COVID-19 Wage Subsidy Scheme: Phase 2 and extension of the scheme

Apr 20, 2020

The Minister for Finance announced changes to the Temporary Wage Subsidy Scheme last week (15 April). The changes can be found in the Minister’s formal determination . These changes are intended to deal with some anomalies in the scheme.  A second phase ‘Phase 2’ of the scheme will be effective from 4 May 2020, for payroll submissions on or after that date.  No backdating is allowed.  The extension of the subsidy to support employees who had an average net weekly salary greater than €960 (€76,000 gross p.a.) but their post-COVID-19 pay has fallen below €960 per week will apply with effect from 16 April.  Revenue has updated their guidance on the scheme to include the changes announced by the Minister. 

Phase 2 – effective 4 May 2020

The changes to the scheme can be found in the Minister’s formal determination and the details published tell us:

  • Employees with an average net weekly pay of less than €412 will qualify for an increased subsidy of 85%, employers can top up to a max of €350.No tapering of the subsidy will apply.
  • There will be no change to the subsidy for employees with an average net weekly wage between €412 and €500. A flat rate subsidy of €350 is payable.
  • A tiered approach will apply when determining the max subsidy available to employees with an average net weekly pay in excess of €586 and less than €960, and who are in receipt of a top up to their weekly pay from their employer. The max subsidy is €350.
  • There will be no change to the subsidy for employees with an average net weekly pay between €500 and €586. The subsidy is 70% up to a max of €410. 

Scheme extended – effective 16 April 2020

A much-welcome enhancement is the extension of the scheme to support employees who had an average net weekly salary greater than €960 (€76,000 gross p.a.) but their post-COVID-19 pay has fallen below €960 per week.  A subsidy may be available in respect of these employees based on the level of reduction in their pay and their amount of the employer top up payment.   Per the details, the subsidy will be tapered to ensure that the net weekly pay does not exceed €960 per week.

Further information on the operation of the new arrangements within the payroll process are expected later from Revenue. 

We are continuing to obtain timely clarifications. As we receive relevant updates, we are advising all members via the appropriate channels. Please check in regularly on the COVID-19 Hub for latest updates.