Wage Subsidy Scheme Issues

fairylove · 09-04-2020 6:53pm

Hey all, I have a query about the wage subsidy scheme if anyone could throw some light on it - my company laid everyone off on 16th March. Now they are planning to bring back senior staff on wage subsidy scheme, this includes me. The employer will top up 10% of my pay, rather than the 30%. I'm delighted to be able to avail of this and be back to work (from home!). However, some information received today isn't sitting right with me. Some of my colleagues will receive their full pay (30% top up). We are all doing the same hours & will be on the same part-time hours for the duration of the subsidy payment. My query is - Would anyone know why my employer would pay some employees a higher percentage of the subsidy than others? It doesn't seem fair. I do earn a bit more than some colleagues but we are all within the €38k limit for the subsidy scheme, so I don't think that's why. I can't think of anything other than it's an arbitrary decision they have made for some reason. I will speak to them about it but just wanted to see if there's anything I'm missing, as I'm feeling annoyed/confused by this

CaptainCoPilot · 09-04-2020 6:56pm

I work for a pretty big company who have been adversely affected by Covid-19.

Originally they advised us that everybody was being put on a 50% working week which would result in a 50% reduction in pay. Therefore we could claim social welfare for the other 2.5 days.

The government then announced this scheme and the company informed us they were signing up to it.

However, the 50% time was remaining the same, so the covid subsidy was being used to pay the 50% payment to us only. As we cant claim both the covid and unemployment benefit, the company is "topping up" our 50% payment with the amount we would be able to claim from social welfare.

I think this is all wrong.

Firstly I think the company is being greedy by keeping us on 50% time while the government is paying 70% of our salary. By my calculation, for the vast majority, the government is now paying the entirety of our wage.

Secondly, as there is a tax liability on the covid payment we are actually worse off as we should be keeping some money aside to pay the tax at a later date.

Can anybody shed some light? Am I right to he concerned? The company have already made mistakes in applying this and many employees are concerned.

LJ_20 · 09-04-2020 7:47pm

Hi, I am due to return to work from maternity leave this month and my employer has told me they cannot put me on the wage subsidy scheme even though all other staff are on it and will be receiving 100% of their wage.

Their reasoning is that I have not been on the payroll in January or February and I should apply for PUP which is 350 a week.

I have come across a document from Revenue which you can find by searching "Guidance on operation of Temporary COVID Wage Subsidy scheme FAQ v5"

Section 4.6 looks like it makes an exception for people who were not on the payroll in January or February if they were on maternity leave but my employer claims this is not correct and has said Revenue confirmed to them that I should not be included on the scheme.

I do not see how it can be OK for my maternity leave to affect my wage like this while my colleagues continue to receive full pay. I am also very worried about how this will affect things such as mortgage approval. Any advice on what I can do here would be greatly appreciated.

gb19815 · 09-04-2020 7:48pm

collsoft wrote: »

It should be ok - but it depends on your figures.

Each employee has a unique subsidy and allowable top-up that depends on the average net pay in Jan/Feb.

Assuming that the 1 day of holidays is less than the maximum employer top-up then you should be ok.

We have a calculator on our website www.collsoft.ie that will tell you the amount of subsidy available and the maximum amount by which you can top up.

Just enter your Average Net Pay into the calculator.

If you are not sure about your average net pay, then get you last payslip in February and take the cumulative figures for Gross Pay - PAYE - USC - PRSI and then divide by the number of Insurable weeks - it should be close enough

Hi thanks again , my employer not topping up and leaving a fair difference to normal pay . One last question what happens ie with bank holiday in relation to pay ?

CrabRevolution · 09-04-2020 7:52pm

noodler wrote: »

Pretty sure it says the employer does.not have to deduct.

Not that they cannot.

The guidance states:

Revenue will be checking the eligibility of employer and employees for this scheme. Checks include:
• the employer has paid the full subsidy amount to the employee

And

Income tax, USC, LPT, if applicable, and PRSI are not deducted from the Temporary Wage Subsidy.

You can't pay the employee less than what revenue give you to pay them.

