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Wage Subsidy Scheme Issues

Sono Topolino

I work in tax so my sister asked me to help her apply for the Wage Subsidy Scheme for her business. While reading through the terms and conditions, I smelled a rat and asked advice from a solicitor who told me in no uncertain terms that my sister was opening herself up to legal jeopardy.

Solicitor friend said that by self-declaring that her LTD was experiencing an "inability to claim emoluments", she was admitting to trading while insolvent, and becomes personally liable for the company's debts (basically gives up LTD status). Now the Government has said that this is not the case, and Niall Cody was on Morning Ireland yesterday also saying the same thing. So there's that.

But still I have serious concerns: if you apply for this scheme in good faith, and in 6 months time you find that your business is in fact unable to continue trading, you go into receivership, can your creditors come after your debts? Can they seek a court declaration to this effect? It's a concern. The business will have been published on the Revenue list so this will be publicly available information. Wouldn't a judge be the one interpreting the points of law, not the Revenue for the Minister for Finance?

My sister wants to apply for this scheme as a way to keep her staff paid and her business ticking over, but we're both worried. To be clear: I'm not looking for legal advice, to see how other businesses are approaching this.

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[Deleted User]

Reviewing our TWSS statement on ROS currently.

For the last two months we are in receipt of the correct amount for most employees - the flat rate €350 subsidy. For one employee, the subsidy paid is less than I think it should be.

According to Revenue:
"Where the ARNWP does not exceed €412, a subsidy of 85% of ARNWP, to a maximum of €350, is applicable (4.17(1))"
"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."

This employee has an ARNWP of less than €412, we are paying them the 85% subsidy, which when added to the employer top up is less than €350 and not greater than their ARNWP. However, at the moment we are only receiving a subsidy of 70%. If this is just a delay in the system updating, and it'll be sorted out later, grand - but, can anyone confirm if I'm reading this correctly? I don't want to be implementing the system incorrectly and lose out on subsidy as a result.

Denisekav88

Hi just wondering can twss be used to cover holiday pay? I’m back to work part time working 3 days instead of 5 with no top up from my employer and even though I worked 2/3 days and put in for 8hrs hols my employer said because the scheme covers me for 3 days she didn’t have to pay me holiday pay. Just looking for clarification on this

doc22

Denisekav88 wrote: »

Hi just wondering can twss be used to cover holiday pay? I’m back to work part time working 3 days instead of 5 with no top up from my employer and even though I worked 2/3 days and put in for 8hrs hols my employer said because the scheme covers me for 3 days she didn’t have to pay me holiday pay. Just looking for clarification on this

she could pay holiday pay for 3 days from TWSS. While working on TWSS your still building your holiday entitlement

doc22

silent_spark wrote: »

Reviewing our TWSS statement on ROS currently.

For the last two months we are in receipt of the correct amount for most employees - the flat rate €350 subsidy. For one employee, the subsidy paid is less than I think it should be.

According to Revenue:
"Where the ARNWP does not exceed €412, a subsidy of 85% of ARNWP, to a maximum of €350, is applicable (4.17(1))"
"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."

This employee has an ARNWP of less than €412, we are paying them the 85% subsidy, which when added to the employer top up is less than €350 and not greater than their ARNWP. However, at the moment we are only receiving a subsidy of 70%. If this is just a delay in the system updating, and it'll be sorted out later, grand - but, can anyone confirm if I'm reading this correctly? I don't want to be implementing the system incorrectly and lose out on subsidy as a result.

Do they have another job/income that could be messing your calculations.What does the CSV file say?

[Deleted User]

doc22 wrote: »

Do they have another job/income that could be messing your calculations.What does the CSV file say?

The CSV is using the 70% figure, but it contradicts with Revenue's current guidance. Would their other income impact the subsidy we can claim as an employer?

collsoft

Basically if you are in the scheme the the employee will pay PRSI at the normal rates of A0/AX/AL/A1

However, under the scheme the employer pays at a rate of 0.5% (similar to the J9 rate in TWSS)

However, for PRSI Classes A0/Ax/AL/A1 the rates are 8.8% or 11.05% so it would be hard to make that work without a lot of changes to the payroll software.

But, Revenue and Social Welfare are looking at a solution that may be able to make this work and hopefully we will have some clarity early next week.

The other problem is that eligibility for the scheme is based on "Gross Pay" where as PRSI is calculated on "Pay For Employers PRSI".

Ninety percent of the time this is not a problem, but if there are any items like a Bike To Work or a Travel tax Saver ticket then these figures are not the same.

So, if your Gross Pay is €1000 and you have a "Bike To Work" of €100 then you only Pay PRSI on €900.

Thats the type of thing I was talking about

shatners bassoon wrote: »

Hi Collsoft, thanks for your contributions to this thread.

Can you explain why/how this is going to be difficult to implement?

Thanks

doc22

silent_spark wrote: »

The CSV is using the 70% figure, but it contradicts with Revenue's current guidance. Would their other income impact the subsidy we can claim as an employer?

