Updated Information on Temporary Wage Subsidy Scheme
April 17, 2020
16 April 2020
Previously we advised that updated guidance would be available on or before 21 April 2020. However, this has now been delayed until further notice, which we understand is 4 May at the earliest. In addition, there are new rules which state that new subsidy rates will apply to payrolls submitted on or after 4 May with a pay date on or after that date.
Under the rules for the transitional period (from 26 March 2020 to 4 May), a subsidy of up to €410 was available for each employee where their average net weekly pay did not exceed €586 and of up to €350 for each employee where their average net weekly pay was between €586 and €960.
The new rules provide as follows:
Employees previously earning up to €586 net per week
- An 85% subsidy shall be payable in the case of employees whose previous average net weekly pay does not exceed €412;
- A flat rate subsidy of up to €350 shall be payable in the case of employees whose previous average net weekly pay is more than €412 but not more than €500;
- A 70% subsidy shall be payable in the case of employees whose previous average net weekly pay is more than €500 but not more than €586, with the maximum cap of €410 applying.
Employees previously earning in excess of €586 net per week but less than €960 net per week
- For employees whose previous average net weekly pay is greater than €586 per week but not more than €960 per week, the temporary wage subsidy shall not exceed €350 per week, and shall be calculated by reference to the amount of any additional payments made by the employer and its effect on the average net weekly pay as follows:
- A subsidy of €350 shall be payable to employees with previous average net weekly pay greater than €586 but not more than €960 per week, where the employer pays sufficient gross salary which equates to an amount up to 60% of the employee’s previous net weekly pay;
- A subsidy of €205 shall be payable to employees with previous average net weekly pay greater than €586 but not more than €960 per week, where the employer pays sufficient gross salary which equates to an amount that is more than 60% but not more than 80% of the employee’s previous net weekly pay;
- No subsidy shall be payable to employees with previous average net weekly pay greater than €586 but not more than €960 per week, where the employer pays sufficient gross salary which equates to an amount that is more than 80% of the employee’s previous net weekly pay.
We understand that if PRSI Class J9 is used for an employee in April that the employer will receive €410 per employee. However, if the conditions noted above are not satisfied, then the amounts paid will be recouped by Revenue when the scheme is fully operational.
From 16 April 2020, the wage subsidy will also be available for employees where their pre-Covid salary was greater than €76,000, if due to a salary cut their post-Covid salary has fallen below €76,000.
