Emergency supports for employers to deal with COVID-19 – what you need to know
26 March 2020
The Emergency Measures in the Public Interest (Covid-19) Bill 2020
The Government published the terms of the Emergency Measures in the Public Interest (Covid-19) Bill on Tuesday, 24 March 2020 which is hoped will lead to the protection of jobs, tenants and to further support healthcare professionals. The Dáil is to sit today, Thursday 26 March 2020 to debate this Bill as an emergency measure and accordingly, the terms of the Bill may be subject to change. The details set out below are based on the current draft of the Bill.
National Covid-19 Income Support Scheme
Significantly, this legislation will underpin a National Covid-19 Income Support Scheme (“the Scheme”) which will be administered by the Revenue Commissioners and replaces the Employer Refund Scheme previously run by the Department of Employment Affairs and Social Protection. In summary, this Scheme is designed to allow employers to pay their employees during the current pandemic and will be available across all sectors of the economy (excluding the public service and the non-commercial semi-state sector).
The Government have committed to refunding up to 70% of an eligible employee’s wages, with a current maximum weekly salary ceiling of €410 (until April 2020) to eligible employers. From April 2020, the Scheme will move to a subsidy payment based on 70% of the normal net weekly pay for each qualifying employee up to a maximum of €410. The draft Bill details an intention to provide support in respect of those employees earning in excess of €586 a week but less than €960. The level of this support will be determined by the Minister for Finance in consultation with the Minister for Employment Affairs and Social Protection and the Minister for Public Expenditure and Reform. It is not currently proposed that any support would be provided in respect of those employees earning more than €960 gross per week. However, further information in relation to the workings of the Scheme from April 2020 will be released shortly.
Some of the key points of the Scheme include:
- Employers who wish to participate in this Scheme should register through the Revenue Online Service (www.ros.ie).
- The timeframe for this Scheme is from 14 March 2020 to 30 June 2020.
- Income tax and the Universal Social Charge will not be applied by the Revenue Commissioners to the subsidy payment. Employee PRSI will also not apply to the subsidy or any top up payment by the employer. Neither will employer’s PRSI apply to the subsidy and will be reduced from 11.05% to 0.5% on any top up payment.
- In order to qualify for this Scheme, employers must be able to show they have lost a minimum of 25% of their trade and must ensure they continue to make best efforts to obtain as near to 100% of their normal income as possible.
- This Scheme is available to both employers who are topping up their employees’ wages and to those employers not in a position to do so.
- Where employers are already successfully obtaining refunds under the Department of Employment Affairs and Social Protection’s Employer Refund Scheme, there is no need to reapply to this new Scheme.
- Employees must have been on the employer’s payroll as at 29 February 2020 and a payroll submission must have been made to the Revenue Commissioner in respect of this employee from 1 February 2020 to 15 March 2020.
- Employers must not avail of this Scheme for any employees who are currently receiving a Covid-19 related support from the Department of Employment Affairs and Social Protection.
Interestingly, it is proposed that the names and addresses of all employers who receive subsidies under this Scheme will be published on the Revenue Commissioners’ website.
One important point to note is that it will be an offence to knowingly submit an incorrect return, statement or information to the Revenue Commissioners and for failing to provide the Scheme’s funds to the employees.
The Irish Redundancy Payments legislation entitles employers to place employees on temporary lay-off or to impose short-time working where it is necessary to do so and the employer must reasonably believe that such a measure will be temporary.
Ordinarily, after 13 weeks of lay-off or short-time working, if the employer cannot reinstate the employee to full time working, then the employee is entitled to require the employer to make him or her redundant and to pay redundancy by serving a notice of intention to claim redundancy. The legislation currently allows for this notice to be served after 4 weeks of lay off or short time working. It is also possible for an employer to counter such a redundancy notice and refuse to make a redundancy payment but only if the employer reasonably believes that, within four weeks of the date the employee has served the notice, the employee will be able to return to their normal role for a continuous period of at least 13 weeks. The draft bill recognises that in the current uncertain situation employers could be faced with potentially unmanageable costs if employees placed on temporary lay-off were to be entitled to claim redundancy pay after the first four weeks of continuous lay off.
However, this Bill contains provisions which ensure that employees who are placed on lay-off or short-time working as a result of this health crisis cannot make redundancy claims regardless of the length of any such lay off or short time between the period of 13 March 2020 and 31 May 2020 (and this period may be extended).
Covid-19 Pandemic Unemployment Payment for Employees
For those employees who have lost their jobs due to the pandemic, the emergency Covid-19 Pandemic Unemployment Payment is to increase from €203 to €350 per week. A distinction is being made between those individuals who are unemployed for reasons unrelated to Covid-19, as these individuals will remain entitled to a sum of €203 with Jobseekers’ Benefit.
Covid-19 Pandemic Unemployment Payment for Self-Employed
Those individuals who are self-employed and who qualify for assistance will be paid the Covid-19 Pandemic Unemployment Payment of €350 which will be administered by the Department of Employment Affairs and Social Protection rather than through the Revenue’s Scheme, outlined above.
Covid-19 Illness Payment
Covid-19 illness payment has also been increased from €203 per week to €350 per week.