Information regarding the Enhanced Covid-19 Scheme
The Government has announced a more enhanced scheme for employers and employees who are facing difficulties as a result of the COVID-19 outbreak.
This new scheme is called the 'Temporary Covid-19 Wage Subsidy Scheme' and takes effect from Thursday 26th March 2020.
This replaces the previous Employer Covid-19 Refund Scheme.
Comprehensive Revenue guidance on the Temporary Covid-19 Wage Subsidy Scheme can be found here
We are currently finalising an upgrade and will make this available to you as soon as possible.
We have summarised the key points of the Scheme below.
- This scheme replaces the Employer Covid-19 Refund Scheme from 26th March 2020.
- The scheme applies to employers who may wish to top up employee payments and those who are not in a position to do so.
- Employers already registered for the Covid-19 Refund Scheme do not need to re-register for the new scheme.
- Employers that are not registered but wish to register for this scheme can do so through myEnquiries (details on how to do this are in the Revenue link above).
- The Scheme is expected to run for 12 weeks
Who qualifies for the scheme?
To qualify, employers:
- must be experiencing significant negative economic disruption due to Covid-19
- must be able to demonstrate, to the satisfaction of Revenue, a minimum of a 25% decline in turnover
- be unable to pay normal wages and normal outgoings fully
- retain their employees on the payroll.
The Scheme is restricted to employees who were on the employer’s payroll as at 29 February 2020, and for whom a payroll submission has already been made to Revenue in the period from 1 February 2020 and 15 March 2020
- Under the scheme, employers can pay 70% of the employee’s average weekly net pay as a non-taxable payment (net pay = Gross less Income Tax, USC & Employee PRSI) and in turn receive a refund from Revenue for this.
This payment is capped at:
- €410 per week where the average net weekly pay is less than or equal to €586
- €350 where the average net weekly pay is greater than €586 and less than or equal to €960
(employees with an average net weekly pay greater than €960 will be excluded from the subsidy scheme)
- The period for calculating an employee's average weekly pay is January & February 2020 (an average pay calculator is provided in Thesaurus Payroll Manager)
- Employers may top up this payment if they are in a position to do so, however the maximum value of the top-up is 30% of the employee’s average weekly net pay (Gross less Income Tax, USC & Employer PRSI).
- Any top-up payment made is taxable and USC-able
- The combined payment is to be processed under PRSI Class J9
- If an employer tops up payments by more than the permitted 30%, their subsidy will be tapered i.e. for every €1 extra paid to an employee, they will lose €1 on the subsidy
- The refund from Revenue will, in general, be made to the employer within 2 working days after receipt of the payroll submission (PSR)
Phases of the scheme
Transitional Phase - 26th March to 20th April
- During the transitional phase, employers must work out the payment that can be made to the employees i.e. the 70% tax free payment and the maximum top-up allowed (an average pay calculator is provided in Thesaurus Payroll Manager)
- Revenue will automatically refund €410 per week per employee on the scheme (as they won’t know what employees are entitled to)
- At a later date, Revenue will perform a reconciliation and will look for repayment of any overpayments
Operational Phase – From 21st April
- During the operational phase Revenue will inform employers how much they can pay tax free and the maximum top-up allowed
- They will use the payroll data submitted for January & February to work this out
- We currently have no information on how this will be communicated to employers
- Revenue will refund the 70% due as they will have instructed the employer how much could be paid
Employees claiming from the DEASP directly
Employers must not operate this scheme for any employee who is making a claim for duplicate support (e.g. Pandemic Unemployment Payment) from the DEASP. Where an employee previously laid off has been re-hired, the employee will qualify for the Subsidy scheme if their DEASP claim is ceased.
Where employees will be claiming from the DEASP directly, please note a cessation date will be required on a payroll submission for such employees.