Temporary Wage Subsidy Scheme (TWSS)

The Emergency Measures in the Public Interest (Covid-19) Bill 2020 was signed into law on 27 March 2020 and introduced the Temporary Wage Subsidy Scheme (TWSS). The TWSS, which superseded the Employer Covid-19 Refund Scheme, took effect from 26 March 2020. The scheme was expected to last 12 weeks from this date. On 5 June, the scheme was extended by the Minister for Finance and Public Expenditure and Reform, Paschal Donohoe T.D. to 31 August 2020.

Initially the subsidy scheme refunded employers €410 for each qualifying employee i.e. Transitional Phase of the TWSS. From 4 May 2020, the subsidy payment moved to a system based on the previous average net weekly pay for January and February 2020 for each employee i.e. Operational Phase of the TWSS.

To qualify for the scheme, a business must have experienced a significant negative economic disruption due to the COVID-19 pandemic. Key indicators of this were that the employer’s turnover was likely to decrease by 25% for quarter 2, 2020; that the business was unable to meet normal wages or normal outputs and any other indicators set out in Revenue guidelines.

Revenue will perform a reconciliation of employer refunds made to the employer for the duration of the scheme i.e. the difference between subsidy the employee was eligible for and the €410 that Revenue refunded to the employer during the Transitional phase. In Stage one, employers are required to report the actual subsidy paid to their employees for each pay date. In Stage two, Revenue will determine the amount of TWSS, if any, owing back to Revenue from employers. Each active payslip will be reconciled.

Revenue has used the information supplied by employers on TWSS payments to pre-populate the 2020 Preliminary End of Year Statements made available to all employees on myAccount from 15 January 2021.  Revenue will be collecting any tax underpaid on TWSS from the employees over a 4-year period from January 2022.  Revenue has information and videos on their website to inform employees about how to view their provisional 2020 tax position and file an income tax return.  Employers who wish to pay their employees’ TWSS liability can do so without the application of a Benefit-in-Kind charge. Revenue has provided information on their website on this facility. This is included on Revenue’s TWSS webpage, accessible below.

Finance Act 2020 extended the Debt Warehousing Scheme to include the amounts of TWSS overpaid to employers by Revenue, for example, during the Transitional Phase of the scheme. Revenue released the TWSS reconciliation files to employers on Monday, 22 March 2021 and most employers can access their TWSS reconciliation balances in Revenue’s Online Service (ROS). The reconciliation balance is based on the actual information provided to Revenue by the employer and will identify over or underpayments of TWSS, according to Revenue’s records.