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Changes to the COVID-19 Wage Subsidy Scheme

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Changes to the COVID-19 Wage Subsidy Scheme

Revenue have announced significant changes to the Temporary Wage Subsidy Scheme

Revenue have announced significant changes to the Temporary Wage Subsidy Scheme due to take effect early next month. We summarise below the key points.
 

1. When will these changes come in to effect?

These changes will not take effect until May 4th 2020 at the earliest. 
 
Any payrolls processed before these changes take effect will continue to be subject to the current rules, more info on which can be found here
 

2. Who do the changes apply to?

The changes announced impact 4 groups:
 
  1. They impact employers who have staff on average net weekly wages of €412 per week (roughly €24,400 gross per annum) – the amount of the subsidy has been increased from 70% to 85% and they can make top up payments that exceed the average net weekly wage without affecting the subsidy in certain circumstances.
  2. They impact employers who have staff on average net weekly wages of between €412 and €500 (roughly €31k gross per annum) – the subsidy for these employees will be a flat rate of €350 per week.
  3. They impact employers with staff earning average net weekly wages of between €586 (roughly €38k gross per annum) and €960 (roughly €76k gross per annum) – a new tapered relief has been introduced which link different levels of the subsidy with thresholds of gross pay paid by the employer.
  4. They impact employers with workers who previously were on average net weekly wages of over €960 – those employees, who were previously excluded from subsidy scheme, can now get on the scheme if they have taken a significant pay cut. 
 

3. As an employer what do I need to do now?

As outlined above these new rules only affect pay run calculations on or after May 4th 2020 at the earliest (with the exception of those on over €76k per annum, see link for detailed example below).
 
Any pay runs before this date will be administered under the current wage subsidy scheme rules. 
 
What you will need to do is look at your likely wage bills for the period after May 4th and recalculate what subsidy you, as employer, will be entitled to for each of your eligible employees.
 
You can find detailed examples of how employees in each wage bracket will be affected here:
 
 

4. What if my staff have left and gone on the pandemic unemployment payment?

Any staff who have been laid off and who have moved on to the Pandemic Unemployment Payment can be rehired and will qualify for a subsidy if they meet the definition of an eligible employee. They will also need to cease any ongoing claims for unemployment benefit with the DEASP including the Pandemic Unemployment Payment.
 
The Revenue Commissioners have urged anyone thinking of rehiring employees to do so before May 4th as it will make the administration of the scheme much easier for them.
 
 
Published 20/04/2020
 
 

Date published 20 Apr 2020 | Last updated 7 May 2024

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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