In response to the pandemic the government has introduced several emergency measures to assist businesses, employers and employees.
In addition to the income supports set out below the following measures have been out in place to help alleviate the effect of the pandemic on businesses:
- The Revenue Commissioners have advised taxpayers to continue to make all tax submissions to their office as normal and to pay resulting liabilities, however they have advised that where payments of VAT for January/February and March/April and PAYE for February/March/April 2020 are not paid in a timely fashion the collection of interest will be suspended. These special arrangements are likely to be extended into subsequent periods where the crisis continues.
- All debt enforcement by the Revenue Commissioners have also been suspended, while all current tax clearance certificates will remain valid.
- Collection of LPT for 2020 for those who opted to pay by annual debit which was due on 21st March 2020 has been deferred to 21st May 2020.
- The Companies Registrations Office (CRO) have advised that all Returns due from now until the 30th June will be deemed to be filed on time if filed by 30th June 2020.
- Commercial rates are being deferred for business immediately impacted by the crisis, primarily for those affected in retail, hospitality, leisure and childcare.
In addition to the current government support for short time working arrangements the government have introduced the following specific supports for employers and employees with immediate effect:
Temporary Wage Subsidy Scheme:
Up to 4th May – Transitional Phase
A subsidy of up to 70% of employees’ net take home pay (subject to the limits set out below) has been introduced by the government in order to help maintain incomes for employees during the crisis, where employers have been significantly impacted by the pandemic. Employers will need to ensure that they meet all of the relevant conditions to qualify for the scheme as set out by the Revenue Commissioners.
The scheme is confined to employees who were on the employer’s payroll on the 29th February 2020, and for whom a payroll submission has already been made to Revenue in the period from 1st February 2020 to 15th March 2020, while employees who were laid off after the 29th February 2020 can be re-hired for the purposes of the scheme.
The subsidy amount will be determined in line with the employee’s average net weekly pay for January and February 2020 and where the weekly average pay is:
- less than €586 then the state will pay a subsidy of 70% of this weekly amount.
- between €586 and €960 then the state will pay a subsidy of €350.
- more than €960 the subsidy will not currently apply.
The subsidy amounts are paid to employees without the imposition of PAYE or USC (although Revenue have advised they will be taxed directly on employees at a later date) and employers can make top-up payments to employees of the difference between average weekly pay and the subsidy amount. Such top-ups will be included as normal gross pay. A special rate of rate PRSI has been introduced for the scheme where employee’s PRSI will not apply and a reduced rate of 0.5% will apply to employer top-up amounts.
On 15 April 2020 The Minister of Finance announced further changes to the scheme. These changes will be effective from 4 May 2020.
Rates of subsidy from 4 May 2020 – Operational Phase
Employees previously earning up to €586 net per week
- An 85% subsidy shall be payable in the case of employees whose previous average net weekly pay does not exceed €412.
- A flat rate subsidy of up to €350 shall be payable in the case of employees whose previous average net weekly pay is more than €412 but not more than €500.
- A 70% subsidy shall be payable in the case of employees whose previous average net weekly pay is more than €500 but not more than €586, with the maximum cap of €410 applying.
Employees previously earning in excess of €586 net per week
- For employees whose average net weekly pay is greater than €586 per week but not more than €960 per week, the temporary wage subsidy shall not exceed €350 per week, and shall be calculated with reference to the gross salary paid by the employer and its effect on net average wages as follows:
- A subsidy of €350 shall be payable to employees with average net weekly pay greater than €586, where the employer pays sufficient gross salary which equates to an amount up to 60% of the employee’s net weekly earnings (Tier 1);
- A subsidy of €205 shall be payable to employees with average net weekly pay greater than €586, where the employer pays sufficient gross salary which equates to an amount that is more than 60% but not more than 80% of the employee’s net weekly earnings (Tier 2);
- No subsidy shall be payable to employees with average net weekly pay greater than €586, where the employer pays sufficient gross salary which equates to an amount that is more than 80% of the employee’s net weekly earnings (Tier 3). J9 PRSI class should not be applied.
The new arrangements also mean that the wage subsidy is available to support employees where their pre-Covid salary was greater than €76,000, and their post-Covid salary has fallen below €76,000, subject to the tiering and tapering rules.
Where the employee’s current gross pay, as reported in the payroll submission, represents:
– not more than 60% of the ARNWP, a subsidy of up to €350 is applicable (Tier 1).
– more than 60% and not more than 80% of the ARNWP, a subsidy of €205 is applicable (Tier 2).
