Covid-19 Temporary Wage Subsidy Scheme

Temporary Wage Subsidy Scheme

Temporary Wage Subsidy Scheme is available to employers across all sectors (excluding the Public Service and Non-Commercial Semi-State Sector) who keep employees on the payroll throughout the COVID-19 pandemic.

This allows employers to retain links with employees for when business picks up after the crisis.

This new measure also provides financial support to Irish workers affected by the Covid-19 crisis, enabling employees, whose employers are affected by the pandemic, to receive supports directly from their employer.

Employers are encouraged to facilitate employees by operating the scheme, by retaining employees on their books and by making best efforts to maintain a significant, or 100% income, for the period of the scheme. 

The Scheme is operated by the Revenue and is expected to last 12 weeks from 26 March 2020

Applying for the Scheme: Employer Eligibility and Supporting Proofs

To qualify for the COVID-19 Temporary Wage Subsidy Scheme employers must be experiencing a significant negative economic disruption due to the Covid-19 pandemic. 

Application for the scheme is based on self-assessment principles, a qualifying employer declares that it is significantly impacted by the crisis. Key indicators are that the employer’s turnover is likely to decrease by 25% for quarter 2, 2020; that the business is unable to meet normal wages or normal outputs and any other indicators set out in Revenue guidelines.

Regarding retention of employees, the scheme is confined to employees who were on the employer’s payroll at 29 February 2020 and for whom a payroll submission has already been made to Revenue in the period from 1 February 2020 to 15 March 2020. Employees who were laid off after 29 February 2020 may be taken back onto the payroll for the purposes of this scheme.

Revenue will not be looking for proof of qualification at this stage. However, Revenue may in future look for such proof. In this context employers should retain their evidence/basis for entering the scheme. Eligibility Supporting Proofs include the following:

  • If for some reason the decline in turnover was less than 25% the business should retain documentation supporting its rationale for believing that it would suffer such a decline
  • Copies of documentation submitted to a financial institution as part of the negotiation of forbearance measures with the financial institution
  • Copies of notifications or communications to employees or Trade Unions or staff representative bodies of salary/wage cuts implemented as a direct result of the COVID-19 pandemic
  • Copies of documentation that show that any cash reserves in the business that are required to fund debt that is equal or greater than the reserve amount
  • Evidence of reliance on the Government Credit Guarantee Scheme or overdraft facilities or other borrowings for capital purposes
  • In the case of start-up businesses, for example, evidence of a decline in investment by at least 25% arising from the COVID-19 crisis

An employer that has been hit by a significant decline in business but has strong cash reserves, that are not required to fund debt, will still qualify for the Scheme but the Government would expect the employer to continue to pay a significant proportion of the employees’ wages.

For further information from Revenue click here

For further information on the COVID-19 Temporary Wage Subsidy Scheme: Employer Eligibility and Supporting Proofs click here