Revenue update on TWSS reconciliation process

Revenue update on TWSS reconciliation process

Revenue advises that Temporary Wage Subsidy Scheme (TWSS) reconciliation balances are now available for employers to review in Revenue’s Online Service (ROS).

Provisional statistics from Revenue provide key insights into the TWSS reconciliation position for employers who availed of the scheme.

Overall summary:

  • 66,500 employers availed of TWSS support payments of €2.9 billion in respect of 664,000 employees over the course of the scheme
  • 90% of all TWSS employers have now returned all subsidy paid data
    • 3% are due additional subsidy payments worth approximately €1.4 million
    • 41% are reconciled meaning no balance is payable
    • 56% have a reconciliation balance with a combined total reconciliation amount of €224 million. Approximately €90 million of this has already been repaid to Revenue.
    • Certain employers have only provided some of the subsidy paid data in respect of payslips for which a subsidy was claimed, while others have not reported any subsidy paid data. The combined total potential reconciliation amount for these employers is approximately €77 million.

The Temporary Wage Subsidy Scheme (TWSS) was introduced by the Government on 26 March 2020 as an emergency measure to get much needed financial assistance to employers and employees, where businesses were seriously impacted by the necessary restrictions imposed to fight the spread of the COVID-19 virus. 

Given the seriousness of the circumstances, and the urgent need to channel immediate support to employers 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.

Approximately 90% 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.

At the time of joining the TWSS, employers made a declaration that they would repay any excess subsidy payments arising. Revenue provided employers with guidelines on how to calculate the correct subsidy amount during the transitional phase and advised employers to only pay this amount and to retain any surplus for repayment. Revenue also advised that a reconciliation of subsidy payments made under the TWSS would take place after the scheme had finished.

To facilitate TWSS reconciliation, employers were required to report the actual subsidy that was paid to their employees, for each pay slip and each pay date. Revenue engaged extensively with employers, and tax agents acting on their behalf, over the past number of months regarding the reconciliation process.

Today (22/3/2021), Revenue advised that most employers can now 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. 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. 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. 

Outlining the next steps employers should take to complete the TWSS reconciliation process, head of Revenue’s Accountant General’s and Strategic Planning Division, Mr. Brian Boyle, said:

Today, most employers will receive a notification to their ROS inbox advising them that their TWSS reconciliation information is available. 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.

The reconciliation balance is calculated using the actual information provided to Revenue by employers. To finalise matters, employers should review the information they provided and accept their reconciliation balance.

In the rare circumstance where an employer believes that the information he or she previously provided is incorrect, and that the reconciliation balance is therefore incorrect, he or she should review the subsidy paid data previously submitted and make any corrections required. This will result in a revised reconciliation balance, which will be immediately available in ROS.

While the majority of employers will be able to access their TWSS reconciliation balance today, we are still calculating the reconciliation balance for a small number of employers who have provided all subsidy paid data. We will notify these employers when this is complete, and the balance is available in ROS.”

Outlining the measures and supports in place for employers who have a reconciliation balance to repay, Mr. Boyle said:

Firstly, it’s important to note that 41% of employers who availed of TWSS are reconciled, meaning no balance is payable. These employers can simply accept their reconciliation, thereby finalising their participation in TWSS

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.  

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.

Any additional TWSS payments due to employers will be paid by Revenue to the employer’s nominated bank account, which is already known to us, as soon as the reconciliation balance has been accepted by them.”

Finally, there are a small number of employers who have either not engaged or only partially engaged in the reconciliation process to date. These employers typically have either reported nil payments of TWSS to their employees, have not reported any payments of TWSS to their employees, or have not reported subsidy paid data for all employee payslips in respect of whom TWSS was claimed. Highlighting the impact of not engaging with the TWSS reconciliation process for the relevant individual employers, Mr. Boyle said:

“Over the last number of months, we have engaged with the relatively small number of employers who have not submitted any, or all, of their subsidy paid data, requesting them to provide the outstanding information. Where an employer has not submitted any subsidy paid data, the TWSS reconciliation balance, to be repaid to Revenue, will reflect the total amount of subsidy paid to them under the TWSS. My advice to these employers is to immediately look at their TWSS reconciliation balance in ROS to understand the full impact of not submitting the required information. To rectify matters, the employers concerned need to provide the full and accurate subsidy paid data as soon as possible, thereby ensuring that their reconciliation balance is accurate. If the information is not provided, then the total TWSS payment received by them over the course of the scheme, as reflected in the reconciliation balance, is fully repayable to Revenue.”

Provisional statistics in relation to the TWSS reconciliation can be found here.

Detailed information in relation to the TWSS reconciliation process can be found here.

Detailed information on the Debt Warehousing Scheme can be found here and information on Phased Payment Arrangements can be found here.

[Ends 22/3/2021] 

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