16th April, if you are running a monthly payroll you are entitled to a full month's subsidy - this is not classed as backdating. If you run a weekly payroll you cannot go back before 16th - that is classed as backdating.

We have this morning launched our new free calculator over on our website www.collsoft.ie

To see these particular rules in action you need to select the "Pay Period" as being 4th May Onward - even though they apply in this case from 16th April - Hope that makes sense

One thing to watch, you can choose to run these calculationson a Monthly basis, but the ARNWP that you enter on screen must be the weekly figure - not the monthly.

Jason

P.S. if anybody spots any oddities in our calculator please let me know

Seve OB wrote: »

Here is one, maybe for Collsoft if you have seen it.

Monthly employee, fixed salary, earning about 71k so less then the revenue advertised 76k(irrelevant i know but could be used to make a point), and who's tax credits are pretty standard and their ANW is less than 960 when worked out over the course of the year. however they were paid jan and feb but the payroll used 4 weeks stamps in each month. because of this the payroll report is using a divisor of 8 to work out the ANW (instead of *12/52, which gives a true figure). ANW the payroll is reporting is slightly over the 960 and we are talking pennies in one instance.

i was hoping to see the revenue would issue some clarification regarding the monthly payroll as was advised would be available ahead of the april run, but nothing ever came. i do see they indicate the subsidy should be paid for april monthly payroll though as *52/12, so am hoping they see sense in allowing the same calculation for the ANW

Seve OB · 23-04-2020 4:35pm

collsoft wrote: »

Ok, Im going to stay away from things like 71K or 76K because they only make the whole thing more confusing.

So lets say that the Average Revenue Net Weekly Wage (ARNWP ) is €965 so you are just outside the eligibility under the old rules.

However, under the new rules for ARNWP over €960 they can qualify for a subsidy if they meet the following criteria;

1) Payment Date and Revenue Reporting Date is 16th April or later

2) Their new "Weekly Gross Pay" has fallen by 20% or more below their ARNWP

So, if your ARNWP is €965 you can earn up to €772 (Gross) and be eligible for a subsidy of €188. If you earn €773 you are ineligible

Note: Even though the new scheme only started on 16th April, if you are running a monthly payroll you are entitled to a full month's subsidy - this is not classed as backdating. If you run a weekly payroll you cannot go back before 16th - that is classed as backdating.

We have this morning launched our new free calculator over on our website www.collsoft.ie

To see these particular rules in action you need to select the "Pay Period" as being 4th May Onward - even though they apply in this case from 16th April - Hope that makes sense

One thing to watch, you can choose to run these calculationson a Monthly basis, but the ARNWP that you enter on screen must be the weekly figure - not the monthly.

Jason

P.S. if anybody spots any oddities in our calculator please let me know

yea, thats kinda what i was thinking, cheers

Claonadh1 · 23-04-2020 4:48pm

If an employer is making additional top up payments such that the subsidy entitlement back from Revenue is reduced (similar to page 19 of the Version 7 of the Revenue guidance), what subsidy figure should be included on the employee payslip?

Should you include the reduced subsidy i.e. reduce the subsidy by the excess payment?

Or include the €410/€350 and leave it to Revenue to do the reconciliation afterwards?

Thanks.

collsoft · 23-04-2020 5:13pm

You should only pay the employee the actual subsidy that you have calculated - not the full €410 or €350

Whatever payment you make the employee is what goes on the Payslip.

There are going to be cases where mistakes are made.

So lets say an employee was entitled to a subsidy of €200, but actually paid them €250 - so they got €50 extra. Revenue will tax them on the whole amount at the end of the year.

However, Revenue are going to claw that €50 back from the employer.

So they are paying the employer now €410 per week, and when they reconcile they will collect €210 back from you and leave you with the €200.

But since you paid the employee €250, you are stuck for the €50 cost yourself.

Hope that makes sense

Jason

Claonadh1 wrote: »

If an employer is making additional top up payments such that the subsidy entitlement back from Revenue is reduced (similar to page 19 of the Version 7 of the Revenue guidance), what subsidy figure should be included on the employee payslip?

Should you include the reduced subsidy i.e. reduce the subsidy by the excess payment?

Or include the €410/€350 and leave it to Revenue to do the reconciliation afterwards?

Thanks.

Lazman · 23-04-2020 5:36pm

For Collsoft, if you can . The V.7.0 guideline say the subsidy is available where ARNWP was greater than €960 but Gross pay is now less than €960, with subsidy depending on the % of the reduction from ARWNP to the new gross.

Also, the maximum additional payment an employer can make is the difference between ARNWP and and max weekly wage subsidy. So if for e.g. ARNWP was €1300 and new Gross (Employers additional payment) is now €700, can this €700 be paid without claw back ?

Thanks

collsoft · 23-04-2020 6:34pm

First Question - That is correct.

Second Question

There will be tapering when Subsidy + Payment > 960 - Tapering begins at €960 in this case not at ARNWP.

So, using your Figures.

The maximum subsidy available before tapering is €350 because pay has dropped by 46% (comparing 700 to 1300)

However, 700 + 350 = 1050

1050 > 960 by €90, therefore there is tapering of €90

So in this case the subsidy available is €260, and the employer pay is €700

Lazman wrote: »

For Collsoft, if you can . The V.7.0 guideline say the subsidy is available where ARNWP was greater than €960 but Gross pay is now less than €960, with subsidy depending on the % of the reduction from ARWNP to the new gross.