Seve OB · 09-04-2020 8:52pm

LJ_20 wrote: »

Hi, I am due to return to work from maternity leave this month and my employer has told me they cannot put me on the wage subsidy scheme even though all other staff are on it and will be receiving 100% of their wage.

Their reasoning is that I have not been on the payroll in January or February and I should apply for PUP which is 350 a week.

I have come across a document from Revenue which you can find by searching "Guidance on operation of Temporary COVID Wage Subsidy scheme FAQ v5"

Section 4.6 looks like it makes an exception for people who were not on the payroll in January or February if they were on maternity leave but my employer claims this is not correct and has said Revenue confirmed to them that I should not be included on the scheme.

I do not see how it can be OK for my maternity leave to affect my wage like this while my colleagues continue to receive full pay. I am also very worried about how this will affect things such as mortgage approval. Any advice on what I can do here would be greatly appreciated.

IMO it is quite clear, they can include you.
I would ring the revenue yourself and seek their advice, explain the situation to them.

highgiant1985 · 09-04-2020 8:55pm

LJ_20 wrote: »

Hi, I am due to return to work from maternity leave this month and my employer has told me they cannot put me on the wage subsidy scheme even though all other staff are on it and will be receiving 100% of their wage.

Their reasoning is that I have not been on the payroll in January or February and I should apply for PUP which is 350 a week.

I have come across a document from Revenue which you can find by searching "Guidance on operation of Temporary COVID Wage Subsidy scheme FAQ v5"

Section 4.6 looks like it makes an exception for people who were not on the payroll in January or February if they were on maternity leave but my employer claims this is not correct and has said Revenue confirmed to them that I should not be included on the scheme.

I do not see how it can be OK for my maternity leave to affect my wage like this while my colleagues continue to receive full pay. I am also very worried about how this will affect things such as mortgage approval. Any advice on what I can do here would be greatly appreciated.

Reads like you were on unpaid maternity leave? If so your employer is correct. If you were not in a payroll submission with a Feb payment date that was transfer to Revenue before 15th March then the revenue scheme rules are the employee can not be processed under this scheme.

LJ_20 · 09-04-2020 9:08pm

highgiant1985 wrote: »

Reads like you were on unpaid maternity leave? If so your employer is correct. If you were not in a payroll submission with a Feb payment date that was transfer to Revenue before 15th March then the revenue scheme rules are the employee can not be processed under this scheme.

Correct, it was unpaid maternity leave. However, the document I referenced says the below;

"4.6 What if an employee was not on Payroll in January or February 2020?

There can be cases where an employee was in employment but who did not receive normal pay in January or
February 2020, such as reduced pay, maternity leave or off-pay leave. In such cases the employer can either:
• operate the scheme based on Average Net Weekly Pay,
• pay the employee the appropriate wages without receiving a subsidy refund, or
• the employee may decide not to participate in the Temporary Wage Subsidy Scheme and instead apply
directly to the Department of Employment Affairs and Social Protection for the Pandemic Unemployment
Payment."

I would have thought this section covers me as it's for employees that were not on payroll in January or February. I am really surprised that maternity leave may not be protected here.

Happy4all · 09-04-2020 9:12pm

over how long a period does an employer's have to be down 25% ?

Seve OB · 09-04-2020 9:16pm

LJ_20 wrote: »

Correct, it was unpaid maternity leave. However, the document I referenced says the below;

"4.6 What if an employee was not on Payroll in January or February 2020?

There can be cases where an employee was in employment but who did not receive normal pay in January or
February 2020, such as reduced pay, maternity leave or off-pay leave. In such cases the employer can either:
• operate the scheme based on Average Net Weekly Pay,
• pay the employee the appropriate wages without receiving a subsidy refund, or
• the employee may decide not to participate in the Temporary Wage Subsidy Scheme and instead apply
directly to the Department of Employment Affairs and Social Protection for the Pandemic Unemployment
Payment."

I would have thought this section covers me as it's for employees that were not on payroll in January or February. I am really surprised that maternity leave may not be protected here.