– more than 80% of the ARNWP, no subsidy is payable and J9 PRSI class should not be applied (Tier 3).
For such employees, the maximum additional gross payment an employer can make, to receive the full subsidy,
is the difference between €960 and their maximum weekly wage subsidy.
Tapering of the subsidy shall apply to all cases where the gross pay paid by the employer plus the subsidy amount exceeds the previous average net weekly pay. This is calculated by subtracting the gross pay paid by the employer from the previous average net weekly pay and ensures that no employee would be better off under the Scheme. The single exception to tapering is where an employer wishes to pay an employer contribution which when added to the wage subsidy for the employee does not exceed €350 per week. In such cases, tapering of the temporary wage subsidy shall not be applied.
From 4th May Revenue will supply a CSV file showing the wage subsidy amount that can be claimed for each employee that it applies to. Where an employee has more than 2 employments, Revenue are splitting the subsidy pro rata their net pay from each employment.
See Revenue guidance for full details of the scheme.
Pandemic Unemployment Payment:
The scheme is operated by the Department of Employment Affairs and Social Protection (DEASP) and provides for a payment of €350 per week to employees/self-employed individuals aged between 16 and 66 years who have lost their jobs/income as a result of the pandemic. Self-employed individuals are required to have ceased trading. Complete details relating to the scheme can be accessed here.
Other measures and supports – FINANCE
SBCI Covid 19 Working Capital scheme
The SBCI Covid-19 Working Capital Scheme is offered in partnership with a number of Government Departments. The loans will be available through AIB, Bank of Ireland and Ulster Bank. Approval of loans are subject to the banks own credit policies and procedures. Businesses cannot complete a loan application until they have received their eligibility letter from the SBCI.
Loan amounts of between €25,000 to €1.5m per eligible enterprise at a rate of 4% for a term of 1 to 3 years with amount and term dependent on loan purpose.
No Security required up to €500,000 and an optional 3-month interest-only repayments at beginning may be available.
Loan can be used for:
- Future working capital requirements.
- To fund innovation, change or adaptation of the business to mitigate the impact of Covid-19.
Loans cannot be used for:
- Refinance of undertakings in financial difficulties.
- Refinance of existing debt (e.g. Terms Loans/Leases/Hire Purchase etc.
Eligibility Criteria, Covid-19 Criterion, application process and more detailed information can be found at https://sbci.gov.ie/schemes/covid-19-loan-application
Microfinance Ireland Loans
Loans of between €5,000 to €50,000 are available form Microfinance Ireland, a government initiative to support small businesses through the current period of uncertainty and protect jobs. Details can be found at https://microfinanceireland.ie/loan-packages/covid19/
Enterprise Ireland and Local Enterprise Office
Various supports are also available from Enterprise Ireland and the Local Enterprise Office. https://www.enterprise-ireland.com/en/About-Us/Services/Covid-19/Supports
Proposals under consideration for support for bank borrowers
These proposals include:
- flexible arrangements, including a payment break for mortgages and other loans. Customers affected by COVID-19 must contact their bank to discuss the flexibility available to them, including the possibility of a payment break of up to 3 months.
- support for buy-to-let bank customers with tenants affected by COVID 19 – customers with rental property in which the tenants are adversely impacted by COVID-19 will also be provided with flexibility including with an opportunity to seek a payment break of up to 3 months, which will allow them to exercise due levels of forbearance to their tenants.
- extensive supports for SME customers – banks are working to ensure a wide range of credit, cash flow and supply chain supports are offered to businesses who are trying to manage the pressures arising from COVID-19. A deferral of up to 3-months on loan repayments will be of assistance to many businesses.
Central Bank of Ireland sets out Expectations of Insurers in Light of COVID-19 Emergency
- Insurers must put forward consumer-focused solutions on policy payment breaks, rebates and claims.
- While most insurance policies are clear, if there is a doubt about the meaning of a term, the interpretation most favourable to the consumer should prevail.
- The Central Bank expects the CEOs of Irish authorised firms to take responsibility for the oversight of how their firm is managing determinations of whether claims are covered or not in the context of COVID-19.
Notice re COVID-19 – contacting DGL
In accordance with the latest advice from the Government and the public health authorities, our office is closed to the public until further notice. However, we are continuing to work remotely as normal and will hopefully avoid disruption to our services as much as possible. Our office phone lines remain open and if you wish to speak to us, please phone 091-381300 or you can contact us by email. If you’re having difficulty contacting a specific staff member, please send an email to email@example.com.