Covid-19 Temporary Wage Subsidy Scheme Update
Revenue have issued updated guidance on the Temporary Wage Subsidy Scheme (TWSS)
The key points to note are as follows:
- The operation of the TWSS is extended to 31 August 2020.
- The eligibility criteria to continue participating within the scheme or to now join the scheme remain unchanged. The business must have suffered a significant negative economic impact as a result of the Covid-19 pandemic. The indicators of this are a minimum of a 25 reduction in turnover, customer orders or any other ‘reasonable basis’ for the three months to 30 June 2020, Quarter 2.
- Revenue have given the following guidance on what would be considered a ‘reasonable basis’
In Revenue’s administration of this scheme, the key focus will be on significant negative economic disruption due to COVID-19. In instances where application of the “turnover” and “customer orders” tests do not adequately demonstrate this, an alternative “reasonable basis” should be applied. It is not possible to be prescriptive in guidance as to what might or might not constitute such a reasonable basis. However, the starting position is that neither the turnover test nor the reduction in customer orders test is capable of being applied to the business in question. It is not sufficient that the business does not meet either of these tests. It must be the case that neither of those tests are capable of being applied to the business in question before an alternative basis for assessing eligibility is used. In all such cases, guidance from Revenue should be sought through the relevant Revenue Division/Branch responsible for the tax affairs of the employer concerned. An example may be where the majority of a company’s contracts take 6 months or longer to complete and that the business otherwise is eligible for the subsidy; then such a business will be treated as meeting the eligibility criteria, where no substantive work has taken place on any order since the business stopped working due to the COVID-19 Pandemic.
- If a business did not meet the eligibility criteria but had reasonable grounds for assuming it would, it should immediately cease claiming the subsidy for the extended scheme. Revenue will require evidence of the assumptions supporting the original self-assessment of eligibility and, once the basis is reasonable, will not seek to claw-back the subsidy paid for the original period. If there was not a reasonable basis, the subsidy is repayable.
- To ensure the TWSS is operating correctly Revenue is conducting a programme of compliance checks on all employers availing of the scheme and will be contacting all employers to confirm that:
- They meet the eligibility criteria;
- Employees are receiving the correct amount of subsidy; and
- The subsidy amount is being correctly recorded in employee payslips.
- Employers will be informed of Revenue checks via the client inbox on ROS and must be answered within 5 days.