Employer wants to reduce/stop my PAYE

My job is finished at the end of the year. The company will be closed. Last week my employer asked if he could reduce my paye but still pay me the same net pay for the remaining 3 pay days. There are no other employees. The last one finished last Friday.

I know this is not right and he shouldnt do this but I was thinking its the lesser of two evils for me. If I say no he could tell me to finish up now instead of December (I havent found another job yet). I know he is under pressure and he has always been very fair and generous in the past.

How could this effect me if I'm let go in December, havent found another job yet and need to sign on for social welfare?

Thanks in advance

I would be a bit concerned about this arrangement apart from the fact that you are being asked to get involved in something that is illegal. It may affect your redundancy payment as redundancy is based on your salary at the time of leaving

Thanks for the feedback. I am concerned, dont get me wrong. But I'm not entitled to statutory redundancy only here a year and I doubt he'd be giving me anything. He has given me 3 months notice to try find another job I think in lieu of redundancy.
I have 10 years worth of proper pay with paye/prsi etc. Will 3 months effect me?
Not trying to condone it at all but just wondering what I should do?

I'm confused. You are there a year but have 10 years of pay/PRSI? I assume from another job. That would have no effect on your situation, although with the recent budget I think you do need 2 years PRSI to get jobseekers benefit.

It's a little unclear what your employer is doing.

Is the gross remaining the same, but he is reducing the PAYE payment to revenue? If that happens surely he is just transferring the tax liability to you? If you did a tax return for this year you would get a bill? Not sure about the legal status of this action.

Is the gross being reported as less to revenue to allow him to pay less tax, and in effect pay you under the table? Definitely illegal.

If you want to help the guy out and be legal, I think you would have to accept a reduced wage.

Ix.

Sorry for the confusion. I'm there less than 2 years but have been working fulltime and permanent for 10 years elsewhere.
I thought I would be entitled to jobseekers benefit given that I've 10 yrs continuous employment. Is this not the case?

I think I'm being a bit naive here.
I had presumed that he would reduce my paye and effectively say to revenue that my salary has reduced but actually paying me the same net figure. I know this is wrong.
Am I safer just suggesting a lower salary then for the last few months?

While I want to help him I have to make sure that I'm not stung.

From the information you have given re PRSI it appears you would be entitled to JB when your job finishes.
As for the other part as I have already said I could not recommend this course of action as both you and employer are getting into something which I suspect neither of you would be proud of.
If he cannot afford to pay you would he not put you on a 3 day week and you apply for JB for the other 3 days giving you a chance to look for new employment before you completely finish the current one

Beware of direct or complicit involvement in any scheme or plan to defraud Revenue of VAT or PAYE/PRSI, even where a business is in crisis and in danger of closure.

Page 4 of this 1999 issue of Tax Briefing [broken link removed] cites a number of casess where people ended up getting jail sentences, albeit suspended, for such offences.

Thanks everyone for your replies. You've confirmed what I feel uncomfortable about. I have to look after myself after all. Will talk about it today and come to a different arrangement.
As you said Black Sheep, I would rather do a 3 day week than be worried something is going to come back to haunt me.
Thanks again

As another incentive not to go down that route, emember that SW will be asking for details of your last employment when you sign on. They will wonder if figures don't look right and will report it to their own inspectors if they suspect collusion. I think the suggested 3 day week option would be best route for all involved, including your employer. chat to him about it maybe?