High earners can register now for access to wage subsidy scheme
Revenue tells tax advisers that clients can avoid year-end tax bill by using credits now
Revenue briefed 550 tax advisers on the working of the temporary Covid-19 wage subsidt scheme. Photograph: Nick Bradshaw
Higher earners can apply immediately to avail of the amended Covid-19 wage subsidy scheme, according to Revenue, while other workers will have to wait until next month to benefit from improvements announced this week.
Tax officials also advised that people can avoid a potential tax bill at year end by contacting Revenue now, the Irish Tax Institute heard.
Minister for Finance Paschal Donohoe announced on Wednesday that he was increasing the amount the Government will pay to help keep workers in their jobs during the shutdown triggered by the spread of coronavirus.
The temporary wage subsidy was originally designed to pay 70 per cent of people’s salaries up to a maximum of €410 a week. Employers were permitted to top this up to 100 per cent where they could.
But, employers noted that they were struggling to retain people on lower pay and fewer hours – especially part-time workers – who felt they could earn as much or more by claiming the alternative pandemic unemployment benefit, of €350 a week.
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In response, noting that the aim of the scheme was “to maximise staff retention and firm viability” during the crisis, Mr Donohoe said the State would fund up to 85 per cent of salaries.
He also announced that those earning over €76,000 in take home pay, who had previously been excluded from the scheme, could now apply if their gross pay had now fallen below the €76,000 level. Special arrangements have been put in place to ensure no one availing of the scheme can earn more than €960 a week in take home pay.
In a briefing to 550 tax specialists organised by the Irish Tax Institute, Revenue officials said people who had, till now, been ruled out because their pre-Covid net pay topped €76,000 could apply with immediate effect for income support under the scheme if their gross income was now below that level.
The Department of Finance had said on Wednesday that the new higher rates of pay under the wage subsidy scheme would only take effect on or after May 4th, with no backdating of benefit. The tax institute said it welcomed the confirmation of the position for higher earners.
Revenue officials also told the tax advisers that people in receipt of the temporary wage subsidy can avoid a retrospective tax bill at the end of the year by contacting the tax office now and asking for their tax credits to be applied on a weekly or monthly basis.
They said the request would have to come through Revenue’s MyAccount online service for personal tax customers. Although not everyone has online access to their tax affairs, Revenue is actively trying to encourage it.
More than €30 million had been paid in tax refunds to employees impacted by the Covid-19 crisis since the subsidy scheme was originally announced, the tax officials said. However, employers who had failed to make their returns by the 15th of March are excluded from the scheme.
The meeting, organised by the Irish Tax Institute via videoconference to allow Revenue officials to clarify aspects of how the temporary wage subsidy scheme works, heard that Revenue would take a “fair, pragmatic and reasonable” approach with what was an emergency response to an emergency situation.