Questions and Answers

I have employees earning under €38k. How will the changes to the Temporary Wage Subsidy Scheme affect me?

I am an employer with 4 employees all earning under €38k per annum. Will the changes to the Temporary Wage Subsidy Scheme affect me?

Revenue have announced further changes to the COVID-19 Temporary Wage Subsidy Scheme. The earliest date that these changes will take effect is May 4th however this date is liable to change to a later date.

Here are the changes that affect employers with employees earning under €38k per annum:

1. Staff on average net weekly wages of up to €412 per week

Changes to the scheme will mean that those employees earning an average net weekly wage of €412 (roughly equivalent to €24,400 gross per annum) will see the subsidy paid by the State rise from 70% to 85% of their average net weekly pay.

Another change for employees in this bracket is that the employer can top up the wages to €350 per week (including the subsidy) without experiencing any reduction in the subsidy payable even if the top up plus subsidy exceeds their average net weekly pay.

For example if you have an employee on €300 average net weekly pay. The subsidy amount will now be €255 (€300 x 85%)

The employer can now decide to provide a maximum top up of €95. This will mean the employee will receive €350 net pay but the subsidy amount to be repaid in respect of that employee will not be reduced, it stands at €255.

This relaxation of the top up rules only applies to employees in this wage bracket.

For all other employees any top up which, combined with the subsidy, results in the employee receiving more than their average net weekly wage will mean a reduction in the subsidy payable to the employer.

2. Staff on average net weekly wages of between €412 and €500

For employees with an average net weekly wage between €412 and €500 (roughly equivalent to €31,000 gross per annum), the subsidy amount will be fixed at €350 per week.

3. Staff on average net weekly wages of between €500 and €586

For employees with an average net weekly wage of between €500 and €586 (roughly equivalent to €38,000 gross per annum) there will be no change i.e. the subsidy will continue to be 70% of the average net weekly wage subject to a maximum subsidy of €410 per week.

Published 20/04/2020

Date published 20 Apr 2020 | Last updated 20 Apr 2020

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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