Yes that’s the correct section. Previous poster highgiant is incorrect. Show this document to your employer. As I say, call revenue and explain to them the situation and they can guide you.

blackwhite · 09-04-2020 9:29pm

noodler wrote: »

Pretty sure it says the employer does.not have to deduct.

Not that they cannot.

See section 1.7

Not only does the guidance state you must pay over the subsidy in full, the legislation also states this

Under section 28(5)(d) of the [Covid-19] Act, the employer must pay to the employee “an additional amount equivalent to the wage subsidy”, which means the subsidy amount must be paid to the employee in full.

The_Chap · 09-04-2020 9:33pm

Happy4all wrote: »

over how long a period does an employer's have to be down 25% ?

The declaration by the employer is not a declaration of insolvency. The declaration is simply a declaration which states that, based on reasonable projections, there will be, as a result of disruption to the business caused or to be caused by the Covid-19 pandemic, a decline of at least 25% in the future turnover of, or customer orders for, the business for the duration of the pandemic and that as a result the employer cannot pay normal wages and outgoings fully but nonetheless wants to retain its employees on the payroll

highgiant1985 · 09-04-2020 10:41pm

LJ_20 wrote: »

Correct, it was unpaid maternity leave. However, the document I referenced says the below;

"4.6 What if an employee was not on Payroll in January or February 2020?
There can be cases where an employee was in employment but who did not receive normal pay in January or
February 2020, such as reduced pay, maternity leave or off-pay leave. In such cases the employer can either:
• operate the scheme based on Average Net Weekly Pay,
• pay the employee the appropriate wages without receiving a subsidy refund, or
• the employee may decide not to participate in the Temporary Wage Subsidy Scheme and instead apply
directly to the Department of Employment Affairs and Social Protection for the Pandemic Unemployment
Payment."

I would have thought this section covers me as it's for employees that were not on payroll in January or February. I am really surprised that maternity leave may not be protected here.

if you read what you posted it says

• operate the scheme based on Average Net Weekly Pay, -- you have no pay in Jan/Feb so your average net weekly pay is 0. So with this choice you get 0.

"• pay the employee the appropriate wages without receiving a subsidy refund,"
-- I.e. No refund for the employer. If the employer can pay you still their decision but given no refund for them there's 0 incentive for them to do so.

• the employee may decide not to participate in the Temporary Wage Subsidy Scheme and instead apply directly to the Department - this is in reality the most likely option unless ER has reserves to keep you on otherwise.

highgiant1985 · 09-04-2020 10:42pm

Seve OB wrote: »

Yes that’s the correct section. Previous poster highgiant is incorrect. Show this document to your employer. As I say, call revenue and explain to them the situation and they can guide you.

If the ER is struggling they will not process the employee through the scheme as there's no benefit to the ER in doing so as they'll get nothing back from Revenue.

Seve OB · 09-04-2020 10:47pm

highgiant1985 wrote: »

If the ER is struggling they will not process the employee through the scheme as there's no benefit to the ER in doing so as they'll get nothing back from Revenue.

The benefit is that the employee stays on the books as an employee as opposed to going on the live register.

highgiant1985 · 09-04-2020 10:48pm

Seve OB wrote: »

The benefit is that the employee stays on the books as an employee as opposed to going on the live register.

Fair enough accepted re the employee benefit but from an employer perspective if they don't have the money that's useless to them and they'll say i just don't have the money to pay you.

Seve OB · 10-04-2020 12:51am

highgiant1985 wrote: »

Fair enough accepted re the employee benefit but from an employer perspective if they don't have the money that's useless to them and they'll say i just don't have the money to pay you.

it doesn't have to cost the employer a shilling

blackwhite · 10-04-2020 1:09am

Seve OB wrote: »

it doesn't have to cost the employer a shilling

It’ll cost them approx €1.75 per employee minimum - 0.5% employers PRSI 😂

gb19815 · 10-04-2020 9:07am

Guys what happens with bank holiday this Monday ? Are we entitled to be paid for it if getting subsidy payment ?

Tow · 10-04-2020 10:46am

gb19815 wrote: »

Guys what happens with bank holiday this Monday ? Are we entitled to be paid for it if getting subsidy payment ?

