Covid-19 Temporary Wage Subsidy Scheme Amendments Explained
On the initial set up of the scheme the criteria may have meant that not all employees qualified to enter the scheme determined by bands set out below:
Less than €586 per week – 70% subsidy of up to €410 per week
Over €586-€960 per week – Subsidy capped at €350 per week
Over €960 per week - Did not qualify
To immediately address the employees in the highest band the following measure took effect form 16th April 2020:
0ver €960 per week - if your average weekly nett pay was above €960, you can qualify for a subsidy of up to €350 per week if you have lost more than 60% of your earnings.
Amendments effective 4th May 2020
Under the updated scheme these bands will be amended with new additions as set out below:
Less that €412 per week – 85% subsidy (Increased from 70%)
Between €412-€500 per week - €350 capped per week
Between €500-€586 per week – remains at 70% subsidy
Over €586-€960 per week – Tiered system applies:
- Flat rate subsidy of €350 per week if employer is topping up to 60% of employees previous weekly nett pay
- Flat rate subsidy of €205 per week if employer is topping up between
60% -80% of employees previous weekly nett pay
- No subsidy is payable if employer is topping up above 80% of employees previous weekly nett pay
Over €960 per week – Employee’s whose average take home pay has fallen below €960 can now avail of the scheme, subject to the tapering rules (see above).
No subsidy applies for employee’s whose current pay is more than €960. This is the case regardless of the level of any reduction in pay.
Considerations before applying for the scheme
To qualify for the scheme, you must:
Make a declaration to Revenue and you need to show a minimum of a 25% loss of turnover due to COVID-19 specifically
This reduction is to be determined by the employer and may be based on:
- Decline in orders in March 2020 compared to February 2020.
- Likely turnover of Q2 2020 compared to Q1 2020.
- Likely turnover of Q2 2020 compared to Q2 2019.
- Any other basis that is reasonable and outlined comprehensively by the Employer.
- Another determining factor could be that the business is unable to meet its usual wage bill.
- Keep your employees on your payroll.
- Any reserve cash should be used for this if it is at all possible as it could lead to these payments being refunded after the emergency period if this is not considered properly.
- Employees must have been on your payroll on 29 February 2020, and have had a payroll submission made on their behalf to Revenue in the period from 1st February 2020 to 15thMarch 2020.
- Your declaration is not a declaration of insolvency. It is simply a declaration that the COVID-19 pandemic has caused disruption to your business.
- The COVID-19 Wage Subsidy Scheme applies both to employers that top up employees’ wages and those that are not in a position to do so.