Pandemic Unemployment Payment and Returning to Work

Monday 12 April 2021 was a day that gave cause for cautious optimism, as the Government began loosening restrictions and reopening the country. Provided COVID-19 numbers remain subdued over the coming months, many employees that have been relying on Pandemic Unemployment Payments (PUPs) since December 2020 can begin to return to work. 

Our blog post today is aimed at informing you on the process and what is required of you and your employees when making this transition.

Returning to Work

The very first thing that your employee needs to do on the date that they return to work is close their PUP claim on the DEASP website.

Until this is done, the process to change the employee’s RPN cannot begin and so will result in them paying more tax. The process is as follows:

  1. Your employee closes their PUP claim on the DEASP website.
  2. DEASP will make the last PUP payment due to your employee, before closing the claim on their system and informing Revenue.
  3. On receiving the information for DEASP, Revenue will update your employee’s tax credits in line with the amount received through PUP, before creating an updated RPN on a week 1 basis. 

From the date your employee(s) close their PUP claim, it will take approximately two weeks before an updated week 1 RPN will be available. If your employees are paid weekly or fortnightly for these pay periods they will pay more tax, due to no tax credits being available on the RPN.

This is unfortunately an unavoidable feature of the transition, but there are some things that you as an employer can do to minimise the extra tax your employees will have to pay:

  1. Encourage your employees to close their PUP claim on their first day back at work – this will get the process started.
  2. Pull RPNs for your employees as close to the payment date as possible – this will maximise the chances of receiving an updated RPN for your employee(s), reflecting that they’ve returned to work.

Any overpayments of tax and/or USC will be reimbursed, but employees will need to wait for their Statement of Liability in 2022, meaning that it is better to use the updated information  now if possible and save the wait.

NOTE: Overlap between PUP payments and first week back

The PUP system works as follows:

  • Friday of any given week: people enrolled for PUP are noted for payment in the following week.
  • Tuesday of the following week: PUP payments are made in accordance with the list of people collected on the Friday.

If your employee returns to work on a Monday and immediately closes their PUP claim, as they were still registered as unemployed on Friday they will still receive a PUP payment for their first week back at work. In other words the first week back they will receive both their salary and a PUP payment.

This is not an error so do not be concerned when this occurs. If you would like to learn more about the taxation of PUP for 2021 and the effect of returning to work, you can find out more on the Revenue page.

We hope that you have found the above information useful. If you have any questions on how the information above relates to SimplePay, please feel free to contact us at [email protected]

Equally, if you are not yet a client of SimplePay but would like to be, or if you’d like to know how we can take the effort out of filing and calculating payroll, get in contact with us or visit our website: www.simplepay.ie

Keep well and stay safe.

Team SimplePay

Level 5: Support for Businesses

As of midnight on 21 October, the whole of Ireland entered into level 5 of lockdown for a period of 6 weeks. Our blog post today looks into changes that have or are to be made to existing schemes, in order to help support your business and employees.

Employment Wage Support Scheme (EWSS)

The rate of subsidy for EWSS has been revised to help support your business under level 5. The EWSS rates are to be aligned with the PUP rates of payment. If your employees’ gross earnings were €400 or more per week prior to the pandemic, they will now receive €350.

These changes will be effective from the next payroll date, after 19 October 2020. For convenience we have attached the revised rates in the table below:

COVID-19 Restriction Support Scheme (CRSS)

The eligibility criteria for CRSS have been relaxed, meaning your company can qualify for it provided that your turnover is no more than 25% of the average weekly turnover for a period equal to the same number of weeks in 2019. New businesses will instead be required to use figures from 2020. If your business is affected by entering into level 5, this might provide you with a means of further relief, in addition to EWSS.

To qualify, your business must be operating from premises wholly located in a region which is subject to restrictions under the Government’s “Resilience and Recovery 2020: Plan for Living with Covid-19”.  As a result, you must be required to prohibit or restrict members of the public from entering your premises. Generally, restrictions apply at levels 3, 4 and 5, but your business might still qualify at lower levels, depending on your circumstances.

The support provided is as follows. Up to the first €20,000 of your company’s 2019 average weekly turnover, you will receive a 10% cash payment. If your business’s weekly turnover was greater than €20,000, any  amounts above this will accumulate additional payments at 5%, up to a maximum payment of €5,000 per week from the scheme. Therefore, to get the maximum amount, your business’s average weekly turnover in 2019 would need to be €80,000.

The scheme is due to run between 13 October 2020 and 31 March 2021, but Revenue is still in the process of adapting their systems for the scheme. Therefore the first payment under CRSS will be delayed until the CRSS system is live.

For more information on the CRSS, you can read the Government’s overview letter here.

Pandemic Unemployment Payment (PUP)

In relation to PUP, the Government has introduced a fourth bracket of payment. If your employee’s gross earnings were €400 or more per week prior to the pandemic, they will now receive €350 from their PUP payment. This aligns PUP with EWSS.

This change takes effect for all new applications received from 16 October 2020. All the other PUP brackets remain unchanged at €203, €250 and €300.

New applicants are being urged to apply online at MyWelfare.ie.

Sectors Exempted from Level 5 of Lockdown

If your business falls within one of the Government’s listed essential services or essential retailers, your business is permitted to continue operating under level 5.

The list of essential retailers can be found here.

The list of essential services can be found here

Please note that both these lists only apply to level 5 and may be changed if the lockdown level drops.

We hope that you have found the above information useful. If you have any questions on how the information above relates to SimplePay, please feel free to contact us at [email protected] 

Equally, if you are not yet a client of SimplePay but would like to be, or if you’d like to know how we can take the effort out of filing and calculating payroll, get in contact with us or visit our website: www.simplepay.ie

Keep well and stay safe.

Team SimplePay