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Temporary COVID-19 Wage Subsidy Scheme

Last modified: 30th March 20 00.16

Please note the following advice is summarised from Revenue website and guidelines given, it is only intended to give you an idea of the scheme and we will always encourage you to come speak with us directly to we can assess your own businesses situation

The information that follows is based on the terms of the Emergency Measures in the Public Interest (Covid-19) Bill 2020 (As passed by Dáil) which was recently published.

Employers are asked to keep employees on the payroll during this emergency and to maintain 100% or a significant part of their income for the period of the scheme. This is currently 12 weeks from 26th March 2020 but can be extended if required.

Please note that in April the scheme will move to pay only 70% of the normal weekly pay of each employee to a max of €410, as per Revenue no later than 20th April that Revenue will pay the subsidy. Normal weekly wage is based on the average weekly earnings from January – February (i.e. insurable weeks average to 29/02/2020).

Do I qualify for the scheme?

  • Be able to demonstrate to Revenue a minimum of 25% decline in turnover (see note on this below)
  • Be unable to pay normal wages
  • Be unable to pay normal outgoings fully and (see note on this below)
  • Keep your employees on the payroll
  • Also Employee must have been on the payroll as at 29th February 2020 and was on a payroll submission between 1st February and 15th March
  • Names of Employers using the scheme will be published on the Revenue website

What does it mean if I qualify from above list?

  • You can claim a subsidy from Revenue via your payroll as follows:
    • Max €410 per week where average net weekly wages is less than or equal to €585 per week or
    • Max of €350 per week where the average net weekly pay is between €586 but less than or equal to €960
    • Greather than €960 will not be supported at all.
  • Refund will be made 2 working days to the business bank account after payroll submitted to Revenue online (we do this if we do your payroll)
  • Employer pays the staff the wages per payslip.
  • Employers PRSI wil not apply on the subsidy element of the payment if no top up. if there is a top up above the Subsidy this will be at a reduced rate of 0.5%. Please remember this top up must be included in the payroll submission before payments made to staff.
  • Employee will not pay PRSI, Income Tax, or USC on their subsidy payment through payroll (however we see that Revenue state the following ”  However, the Subsidy will be liable to Income Tax and USC on review at the end of the year. “)
  • It is up to the Employee to contact Revenue to cease LPT deductions.

Other notes on the scheme not mentioned already

  • Cannot pay more net pay now to benefit from the subsidy
  • Cannot back date employees on the payroll
  • Any Employee Tax refunds from operating the scheme will be refunded.
  • Cannot run for staff making a duplicate claim from DEASP. e,g, Covid-19 Pandemic Unemployment Payment
  • If you put them on the Covid19 Pandemic Unemployment Payment you are encouraged to re-hire the employee as they would have been marked as a leaver on your payroll. Details on how your staff can close the claim of the Covid-19 Pandemic Unemployment Payment can be found here

Further details can be found on the Revenue website here

If you think you meet the conditions or wish to find out more please contact us. So we can discuss this with you and get it set up on your payroll for you.

Further Notes on how to Determine my turnover being down 25%

Revenue have issued some detailed guidance. They have based it on a “honesty” principal and self assessment, this means we need to keep on file our notes and workings on how we determined the reduction.

To calculate the reduction of turnover Revenue are using Q2 2020. This can be a decline in orders as well in March 2020 versus February 2020.

The requirement to be unable to pay other outgoings: – a business with cash reserves can now apply this scheme, we had thought when first announced this was an issue but Revenue have updated their guidance on this and they will continue to do so.

You need to demonstrate that any cash reserves in the business is to fund debt. That is to say the debt is equal or greater to cash reserves.

Revenue have also stated that where there is strong cash reserves and that they are not required to fund debt, will still qualify for the scheme but the Government would expect that they employer continue to pay a significant proportion of the employees’ wages.

As with all the above as this is a very fluid situation we will keep ourselves updated and update the website for your information, so please check the FAQ page and we will note there if there is an update.