Revenue have now issued confirmation of key changes made to the Covid-19 Temporary Wage Subsidy Scheme as announced by Minister of Finance, Paschal Donohoe.
Who does this apply to?
This will apply to all those earning up to €500 per week / €31,000 approx. per year and for those earning over €586 per week / €38,000 approx. per year. There is no change to the qualifying criteria for employers to the scheme.
The key changes are as follows;
- 85% subsidy available for employees whose previous average net weekly income did not exceed €412
- No tapering of the 85% subsidy will apply for those in receipt of it, where the employer makes a ‘top-up’ payment of more than 15% of the employee’s previous pay, to bring it in line to €350 net per week.
- A subsidy of up to €350 per week to be made payable to all employees whose previous average weekly net pay was between €412 – €500
- If an employee’s previous weekly net pay exceeded €586 a tiered approach will now apply which takes into account the amount paid by the employer. A maximum subsidy of €350 per week available with a tiered approach.
- For all employees with a weekly net pay exceeding €960 / €76,000 per year, there is no subsidy available. However, if their net pay is now reduced by 20% as a result of Covid-19, then they will qualify for a subsidy of €205. If their net pay is now reduced by 40% they will qualify for a subsidy of €350.
When does this commence?
From 4th May, this scheme will be fully operational for all payroll submissions to Revenue. The transitional wage subsidy scheme will remain in place until that time. To recap, there were 2 phases to the Wage Subsidy Scheme;
Phase 1 – transitional phase that adds onto the Employer Refund Scheme in effect since 15th March 2020, under which the employer got a refund of €203 per week per employee it kept on payroll. The subsidy scheme is increasing this to €410 maximum regardless if the employer makes an additional payment to the employee or not.
Phase 2 – The scheme is aiming to be in operation no later than 20th April 2020 and subsidies paid to each employee will be based on their average net weekly pay, subject to the maximum weekly amounts. There will be further updates on this Phase issued shortly.
While you are here, Read more of our Covid-19 update blogs here