Temporary Wage Subsidy Scheme

Temporary Wage Subsidy Scheme

General Information

The Government announced new measures to provide financial support to Irish workers affected by the Covid-19 crisis. As part of these measures, Revenue will operate a Temporary Wage Subsidy Scheme. The scheme, enables employees, whose employers are affected by the pandemic, to receive significant supports directly from their employer. The scheme will run for 12 weeks from 26 March 2020. Draft legislation governing the scheme will be published shortly.

The operation of the Temporary Wage Subsidy Scheme will be available to employers who keep employees on the payroll throughout the COVID-19 pandemic, meaning employers can retain links with employees for when business picks up after the crisis. Additionally, the operation of the scheme will reduce the burden on the Department of Employment Affairs and Social Protection (DEASP) which is dealing with the other Covid-19 related payments.

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.

Key Features of the scheme

  • Replaces the previous COVID-19 Refund Scheme.
  • Initially, and from this Thursday (26 March 2020), the subsidy scheme will refund employers up to a maximum of €410 per each qualifying employee.
  • However, employers should pay no more than the normal take home pay of the employee.
  • The subsidy scheme applies to employers who top up employees’ wages and those that aren’t in a position to do so.
  • Employers make this special support payment to their employees through their normal payroll process.
  • Employers will then be reimbursed for amounts paid to employees and notified to Revenue via the payroll process.
  • The reimbursement will, in general, be made within two working days after receipt of the payroll submission.
  • In April, the scheme will move to a subsidy payment based on 70% of the weekly average take home pay for each employee up to a maximum of €410*.
  • Income tax and USC will not be applied to the subsidy payment through the payroll.
  • Employee PRSI will not apply to the subsidy or any top up payment by the employer.
  • Employers PRSI will not apply to the subsidy will be reduced from 10.5% to 0.5% on the top up payment.

* (details on this will be made available by Revenue in due course).

Who does the scheme apply to?

The Scheme is available to employers from all sectors (excluding the public service and non-commercial semi-state sector) whose business activities are being adversely impacted by the COVID-19 pandemic.

The scheme is available for employers who retain staff on payroll; some of the staff may be temporarily not working or some may be on reduced hours and/or reduced pay. Provided the employer meets the conditions set out below and subject to the levels of pay to the employees the employer may be eligible for the scheme for some or all of the employees.

 


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