Specialist
From 1st September, the Employment Wage Subsidy Scheme (EWSS) will replace the current Temporary Wage Subsidy Scheme (TWSS) for Irish employers. The changeover will bring about a significant impact on many organisations’ inhouse and outsourced payroll services.
As outlined in the Revenue guidelines issued on 14th August , the Employment Wage Subsidy Scheme (EWSS) is currently expected to run until the end of March 2021 and eligible employers will receive a flat-rate subsidy for eligible employees and benefit from a reduced rate of employers PRSI on eligible wages. Under the Employment Wage Subsidy Scheme the employer will pay the employee normal wages and following submission of the payroll return , employers will then receive a subsidy from the Revenue in respect of eligible employees. Currently Revenue guidance states that refunds will be made as soon as practicable after the return date.
Employer eligibility criteria for the Employment Wage Subsidy Scheme
To benefit from the Employment Wage Subsidy Scheme, employers must possess & retain a valid tax clearance certificate. If your organisation is availing of the TWSS, you should receive confirmation of your tax clearance status from Revenue via your ROS Inbox. If your organisation is considering availing of the Employment Wage Subsidy Scheme, we would encourage you to check your current tax clearance status immediately – if current tax clearance is not held, an application can be made online through the ROS e-Tax clearance service. It is important to note that businesses with Covid-19 related tax debts which are warehoused, or non-Covid-19 debts which are included in a phased payment arrangement, can obtain tax clearance and, provided all other conditions are met, can participate in the Employment Wage Subsidy Scheme (EWSS). Subsidies will not be paid to businesses without tax clearance.
The business must be able to demonstrate that they expect to experience a 30% reduction in turnover or orders between 1st July and 31st December 2020 (looking at the period as a whole and compared with the same July to December period last year). The reduction in turnover must be caused by Covid-19. (NB: CCA 58a registered childcare businesses are included in the scheme with no turnover test required).
Employer registration for the Employment Wage Subsidy Scheme
Employers will need to register. We’re currently expecting registrations to open via Revenue Online Services today (18th August) for our Payroll Service Clients. We are encouraging our Payroll Service Clients to get in touch with the Paycheck Plus team in the usual way if they require our assistance with this registration.
Continued review of employer eligibility
With the exception of July 2020 and the final month of the scheme, employers are required to undertake a review on the last day of every month to ensure they continue to meet the above eligibility criteria. Employers who no longer meet the criteria must de-register with effect from the following day (1st of the month) and cease claiming the subsidy. If an employer becomes aware prior to the end of the month that they will no longer meet the eligibility criteria, they should de-register immediately and cease claiming the subsidy. In either case, if circumstances change again, an employer can re-register claim the Employment Wage Subsidy Scheme again from that date. Whilst Paycheck Plus expect to be able to facilitate the registration / de-registration on our Payroll Service Clients’ behalf, the continual review of the eligibility criteria remains the responsibility of the employer.
Employee eligibility for Employment Wage Subsidy Scheme
A subsidy can be claimed in respect of employees earning between €151.50 and €1,462 gross per week. Rates of the subsidy are as below; the number of insurable weeks will be used to calculate gross pay for pay periods other than weekly:
Proprietary directors are expected to be able to avail of the scheme in limited circumstances; additional guidance will be provided on this in due course.
July / August “sweepback” payment
In limited circumstances, employers and employees not eligible for the TWSS may be included on the Employment Wage Subsidy Scheme and backdated to 1st July 2020. Whilst this does not extend to employees whose net pay exceeded the TWSS thresholds, it may help new employers, or established employers with seasonal employees and new hires. Revenue expect to make a template available in late August showing the requisite information required for employers to submit by 5th September. Submission of this template will enable Revenue to calculate the total subsidy due to be paid for those employers wishing to avail of the sweepback payment. No additional submissions or amendments will be processed on or after 14th September in respect of July/August.
Compliance
The Employment Wage Subsidy Scheme will be administered by Revenue on a self-assessment basis. In due course, Revenue will issue further details on the assurance checks they expect to undertake in the future. Meanwhile it is imperative that employers retain all records relating to the operation of the Employment Wage Subsidy Scheme, specifically including those that support the expectation that turnover or customer orders will reduce by the requisite 30%, together with details of the monthly reviews of the eligibility criteria.
Article supplied by Paycheck Plus - Your Payroll Specialist Outsourced Payroll Service