COVID-19: Updates to the Temporary Wage Subsidy Scheme

On Wednesday 15 April, the Minister for Finance announced further updates to the Temporary Wage Subsidy Scheme.

Operating the scheme from 16 April 2020

Previously, employees whose average net weekly pay exceeded €960 did not qualify for the scheme. However, from April 16 onwards, where an employee’s pre-COVID average net weekly pay was greater than €960, and their post-COVID net weekly pay has fallen below €960, the Temporary Wage Subsidy Scheme will be available for these individuals. 

Where the employee’s earnings have now been reduced by:

• more than 20%, a subsidy of up to €205 would be payable
• more than 60%, a subsidy of up to €350 would be payable

The subsidy will be tapered where the gross pay paid by the employer plus the subsidy amount exceeds €960 net per week. 

No subsidy will be payable to an employee where their post-COVID average net weekly pay has fallen below €960 but their employer pays sufficient gross salary which equals an amount that is more than 80% of the employee’s previous average net weekly pay.

Operating the scheme from 4 May 2020

The Minister announced further updates to the scheme which are expected to apply to payrolls submitted from 4 May 2020. No backdating of these revised subsidy rates will apply.

Employees previously earning up to €586 net per week:

• An 85% subsidy (previously a 70% subsidy) will be payable for employees whose previous average new weekly pay did not exceed €412.
• A flat rate subsidy of €350 will be payable for employees whose previous average net weekly pay was more than €412 but no more than €500.
• A 70% subsidy will be payable for employees whose previous average net weekly pay was more than €500 but no more than €586, subject to a maximum subsidy cap of €410.

Employees previously earning in excess €586 net per week:

• A maximum subsidy of €350 will be payable to employees whose previous average net weekly pay was in excess of €586 but no more than €960. The subsidy will be calculated based on the amount of additional payments made by the employer, if any.
• Where the employer pays sufficient gross salary which equals an amount up to 60% of the employee’s previous net weekly earnings, a subsidy of €350 will be payable.
• Where the employer pays sufficient gross salary which equals an amount more than 60% but less than 80% of the employee’s previous net weekly earnings, a subsidy of €205 will be payable.
• No subsidy will be payable where the employer pays sufficient gross salary which equals an amount more than 80% of the employee’s previous net weekly earnings.

Tapering of the subsidy will apply in all instances where the gross pay paid by the employer plus the subsidy amount exceeds the employee’s previous net weekly pay to ensure that no employee would be better off under the scheme. The only exception where tapering will not apply is where an employer pays an additional payment which when added to the subsidy does not exceed €350.

If you require assistance in accessing these supports or with any challenges you currently face during this crisis, please contact a member of the tax team or your normal Crowe contact.