It is a flat amount if money, based on your pay frequency. Holidays and Bank Holidays do not come into it.

eh i dunno · 10-04-2020 10:54am

For anyone waiting on their first 70% covid payment you can look forward to a nice tax refund from the revenue on your first payment. Pleasant surprise when I got paid today.

kennethsmyth · 10-04-2020 11:05am

eh i dunno wrote: »

For anyone waiting on their first 70% covid payment you can look forward to a nice tax refund from the revenue on your first payment. Pleasant surprise when I got paid today.

Thats a double edged sword. You will have less tax allowances once you are back at work and hence less net pay in future during this tax year or less allowances over next year.

Advice is to ask your employer to put you on a week one basis so you only receive tax credits for each individual week.

eh i dunno · 10-04-2020 11:11am

kennethsmyth wrote: »

Thats a double edged sword. You will have less tax allowances once you are back at work and hence less net pay in future during this tax year or less allowances over next year.

Advice is to ask your employer to put you on a week one basis so you only receive tax credits for each individual week.

Cheers but I won't be spending it anyway. The next payslip will be the frightening one.

han2000 · 10-04-2020 11:21am

kennethsmyth wrote: »

Thats a double edged sword. You will have less tax allowances once you are back at work and hence less net pay in future during this tax year or less allowances over next year.

Advice is to ask your employer to put you on a week one basis so you only receive tax credits for each individual week.

Even if you switch to week one basis, you will still owe tax after the year end. The subsidy is not treated as taxable until then.

I just did a quick pay summary for myself for the year, if I switch to week one basis I will still owe €260 tax at the year end, if I stay on cumulative basis I will have an extra €538 in my take home pay in 2020 but will owe this plus the €260 above back to Revenue after the year end.

kennethsmyth · 10-04-2020 11:49am

han2000 wrote: »

Even if you switch to week one basis, you will still owe tax after the year end. The subsidy is not treated as taxable until then.

I just did a quick pay summary for myself for the year, if I switch to week one basis I will still owe €260 tax at the year end, if I stay on cumulative basis I will have an extra €538 in my take home pay in 2020 but will owe this plus the €260 above back to Revenue after the year end.

Correct but my advice is so that you mitigate the possibility of a real reduction in net income in the future, they are going to tax it anyway I wouldn't like to add on taking the tax refunds also into account as its going to hurt.

Pistachio19 · 10-04-2020 12:10pm

kennethsmyth wrote: »

Correct but my advice is so that you mitigate the possibility of a real reduction in net income in the future, they are going to tax it anyway I wouldn't like to add on taking the tax refunds also into account as its going to hurt.

Your advice contradicts the advice previously given on this thread:

"Why did you move staff to week 1 basis? Unless told to by revenue you should never do this, indeed, revenue don’t even tell you that it’s ok to do this now, it should be all done via the rpn’s"

Where did you get your advice to move staff to week 1?

Seve OB · 10-04-2020 12:30pm

blackwhite wrote: »

It’ll cost them approx €1.75 per employee minimum - 0.5% employers PRSI 😂

There is no employer prsi on the subsidy. Only on the top up

Seve OB · 10-04-2020 12:33pm

kennethsmyth wrote: »

Advice is to ask your employer to put you on a week one basis so you only receive tax credits for each individual week.

That is bad advice. Your payroll operator should never ever change your status from cumulative to week 1 off their own bat. They must go by the rpn which is updated before every pay run.

You could ask the revenue to move you to a week 1 basis though.

blackwhite · 10-04-2020 12:51pm

Seve OB wrote: »

There is no employer prsi on the subsidy. Only on the top up

Sorry - you're right. Had been looking at the guidance again after a glass or two of red

Seve OB · 10-04-2020 1:26pm

blackwhite wrote: »

Sorry - you're right. Had been looking at the guidance again after a glass or two of red

been there!:P

han2000 · 10-04-2020 1:32pm

kennethsmyth wrote: »

Correct but my advice is so that you mitigate the possibility of a real reduction in net income in the future, they are going to tax it anyway I wouldn't like to add on taking the tax refunds also into account as its going to hurt.

