The fine tuning of the Temporary Wage Subsidy Scheme (Sponsored)

Apr 16, 2020

By Jason Collins, Founder of CollSoft Payroll

The Minister of Finance has announced some revisions to the Temporary Wage Subsidy Scheme (TWSS) that will be effective for payroll submitted to Revenue on or after 4 May with a pay date on or after that date.

These revisions are designed to improve the subsidy for those whose average net weekly pay for January and February 2020 was less than €500 as well as those whose average net weekly pay was in excess of €960.

One of the major problems with the current scheme was the situation whereby employees on lower levels of pay could well have been better off being in receipt of the Pandemic Unemployment Payment rather than being in full-time employment.

At the other end of the scale, there were many employees who were disqualified from the current scheme because their average net pay in January and February was in excess of €960 per week even though their current pay was now below that threshold.

The implementation of the subsidy where the average net pay is above €586 is now more involved as it introduces a tiered approach that takes into account the amount currently being paid by the employer as well as the level of reduction in pay borne by the employee.

This tiering of the subsidy is going to introduce some interesting complexities, such as the fact that, in some cases, there will be more than one combination of subsidy plus top-up which will achieve the same net pay for an employee. Employers will need to ensure they pay close attention to this to ensure that they can maximise their utilisation of the subsidy and minimise their own costs.

How can you keep up to date?

Over the coming week, we can expect Revenue to publish updated FAQs that are likely to include more detailed examples to help explain the new scheme, especially with the new tiered structure for pay above €586.

We will also be updating the free TWSS calculator on our website collsoft.ie to enable you to perform calculations under both the current and the new systems.

More information on the changes announced to the scheme can be found here and here

(Sponsored by CollSoft. Please note that although the information above is correct at the time of writing, circumstances may change. It is therefore advisable to seek professional advice on such issues.)