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Employers won't be forced to top up subsidy payments - Donohoe

The Minister for Finance has ruled out introducing measures to force employers availing of the Temporary Wage Subsidy Scheme to top-up their employees' subsidy payments.

Paschal Donohoe was responding to a Parliamentary Question from Labour Finance Spokesperson Ged Nash who asked whether he planned to introduce compulsory top-up payments similar to comparative EU wage subsidy schemes.

The Minister noted that the TWSS is predicated on the employer wanting to keep the employees on the payroll and to retain them until business picks up, and highlighted the speed at which the scheme had been set up to bring financial assistance to businesses and workers.

He acknowledged that the employer is expected to make "best efforts" to maintain the employee's average net pre-pandemic income from January and February for the duration of the TWSS.

However, he noted: "At the same time, there is no minimum amount that the employer must pay as an additional payment in order to be eligible for the scheme."

Mr Donohoe confirmed that for Revenue operational systems reasons,  the employer must enter at least €0.01 in Gross Pay when running its payroll.

"There are no plans to change these arrangements," he stated.

Mr Donohoe raised the possibility that there will be "even more" companies in future that will have a low level of income coming in because demand for their goods or services has evaporated, meaning they are unable to add to the government subsidy.

He said that requiring employers to add to the 70% floor on wages "could undermine the ability of the scheme to operate".

Mr Donohoe also confirmed that the TWSS has no role in relation to the employer/employee relationship "in so far as the terms, conditions and entitlements of the employment are concerned".

Under the TWSS, the amount of the subsidy for each employee is calculated based on the average net weekly pay reported in January and Feburary of this year, but the Minister went on to stress: "There is no distinction made regarding the subsidy amount based on whether the business has closed due to the restrictions brought in by the Government or has continued to trade with employees continuing to part-time or work full time with similar hours as before the Covid-19 pandemic."

Labour Finance Spokesperson Ged Nash said it was disappointing that the Minister refused to entertain any suggestion to make top-ups of any form compulsory, based on the performance of the business and of various economic sectors.

"Other EU States have made no bones about obliging some firms to supplement the generous taxpayer support provided through compulsory top-ups, but Ireland seems to have an aversion to attaching any conditions whatsoever to the unprecedented State support provided during this pandemic," said Mr. Nash.

He said Labour supported retention of the TWSS, which he described as a real lifeline for struggling business.

"However, we have also argued that it needs to evolve too and ultimately be replaced by a German-style short time working scheme to ensure that the support in the future is properly targeted to assist the firms and sectors who will need it most in what will be an uneven recovery," said Mr. Nash.

The Labour Finance spokesperson had also sought information on the percentage of employees on the TWSS who were receiving top-up payments from their employer raging from €1 to €100 per week at intervals of €10.

Minister Donohoe cited TWSS statistics from the Revenue Commissioners from 2 July  indicating that 88% of employees have received wage payments from employers in addition to the TWSS subsidy.

45% of weekly paid employees covered by the TWSS were receiving top-ups ranging from €1-€100, with a further 32% receiving top-ups ranging from €101 and €200.

Only 11.2% of TWSS workers were receiving top ups of between €201 and €300, with 12.6% getting an additional €300 plus.

The Minister stressed that the question of an individual's entitlements in an employment context, and the question of what wages an employer may or may not be in a position to pay such an employee in light of the impact of the Covid-19 pandemic on the employers business "are matters that are outside the remit of the TWSS."

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