Very true, I'm thinking myself that I'm going to stay on cumulative basis and any the extra net pay I receive for the next few weeks I will put aside with no intention of spending it.

Just given the way things are at the minute I'd rather have any extra cash at hand just in case things get worse work wise.

CaoinDory · 10-04-2020 4:19pm

Hi guys,

So OHs employer put him on the covid payment about 2 wks ago. But he rang today and asked him to come in on Tuesday saying that he can work a certain amount of hours without affecting the payment.

I've tried reading citizens info but I'm very confused. Does anyone know if this is true? (Employer tends to bs alot!)

**EDITED TO ADD- It is meant to be am essential service that hes doing***

biko · 10-04-2020 5:00pm

Some info here your OH can dig through.

https://www.gov.ie/en/service/be74d3-covid-19-pandemic-unemployment-payment/

Possibly this applies

If you have been temporarily placed on a shorter working week, you may qualify for Short Time Work Support.

Masala · 10-04-2020 5:15pm

Question.... does an employer HAVE to top up to the level of the Wk1-Wk09 average??

EG.... John worked a ball of overtime for January cost Pat his mate did only bare 39 hrs. They both on same rate. But John average take home for the 9 weeks was say €800 and Pat average (on 39hr weeks as he did very little OT) was €580. If both worked 39 hrs at same rate they would each come put with say €550 for argument sake. What figure has the employer to pay Pat as part of this scheme? Covid19 subsidy + Top up = €800 or Covid19+Topup = €550.

Jeez... this is a minefield!

CaoinDory · 10-04-2020 5:36pm

biko wrote: »

Some info here your OH can dig through.

https://www.gov.ie/en/service/be74d3-covid-19-pandemic-unemployment-payment/

Possibly this applies

I was looking at that. But hea already been put onto the covid payment. Would this be something different?

Seve OB · 10-04-2020 5:43pm

No requirement to top up at all

eh i dunno · 10-04-2020 6:12pm

https://twitter.com/FergalBowers/status/1248575820060405760?s=09

They should publish the names of the companies who contributed nothing

Seve OB · 10-04-2020 6:30pm

eh i dunno wrote: »

https://twitter.com/FergalBowers/status/1248575820060405760?s=09

They should publish the names of the companies who contributed nothing

Why? Do they Normally publish the pay rates of individual companies?

Some companies may not have a shilling and be closed up but are operating the scheme. So your witch hunt won’t show a true picture.

anonymous08 · 10-04-2020 6:52pm

Why is 76K gross quoted as the limit in many places and nett figure 960 PW quoted in other places.

Surely a gross figure would be more equitable etc.

Also, how is the estimated pay calculated is it pay in 2019 or the 1st 2 months of 2020

Fanirish · 10-04-2020 6:59pm

Question: if employee was on unpaid compassionate leave for January are these excluded in the calculation of average weekly pay for the scheme?

Beasty · 10-04-2020 6:59pm

Threads merged

Tow · 10-04-2020 7:37pm

anonymous08 wrote: »

Why is 76K gross quoted as the limit in many places and nett figure 960 PW quoted in other places.

In the very early planning days 76K was used. This changed after a few days to 960 Revenue Average Net Pay. Which is Gross Pay - (Income Tax + PRSI + USC), so not necessarily the Net Pay on your payslip and Gross Pay is the PMOD definition. This is not the same as Taxable Pay, it does not have Travel tickets (salary sacrifice) etc reduced from it. The Revenue FAQ is incorrect to use the term taxable pay in it's examples.

Surely a gross figure would be more equitable etc.

The system is as specified by the Minister of Finance and Department of Finance.

Also, how is the estimated pay calculated is it pay in 2019 or the 1st 2 months of 2020

Average of Jan and Feb. Providing a submission with a Pay Date in February was received and the employer uploaded them before the 15th of March and did not subsequently modify them any way after the 15th. The weekly value is calculated by dividing by the number of insurable weeks, capped at 9.

blackwhite · 10-04-2020 8:23pm

anonymous08 wrote: »

Why is 76K gross quoted as the limit in many places and nett figure 960 PW quoted in other places.

