The Irish Government have recently announced a range of Income Support Schemes for businesses and employees affected by the COVID-19 crisis.
Support for Workers
A national Covid-19 Income Support Scheme to provide financial support to Irish workers and companies affected by the crisis has been announced. This includes:
COVID-19 Temporary Wage Subsidy Scheme
This scheme allows employers to retain employees on the payroll throughout the crisis. From 25 March, employers will be initially refunded a qualifying employee’s net wages up to a maximum of €410 per week. Employers are encouraged where possible to top-up the employees’ wages to maintain their current level of earnings.
Employers will make this support payment to employees through their normal payroll process. Employers will be reimbursed for amounts paid to employees and notified to Revenue via the payroll process. It is expected that the reimbursement will be made within 2 days after the receipt of the payroll.
In April, the scheme will move to the subsidiary based payment of 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. Employee PRSI will not apply to the subsidy or any top up payment. Employers PRSI will not apply to the subsidy. However, it will apply to the top up payment at a reduced rate of 0.5%.
The scheme will apply to employers from all sectors whose business is negatively impacted by the pandemic.
There are conditions to meet to qualify for the scheme:
- The employer will need to be able to demonstrate that they have lost at least 25% of their trade due to the crisis
- Be unable to pay normal wages and outgoings fully
- Retain employees on the payroll.
The scheme will apply to employees who were on the 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 to 15 March 2020.
Employers can apply on the Revenue website. Details of employers who operated the scheme will be published on Revenue’s website after the scheme has ended.
The scheme is expected to last 12 weeks from 26 March 2020. Legislation will be published shortly.
This scheme has replaced the COVID-19 Employer Refund Scheme which was previously announced. If any employer had previously applied under the old scheme then they do not need to reapply as Revenue will contact them directly to confirm if they meet the conditions for the new scheme.
Penalties will apply to any abuse of the Subsidy Scheme.
COVID-19 Pandemic Unemployment Payment
This scheme will provide support to self-employed individuals and employees who have lost their job due to the crisis. This will provide a payment of €350 per week and is expected to be in place for the duration of the crisis. The amount was originally set at €203 but was increased on 24 March.
To apply for the scheme the individual must:
- Be an employee or self-employed aged between 18 and 66 years old.
- Live in the Republic of Ireland
- Have lost their job due to the COVID-19 pandemic, or have ceased trading.
The scheme applies to non EU/EEA workers, students and part-time workers.
Payment will be made into the individual’s bank account in an Irish financial institution every Tuesday after the application is processed.
Individuals who were working and also in receipt of a social welfare payment but have lost their job due to COVID-19 can also claim this payment in addition to their existing welfare payment.
In some situations, it may be more beneficial to claim jobseekers payment instead of the COVID-19 Pandemic payment as the amount receivable would be greater than under this scheme e.g. if the individual has one adult and one or more dependent children.
COVID-19 Illness payment
This will be available to any worker who has been diagnosed with COVID-19 or is self-isolating on the instruction of a doctor. To be eligible the worker must be absent from work and be confined to their home or a medical facility.
The payment will be €350 per week, an increase from €305 previously announced. It will be paid for a maximum of 2 weeks where a person is self-isolating. It will be paid for the duration of absence from work where an individual has been diagnosed with coronavirus up to a maximum of 10 weeks.
An application form will need to be submitted to the DESP by post. An online process is expected to be available by the end of March via MyWelfare.ie.
Short Time Work Support
This support will be available to employees who have temporarily been placed on a shorter working week in respect of their salary for the days they are no longer working. It will be paid for a maximum of 234 days and the entitlement will depend on the number of social insurance contributions which the individual has.
To qualify the individual must:
- Work 3 days per week or less having previously been employed on a full time basis
- Be under 66 years of age
- Be capable of and available for full time work and
- Have enough paid or credited social insurance contributions under the relevant class.
The rate of payment will depend on the individual’s average weekly earnings in the governing contribution year and the change in their work pattern. It will be based on a fraction of the maximum weekly jobseekers benefit of €203. This rate of payment may also be increased for a qualifing adult and qualifying children. Application can be made through MyWelfare.ie
A number of other supports have also been announced including:
- Legislation is being introduced to prevent the termination of residential tenancies and rent increases for the duration of the crisis
- Banks will support breaks in mortgage payments for buy-to-let bank customers with tenants affected by COVID 19 for up to 3 months.
- Banks will offer flexible arrangements including payment breaks for mortgages and other loans for customers affected by the crisis for a period of 3 months.
Other supports for Businesses
There are a number of other financial measures available to support businesses:
SME Credit Guarantee scheme The Credit Guarantee Scheme supports loans from €10,000 up to €1 million for a period of 7 years. Applications can be made to participating lenders including AIB, Bank of Ireland and Ulster Bank.
Interest will be charged at the banks SME lending rates. In addition a premium of 0.5% (currently) will be payable by the borrower to partially cover the cost of the government providing the guarantee.
COVID -19 Loans
This is a government initiative to support microenterprises who are or may be impacted by the coronavirus in Ireland. It is available to any microenterprise who is currently trading and is not in a position to avail of bank finance and is experiencing a negative impact on their business of at least 15% of actual or projected turnover or profit.
Loans of up to €50,000 are available on a six month interest free and repayment free moratorium with the loan to be repaid over the remaining 30 months of the 3 year loan period. Interest rates of between 6.8% and 7.8%.
SBCI COVID-19 Working Capital Scheme
This provides loans for viable micro, small and medium sized eligible businesses to assist with working capital requirements or to fund innovation, change or adaptation required to mitigate the impact of COVID-19 due to the crisis. The loans will be available through AIB, Bank of Ireland and Ulster Bank.
Loan amounts of between €25,000 up to €1.5million are available with a maximum interest rate of 4% for periods of 1 to 3 years. No security is required for loans of up to €500,000.
To qualify businesses need to meet certain eligibility criteria – the business must be impacted by the virus resulting in business turnover or profitability being negatively impacted by a minimum of 15% and they must meet one of the innovation criteria.
Whilst every effort has been made by CavanaghKelly to ensure the accuracy of the information here, it cannot be guaranteed and neither CavanaghKelly nor any related entity shall have liability to any person who relies on the information herein. Information given here is for guidance only. Detailed professional advice should be taken before acting on any information contained herein. If having read the guidance here, you would like to discuss further; a member of our team would be pleased to help you.