Revenue Webinar with The Wheel and Charities Institute Ireland Now Available Online

The Wheel was delighted today to co-host a Revenue webinar with Charities Institute Ireland on the Temporary Wage Subsidy Scheme (TWSS) and the Employment Wage Subsidy Scheme (EWSS).

Karen Byrne from Revenue presented and was joined by colleagues in a panel Q&A to answer members' queries — a transcript of this is available below.

A number of interesting clarifications were received on how the TWSS will be reconciled and the relevant timeframes, as well as how the EWSS will unfold and the main qualifying criteria.

Listen to the session here (passcode: .*Q6mZsR).

Any queries on the TWSS or EWSS can be directed to The Wheel's Director of Finance, Tony Ward (tony@wheel.ie).

The following questions arose from the webinar. The below answers are provided for sharing with attendees and as a general resource for those availing of the wage subsidy schemes.

Question 1: Will the payroll software providers e.g. Big Red Payroll be providing anything that will assist with these requirements?

Revenue have been in close contact with major payroll providers throughout process and as far as Revenue are aware, many have incorporated TWSS and EWSS functionality.  All payroll operators and employer should check with their software provider and also ensure they are using most recent software version.

Question 2: EWSS Gross Pay - does this include employer pension contribution?

Gross pay is the employee’s pay of any kind, including:

• notional pay
• share based remuneration
• the employees pay before any pension contributions or salary sacrifice deductions are made.

Chapter 3 of the Employers Guide to PAYE details the different types of pay that would be included.

Question 3: Are the business divisions ring fenced to a single legal entity?

Where it can be demonstrated that separate business units are separate and have dedicated employees in those units, and the trading in that unit is specifically affected, it can be looked at separately

Question 4: Are there exceptions to the comparison of the 30% to the same period in 2019?

Only where a business was not in existence prior to 01 November 2019 in which case 2020 July to December forecast can be compared to budget, in all other cases where a business was in existence prior to 01 November 2019, the second half of 2019 must be used as comparative

Question 5: Is income from fundraising included in this 30% reduction in turnover/customer orders?

Any income that is considered as turnover per conventional accounting rules can be taken into account - advise consult with professional advisors or accountant if in any doubt

Question 6: On the TWSS if you projected to be down 25% but actually were not on reflection is there a requirement to repay subsidies?

See answer to question 14

Question 7: Can you go into projections more please e.g. our budget projection for this year was 20% more than previous period.

As per previous question, if you were in operation prior to 01 November 2019, the only relevant comparison for EWSS is second half 2020 forecast v second half 2019 actual, it does not matter what your budget for second half 2020 is or was.

Question 8: What about restricted versus unrestricted organisation income for those who receive funding/ donations/ grants that is to be spent on a specific purpose/project and cannot be spent on organisation admin costs? This income may bring organisations over the 30% reduction line, but that income may not be unrestricted to use for salaries for example.

Again, it depends on definition of turnover and the assessment of likely diminution in that turnover, normal accounting rules for income recognition should be used and you should consult with your professional advisers

Question 9: Can an employer claim EWSS if an employee is on a 3 day week and claiming social welfare for the other two days?

Yes, but it will be reduced proportionately

Question 10: We have a new employee due to start employment this week. Salary is paid on a monthly basis. this employee will receive 2 weeks salary for this month. Is subsidy calculated based on Gross weekly amount per week. Will subsidy be based on gross pay over the 2 week period or month (4weeks). If over 4 weeks we may not reach threshold to receive subsidy as only 2 weeks gross salary paid?

Only two weeks will be eligible to match the number of weeks they actually work.

Question 11: Can EWSS be claimed for employees funded by a Pobal Grant?

Where specific roles are already funded through a specific public funding source these should not be included in either TWSS or EWSS as it would amount to double funding.

Question 12: Can you explain how to treat the public grants to show reduction of 30%?

Where grants are not specifically allocated to support individual salaries, all funding should be assessed from an accounting recognition for the reference period and assessed against the same period in 2019 to determine a 30% diminution.

Question 13: What happens an Employees Stamp during this process?  Does it still carry the value of the Class A stamp?

EWSS operates under normal PAYE and PRSI, with the exception that the employer is credited with a reduced rate.  For TWSS the J9 PRSI class was used to provide the employee and employer with a reduced rate of PRSI.  Legislation has been passed by the Oireachtas which allows the Department of Employment Affairs and Social Protection to attribute the normal PRSI class used by employees for the period they were under the TWSS.

Question 14: Under the TWSS where public sector grant income is 'restricted' and pays 80% of salaries cost and hasn't been cut/reduced - is the TWSS going to be reclaimed by Revenue  a) no b) all of it c) or an appropriate % subject to discussion.

In March/April 2020 when most businesses joined the scheme, they had to make their best estimate about eligibility. For some it was clear cut in that they had to close their business due to public health restrictions, for others it may not have been as straightforward, for example, the construction sector shut down later and re-started trading, albeit in a different fashion, in Phase 1 of re-opening.

By the end of Quarter 2, it will be clearer whether a business did in fact meet the eligibility criteria.

If a business did not meet the eligibility criteria, or no longer meets it, but had reasonable grounds for assuming it would, it should have immediately ceased 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. Employers who consider they do not now meet the eligibility criteria should have ceased returning J9 PRSI Class payroll submissions to Revenue.

The employer should have also ensured that the PRSI class on all its employees was returned to the correct PRSI class and used for all future payroll submissions. The employer must retain records in relation to the operation of the scheme including all subsidy payments made to employees.

Those employers who have stopped participating in the TWSS will be included in the reconciliation phase of the scheme and will be included in the list of TWSS participants published at the end of the scheme

During the scheme reconciliation employer can reconcile payments made and refunds received and address any outstanding subsidy refunds or repayments necessary.

Penalties will apply to any abuse of the Subsidy Scheme by self-declaring incorrectly, not providing funds to employees or non-adherence to Revenue, and any other relevant, guidelines.

Question 15: Do employers have to repay the EWSS? and/or the balance of employer PRSI?

Once an employer meets the EWSS criteria and performs a reassessment at end of each month, if they determine they need to come out of EWSS, no refund is sought for the period for which they qualified.

Question 16: Would it be possible to provide charity examples of what does and does not qualify in the guidance, regarding calculation/inclusion  of restricted income?

Each Charity has different funding models and different conditions may apply to each grant, donation or funding received.  As outlined in the answers to previous questions normal accounting rules for income recognition should be used and you should consult with your professional advisers to ensure eligibility.

Question 17: Is the Childcare Subvention Scheme funded by Pobal an exception to the public funded rule?

The Community Childcare Subvention (CCS) Programme is a childcare programme targeted to support parents on a low income to avail of reduced childcare costs at participating community childcare services. The Department of Children and Youth Affairs (DCYA) pays for a portion of the childcare costs for eligible children, with the parent paying the remainder.

Any participating community not-for-profit childcare service benefiting from the scheme should check the conditions of the scheme to ensure it is not specifically allocated to support individual salaries and that their turnover is assessed using normal accounting rules for income recognition for the reference period and assessed against the same period in 2019 to determine a 30% diminution.