Surely a gross figure would be more equitable etc.

Also, how is the estimated pay calculated is it pay in 2019 or the 1st 2 months of 2020

76k Gross is a highly over-simplified number.

The limit on a gross basis will vary from person to person, because people will have different tax credits, different cut-off points (if sharing with spouse/partner) and different tax allowable deductions, all which will have impacted on tax paid in Jan and Feb, and which will consequently impact on their Average Net Pay for Jan/Feb.

In our place we’ve someone on 54k gross who doesn’t qualify because he has additional credits, and a significant transfer of standard rate cut-off from his wife.
We’ve another person on 63k who makes zero pension contributions and only has standard credits, and this comfortably meets the limit

Seve OB · 10-04-2020 9:38pm

blackwhite wrote: »

76k Gross is a highly over-simplified number.

The limit on a gross basis will vary from person to person, because people will have different tax credits, different cut-off points (if sharing with spouse/partner) and different tax allowable deductions, all which will have impacted on tax paid in Jan and Feb, and which will consequently impact on their Average Net Pay for Jan/Feb.

In our place we’ve someone on 54k gross who doesn’t qualify because he has additional credits, and a significant transfer of standard rate cut-off from his wife.
We’ve another person on 63k who makes zero pension contributions and only has standard credits, and this comfortably meets the limit

A reason why the system is stupid.

Tow · 10-04-2020 10:20pm

Seve OB wrote: »

A reason why the system is stupid.

It is back of an envelope stuff. Not helped that PUP is too high, so companies who have work have staff leaving and then first they know about it is the Cessation Date coming in on employee's RPNs.

blackwhite · 10-04-2020 11:16pm

Seve OB wrote: »

A reason why the system is stupid.

We’ve a large numbers of employees going into the scheme this month. We plan to pay the max top-up before penalties kick in.

I’ve had our payroll manager running dummy payrolls to see what the impact is for our people. A significant number of the staff are going to end up actually receiving more net pay than normal due to the reduced tax/usc and zero PRSI on all pay.
I’ve been running some scenarios on how their situation might look when Revenue come looking to collect tax on the subsidy. Lower earners are actually going to end up better off, with unused credits offsetting much of the tax, and the saving from no PRSI whilst on J9 status still outweighing what’s left to pay. Makes no sense but that’s how they’ve set it

garden · 11-04-2020 12:18am

I’ve read through the posts and am still not really getting it - I got exactly the same net wage this week as every other week €420 , (except last week where I got €450 )with covid 19 payment - in a nutshell have I basically gotten a pay decrease I.e will I at some point have to pay tax on this?

Heres Johnny · 11-04-2020 7:16am

garden wrote: »

I’ve read through the posts and am still not really getting it - I got exactly the same net wage this week as every other week €420 , (except last week where I got €450 )with covid 19 payment - in a nutshell have I basically gotten a pay decrease I.e will I at some point have to pay tax on this?

Yes in a nutshell you are correct but it's not your employer, it's the way the scheme is forced to operate.
However I feel there may be a few twists and turns in this yet as regards people's tax bills.
But at 420 a week your tax bill be very minimal to be honest.

garden · 11-04-2020 8:56am

Thanks for reply. Is there a calculator that can work out tact that will be owed, my partner got approx €700 last week - is it really €30 for every €100?

Heres Johnny · 11-04-2020 9:48am

garden wrote: »

Thanks for reply. Is there a calculator that can work out tact that will be owed, my partner got approx €700 last week - is it really €30 for every €100?

No, the 30% was an arbritary figure from financial planner Eoin Mcgee on Facebook. Its a general rule of thumb. There's no calculator yet but I'm sure someone will knock one together it would be fairly handy to do in excel to be honest, but Google deloitte tax calculator and it works out what tax is payable based on normal circumstances.
You could fairly easily calculate tax liability using info from your payslip for cumulative amounts actually paid to see the difference between what would normally be paid and what is being paid.

Wage Subsidy Scheme Issues

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