Yes and it could take them over the 412 ARNWP for Jan and Feb and to the 70% rule

doc22

collsoft wrote: »

Basically if you are in the scheme the the employee will pay PRSI at the normal rates of A0/AX/AL/A1

However, under the scheme the employer pays at a rate of 0.5% (similar to the J9 rate in TWSS)

However, for PRSI Classes A0/Ax/AL/A1 the rates are 8.8% or 11.05% so it would be hard to make that work without a lot of changes to the payroll software.

But, Revenue and Social Welfare are looking at a solution that may be able to make this work and hopefully we will have some clarity early next week.

The other problem is that eligibility for the scheme is based on "Gross Pay" where as PRSI is calculated on "Pay For Employers PRSI".

Ninety percent of the time this is not a problem, but if there are any items like a Bike To Work or a Travel tax Saver ticket then these figures are not the same.

So, if your Gross Pay is €1000 and you have a "Bike To Work" of €100 then you only Pay PRSI on €900.

Thats the type of thing I was talking about

Is going to be all or nothing with employer(all staff registered for scheme) or is each submission going to have a new unique identifier (similar to J9)

[Deleted User]

doc22 wrote: »

Is going to be all or nothing with employer(all staff registered for scheme) or is each submission going to have a new unique identifier (similar to J9)

It will have an identifier on each employee, as proprietary directors and employees connected to them do not qualify, unless they were already employed by the company pre July. This also allows large employers with multiple divisions have some divisions (who qualify) on EWSS while divisions are not.

Anyway, it looks like our government has gone off on holidays for the next 6 weeks, without voting EWSS into law.

Kewreeuss

There is no way you can exceed the average net pay for an employee, except by not claiming the subsidy? Right?
you increase the top up, the subsidy decreases , but the net pay stays the same until the subsidy is zero and then the net pay begins to increase, the more you top up?
I was told you can increase the net pay but I dont see how you can unless expenses or something non taxable is included on the payslip.

PickYourName

doc22 wrote: »

she could pay holiday pay for 3 days from TWSS. While working on TWSS your still building your holiday entitlement

That's not entirely true. Your holiday entitlement is the same as it always was; it depends on whether you're working or not whether you are building up days, not on whether or not you're on the TWSS.

Don't forget some people are on TWSS and are working and some people are on TWSS and are not working.

There's a good summary of the rules here:

https://www.citizensinformation.ie/en/employment/employment_rights_and_conditions/leave_and_holidays/annual_leave_public_holidays.html

PickYourName

Kewreeuss wrote: »

There is no way you can exceed the average net pay for an employee, except by not claiming the subsidy? Right?
you increase the top up, the subsidy decreases , but the net pay stays the same until the subsidy is zero and then the net pay begins to increase, the more you top up?
I was told you can increase the net pay but I dont see how you can unless expenses or something non taxable is included on the payslip.

The answer to your questions is "yes".

What you were told was correct: you can increase net pay (indirectly: employers can only increase gross pay) to whatever you want. The TWSS may or may not pay a portion of it, depending on the rules of the scheme.

larchielads

Whats the diff between TWSS and the PUP?

PickYourName

shatners bassoon wrote: »

I don't think that's fair at all.

TWSS leaves employers in a lot of cases unable pay staff in full without losing the whole of the subsidy, which is I assume what will happen here if the employer 'just pays the extra'.

The structure of the new scheme makes far more sense to me, although the proof will be in the pudding...

The new scheme makes a lot more sense where people are actually working, especially if they're working full time where the current scheme is pretty much useless.

Don't forget, the TWSS was brought in when businesses were being shut down by government policy and they couldn't work. It's not really fit for purpose where people are returning to work, especially if returning full time. Presumably, that's the reason it's being changed.

What I think is unfair is where some employers are abusing the scheme (and their employees) by using it to cut wages without agreement and/or pay less than the minimum wage.

PickYourName

larchielads wrote: »

Whats the diff between TWSS and the PUP?

PUP is a payment from the state (Dept of Social Protection) to an individual to is not working due to the impact of the COVID-19 pandemic. "Not working" means they have been laid off, either temporarily or permanently. You cannot receive the PUP if you return to work.

The TWSS is a payment from the state (actually Revenue) to an employer whose business has been impacted negativelty by the COVID-19 pandemic. It's paid for each qualifying employee, based on certain rules. The payment MUST be passed on to the employee by the employer. The employee may be temporarily laid off, and hence not working, or they may be working. The employer may add to the payment to top-up wages. However, the TWSS payment is tapered, which means that employers can only pay a certain amount at which point the TWSS subsidy reduces or stops completely for that employee. It turns out that if you return to full-time work at the same pay rate, no TWSS subsidy will be paid.

larchielads

So if im gettin twss can i go on me holidays and not be harrassed at the airport if i decided to head off?

PickYourName

larchielads wrote: »

So if im gettin twss can i go on me holidays and not be harrassed at the airport if i decided to head off?

Absolutely!

Your terms and conditions remain as they were, including those relating to holidays.

There is no requirement for employees to be in the state for the payment to be made to the employer.

The Revenue FAQ includes the following question and answer:

"Is an employee who resides overseas, or in Northern Ireland, eligible?
Employers can claim the subsidy in respect employees where the employee is exercising an Irish contract of
employment in the State, and where the employer satisfies the conditions of the scheme."