Also, the maximum additional payment an employer can make is the difference between ARNWP and and max weekly wage subsidy. So if for e.g. ARNWP was €1300 and new Gross (Employers additional payment) is now €700, can this €700 be paid without claw back ?

Thanks

ilovespudss · 23-04-2020 7:00pm

Two quick questions on Revenue's Subsidy Refunds.

We're still in the transitional phase of the scheme so I was under the impression that subsidy refund would be given in straight amounts of €350/€410, depending on what the employee qualified for. This would then be recouped at a later date.

What's confusing me is that the subsidies received from revenue have been an odd figure, not a round figure as I was expecting (multiples of 350/410). Anyone any insight to why this is happening?

Also, In people experiences here, are companies proactively sending the balance of the subsidy back to revenue on a weekly basis or sitting on it and letting Revenue reconcile the figure in the future?

Heres Johnny · 23-04-2020 7:05pm

gb19815 wrote: »

Hi can someone help me, so I was getting covid payment only from employer . Last week he asked me to do some work from home I worked 26 hours . My payslip showed 350 covid payment and 150 top up. Employer has said I got paid 2 days at covid rate ie €70 per day and rest at my hourly rate . Yet 350 payment full cova payment on payslip. Too me it’s an absolute pisstake any advice welcome

The way I'd look at that is that you got 500 for 26 hours work. Is this a good rate for your job? If so, why do you care where it came from? Not meaning to be rude but I'm getting a lot of stick from employees saying things like they only got paid 150 quid for 26 hours work whereas they didn't, they got paid 500. It didn't cost the company 500 but what they fail to see is that a company that normally has 500,000-600,000 euro in monthly turnover is, as at today, sitting at 100k for April. And it was 330k in March.

Heres Johnny · 23-04-2020 7:09pm

ilovespudss wrote: »

Two quick questions on Revenue's Subsidy Refunds.

We're still in the transitional phase of the scheme so I was under the impression that subsidy refund would be given in straight amounts of €350/€410, depending on what the employee qualified for. This would then be recouped at a later date.

What's confusing me is that the subsidies received from revenue have been an odd figure, not a round figure as I was expecting (multiples of 350/410). Anyone any insight to why this is happening?

Also, In people experiences here, are companies proactively sending the balance of the subsidy back to revenue on a weekly basis or sitting on it and letting Revenue reconcile the figure in the future?

There are tax refunds for each person which will be different and that will stop the subsidy being a multiple of 410.
Incorrectly, in first week I stopped tax refunds and the subsidy was an exact multiple of 410 but it's not any more.

Secondly, we are sitting on the overpayment at the moment, it's been about 3k a week overpayment so far. I'm just expecting revenue to start clawing this back themselves. I have posted it to a separate GL code as to what I think the overpayment has been, hope I am right!!

Siobh73 · 23-04-2020 7:14pm

Anyone have any experience in Revenue allowing an employer go back and rectify errors made in payroll for the first weeks of this scheme? My employer underpaid my gross wage by including three tax rebate in the amount. They have told me Revenue is discouraging changes but it has resulted in a 35% drop in my gross pay outside of the Covid payment

ilovespudss · 23-04-2020 7:16pm

Heres Johnny wrote: »

There are tax refunds for each person which will be different and that will stop the subsidy being a multiple of 410.
Incorrectly, in first week I stopped tax refunds and the subsidy was an exact multiple of 410 but it's not any more.

Secondly, we are sitting on the overpayment at the moment, it's been about 3k a week overpayment so far. I'm just expecting revenue to start clawing this back themselves. I have posted it to a separate GL code as to what I think the overpayment has been, hope I am right!!

OK, yeah, that makes sense.

Cheers

doc22 · 23-04-2020 7:24pm

ilovespudss wrote: »

Two quick questions on Revenue's Subsidy Refunds.

We're still in the transitional phase of the scheme so I was under the impression that subsidy refund would be given in straight amounts of €350/€410, depending on what the employee qualified for. This would then be recouped at a later date.

What's confusing me is that the subsidies received from revenue have been an odd figure, not a round figure as I was expecting (multiples of 350/410). Anyone any insight to why this is happening?

Also, In people experiences here, are companies proactively sending the balance of the subsidy back to revenue on a weekly basis or sitting on it and letting Revenue reconcile the figure in the future?

Two things monthly returns(410x52/12) 1776ish and tax refunds for the employees

Lazman · 23-04-2020 8:09pm

collsoft wrote: »

First Question - That is correct.

Second Question

There will be tapering when Subsidy + Payment > 960 - Tapering begins at €960 in this case not at ARNWP.

So, using your Figures.

The maximum subsidy available before tapering is €350 because pay has dropped by 46% (comparing 700 to 1300)

However, 700 + 350 = 1050

1050 > 960 by €90, therefore there is tapering of €90

So in this case the subsidy available is €260, and the employer pay is €700

Many thanks Collsoft, thought that might be the case, but I couldn't see anywhere in the Guidance on this cateogory where it says that top up + subsidy are tapered after €960, only that the subsidy is payable where gross pay is reduced by > 20% of the ARNWP.

Then it says on Page 5 that tiered arrangements and tapering are to ensure that net pay does not exceed €960. I am beginning to feel stupid !

Wage Subsidy Scheme Issues

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