Potential problems for employees returning to work on April 12th after being on PUP

Under current Government guidelines from 12 April, all residential construction can restart as well as early-learning and childcare projects.

Under these plans there are likely to be a large number of employees who will be returning to work next week and signing off PUP.

Payroll operators should be aware of the following;

1) While employees are on PUP Revenue will have reduced their tax credits and Standard Rate Cut Off Points (SRCOP). In most cases credits will have been reduced to zero. Revenue have explained the process in a document on their website.

2) An employee's tax credits will be recalculated after Revenue have been informed by Social Welfare that the employee has stopped receiving PUP - however, this process may take a couple of weeks.

3) After an employee closes their PUP claim there may still be payments due to be paid to the employee because the Social Welfare week runs from Friday to Thursday, and if an employee is still signed on for Friday 9th April they will be entitled to a full payment for the week up to Thursday 15th April, even if they recommence work on Monday 12th April. Social Welfare will consider this claim to be open until the last payment has been made to the employee.

4) The Department of Social Welfare will only inform Revenue that the employee has closed their PUP claim after the final payment has been made, so for many employees Revenue wont have recalculated their tax credits before you process their first wages.

5) This may result in the first couple of weeks wages being calculated with very low (or zero) tax credits on a Week 1 Basis

6) Employers should pay special attention to any employees whom they are paying on a "Net To Gross" basis as the re-grossed pay is likely to be very high, and because of the nature of a Week 1 calculation this may not be recouped by the employer for a long time (if it can be recouped at all)

7) Employees who are jointly assessed and their spouse continues to receive PUP may not have their tax credits restored.

8) You are required to always use the most up to date RPN available on Revenue when running your wages.