It doesn't mention holidays but the answer explicitly states that the condition is where it's an Irish contract of employment (i.e. regardless of the physical location of the employee).

PickYourName

larchielads wrote: »

So if im gettin twss can i go on me holidays and not be harrassed at the airport if i decided to head off?

By the way, if you're stopped by Dept of Social Protection people at the airport, you can tell them to f*** off: you are not in receipt of a social welfare payment if you are on the TWSS scheme, and they've no right to be questioning you.

larchielads

Thanks for the info much appreciated

Kewreeuss

PickYourName wrote: »

The answer to your questions is "yes".

What you were told was correct: you can increase net pay (indirectly: employers can only increase gross pay) to whatever you want. The TWSS may or may not pay a portion of it, depending on the rules of the scheme.

How can it be done?

shatners bassoon

PickYourName wrote: »

The new scheme makes a lot more sense where people are actually working, especially if they're working full time where the current scheme is pretty much useless.

Don't forget, the TWSS was brought in when businesses were being shut down by government policy and they couldn't work. It's not really fit for purpose where people are returning to work, especially if returning full time. Presumably, that's the reason it's being changed.

What I think is unfair is where some employers are abusing the scheme (and their employees) by using it to cut wages without agreement and/or pay less than the minimum wage.

I don't disagree with any of the above but you were replying to an employer who certainly doesn't sound like he/she is taking advantage of employees. They made a perfectly valid point about the shortcomings of the scheme.

PickYourName

shatners bassoon wrote: »

I don't disagree with any of the above but you were replying to an employer who certainly doesn't sound like he/she is taking advantage of employees. They made a perfectly valid point about the shortcomings of the scheme.

Just to be clear: I think there are shortcomings too, especially now people are returning to work. In fact, I stated it explictely: it's not fit for that purpose.

Also, I certainly didn't mean to imply that you were one of those attemptimg to abuse the scheme.

I was just pointing out that in my opinion the far greater unfairness was those who are abusing it.

shatners bassoon

I think we're at cross purposes here. I'm not suggesting that you're implying that I'm abusing the scheme.

You accused a previous poster of trying to 'have their cake and eat it' when they pointed out the very shortcomings you're now acknowledging, which was completely unfair imo.

PickYourName

shatners bassoon wrote: »

I think we're at cross purposes here. I'm not suggesting that you're implying that I'm abusing the scheme.

You accused a previous poster of trying to 'have their cake and eat it' when they pointed out the very shortcomings you're now acknowledging, which was completely unfair imo.

Fair enough, the comment was a bit harsh, and I possibly misread the intention of the person posing the question.

I took their meaning to be "How can I get round the rules of the scheme to avoid paying staff their public holiday entitlements?".

I accept that this could equally be viewed as "The rules of the TWSS scheme mean it doesn't seem to cover public holidays in this particular case, is that correct?", which is something entirely different.

Apologies to the person concerned if that is the case, but it was a genuine misreading of their intent.

PickYourName

Kewreeuss wrote: »

How can it be done?

How can what be done?

STEPHEN1985

Does anyone know if the covid payment will be late next week due to the bank holiday?

PickYourName

STEPHEN1985 wrote: »

Does anyone know if the covid payment will be late next week due to the bank holiday?

If my memory serves (quite possibly not!), the payment for the week of the June holiday was delayed by a day (i.e. Wednesday rather than Tuesday). That's the payment from Revenue to the employer, though. Payment from employer to employee is a matter for the employer, so I'd assume whatever used to be the case for that would stand.

collsoft

No, the employer is going to have to identify the employees for which he is making a claim.

There might be some large employers where the are many divisions, some of which might be in EWSS and others which may not, but they all report under the same Registration number.

So the payroll software developers are talking with Revenue at the moment to see how such employees can be identified.

The solution is likey to be something like a tick box on your employee file or wage entry which then outputs a flag onto the Payroll Submission for each employee being claimed for.

Revenue would then pick this up and warehouse the relevant payslips for EWSS processing at the end of the month.

One big advantage of this is that because Revenue are going to process this a month in arrears (after the 15th of the following month when the employer has accepted his statement) it will allow for employers to make corrections to payslips in the scheme.

With TWSS Revenue made the payment the next working day and this caused many problems for people who needed to make corrections

doc22 wrote: »

Is going to be all or nothing with employer(all staff registered for scheme) or is each submission going to have a new unique identifier (similar to J9)

STEPHEN1985

PickYourName wrote: »

If my memory serves (quite possibly not!), the payment for the week of the June holiday was delayed by a day (i.e. Wednesday rather than Tuesday). That's the payment from Revenue to the employer, though. Payment from employer to employee is a matter for the employer, so I'd assume whatever used to be the case for that would stand.

Thank you, I am recently on the 350 p/w from the state so wasn't sure if it would be Tuesday or Wednesday

Millionaire only not

Does anyone know will there be a double week for Xmas !
Is that not discrimination to the working people if they don’t give it !
Omg if only sf were in power and violet Anne to replace paschal we could be sure of getting it . What is this country coming to!