Background

The Temporary Wage Subsidy Scheme (TWSS) was introduced by the Government in March 2020 as an emergency measure to get financial assistance to employers and employees impacted by the pandemic.

Revenue operated the scheme in 2 phases.

1. Transitional Phase (26 March 2020 – 3 May 2020) – operated as a simplified process whereby eligible employers were paid a maximum subsidy of €410 in respect of each eligible employee, regardless of the employee’s income for January and February 2020.
2. Operational Phase (4 May – 31 August 2020) – where eligible employers were reimbursed a subsidy based on each eligible employee’s average net weekly pay for January and February 2020, subject to the applicable rates, appropriate tapering (if relevant) and income levels.

The majority of the reconciliation balances directly relate to the transitional phase of the scheme whereby employers were paid the equivalent of €410 per week for each eligible employee for the first the 6-weeks of the scheme. This meant that many employers received a payment that exceeded the subsidy correctly due.

Reconciliation Process

The reconciliation balance is based on the actual information provided to Revenue by the employer. It is the difference between the subsidy amounts paid to the employer by Revenue and the subsidy amounts properly due and paid to each eligible employee.

On 22/3/2021, Revenue advised that most employers can now access their TWSS reconciliation balances in Revenue’s Online Service (ROS).

Approximately 44% of employers who availed of TWSS do not have any balance to repay or are due further TWSS payments from Revenue while 56% of such employers have a reconciliation balance to repay.

Employers not availing of the Debt Warehousing Scheme can pay their outstanding reconciliation balance on ROS or alternatively can apply for a Phased Payment Arrangement and pay the amount owed over an extended timeline.

Data Warehousing Scheme

For employers who have a payable reconciliation balance and who are eligible to avail of the Debt Warehousing Scheme, the TWSS reconciliation balance to be repaid may be warehoused.

This will happen automatically for employers managed by Revenue’s Business and Personal Divisions and any other employers already availing of debt warehousing.

Other employers, not currently availing of debt warehousing and managed by Revenue’s Medium Enterprise and Large Corporates Divisions, may apply to warehouse their TWSS reconciliation balance if they meet the general criteria of the Debt Warehousing Scheme.

Double Check Your Statement

The reconciliation should be double checked as we have found a number of them to be incorrect. Reconcile payroll submissions submitted on ROS with the sum total of rebates received from April 2020 to August 2020.

Make any corrections required. This will result in a revised reconciliation balance, which will be immediately available in ROS.

Key Dates

Recognising the demands and challenges faced by employers and their tax agents in this current economic environment the reconciliation information is available to review and finalise until 30 June 2021.

Further Reading:

• Detailed information from Revenue in relation to the TWSS reconciliation process can be found at Temporary Wage Subsidy Scheme(TWSS) Reconciliation.March 2021
• Detailed information from Revenue on the Debt Warehousing Scheme can be found at Information booklet on debt warehousing and reduced rate of interest for outstanding ‘non-COVID-19’ debts and information on Phased Payment Arrangements can be found at Guidelines for Phased Payment – Installment Arrangements.

If you need assistance in relation to TWSS or any aspect of current Government supports for business, do get in touch with Jamie O’Hanlon and team at  info@avidpartners.ie or call us on 0818 303 087.