"I have to let my employees go because business has come to a halt..."

Brendan Burgess

Brendan Burgess

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This is what the Government says

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Employer COVID-19 Refund Scheme

We are encouraging employers to retain employees where possible. To facilitate this the department is setting up a refund scheme for employers which will pay them the €203 per week for each worker who would otherwise have been laid off because a business has to cease trading due to HSE advice on ‘social distancing’. This will mean that workers retain their link with employers and there is no need for them to personally submit a jobseeker's claim.

The department is considering the mechanics of the scheme, in consultation with the Revenue Commissioners. We are looking at suitable approaches so that employers and their payrolls can put it in place relatively easily.


But this is not clear.

If you own a pub and have closed it, you should pay your employees the €203 per week. You will be able to reclaim this from the government.

But what if you own a toy shop? Business has ceased. But you have not been told to close. If you pay your employees €203 a week, will you be able to reclaim it?

I suspect you will.

If business has stopped and you lay off your employees and don't pay them, they can claim the €203 a week anyway.

Brendan
 
There is a document here:


Workers who are laid off temporarily or put on short time working Employees who are laid off temporarily, without
pay, due to a reduction in business activity, can apply for a Jobseeker Payment.

This application can be made online at www.mywelfare.ie or in person at an Intreo centre.

Employees who are put on short-time working by their employer due to a reduction in business activity related to COVID-19 may
apply for a Short-time Work Support payment – information on this is available here. This application can be made in person at an Intreo
Centre.


 
The information is so confusing, that employers are probably better off not paying their workers anything and letting them claim

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Brendan
 
The Department has issued a letter , but here is the essential bit

Q5. If employers retain staff on full pay are they entitled to reclaim a contribution of €203 from the state?

A. Yes where a business has temporarily ceased trading due to the impact of the Covid-19 pandamic and continue to pay staff on full rate of pay they will be entitled to claim the refund at a rate of €203 per employee per week.

Q6. If it transpires that an employee doesn’t have sufficient stamps to claim job seekers allowance will employers have to absorb the non-refundable elements.
A. No, where an employer continues to pay employees they will receive the rate of €203 per employee per week regardless of the outcome of any jobseeker claim. Where a claimant does not have the necessary stamps for Jobseeker's benefit they can apply for Jobseeker's allowance which is a means tested payment. All applications for jobseeker's can be made online.
 
Brendan Burgess said:
continue to pay staff on full rate of pay they will be entitled to claim the refund at a rate of €203 per employee per week.
Click to expand...

This needs to be clarified.

I know a few employers who could not afford to pay the full rate of pay even if is subsidised by €203 per week.

But they would be very happy to act as the paying agent for the government. In other words, they will let their staff go but pay them €203 a week and then recover it.

Brendan
 
Revenue will be organising the refunds. They have issued an e-Brief

Employer COVID-19 Refund Scheme

On 15 March 2020, the Government announced the implementation of exceptional measures, administered through the Department of Employment Affairs and Social Protection (DEASP), to enable workers who are temporarily laid off due to the COVID-19 (Coronavirus) pandemic to claim a special support...
www.revenue.ie www.revenue.ie

Employer COVID-19 Refund Scheme
The amounts paid to employees under the scheme are not subject to tax, USC or PRSI.

Employers are encouraged to facilitate employees by operating the scheme. The amounts paid to employees and notified to Revenue will then be transferred into the employer’s bank account by Revenue. This reimbursement will, in general, be made on a ‘next day’ basis. It will ensure a speedy payment process for employees and minimise the hardship for employees who are temporarily laid off. Refunds of income tax or USC that an employee may be entitled to because of being laid off will also be administered by the employer, and will be repaid (to the employer) through the scheme.

The scheme can be operated for all employees for whom a payroll submission was made by the employer in the period from 1 February 2020 to 15 March 2020. Where employees have already been laid off and their employer has ceased their employment, they can apply directly to DEASP for the payment.

Who does the scheme apply to?
  • Employers who have temporarily laid off staff as a result of the impact on their business of the COVID-19 (Coronavirus) pandemic
  • Employers that keep their staff on payroll and have not ceased the employee(s) with Revenue
  • Employees for whom a payroll submission was made by the employer in the period from 1 February 2020 to 15 March 2020
  • Employers that are unable to make top-up payments over and above the emergency payment of €203 per week.
Making an application for the Refund Scheme
Employers, or their agents, apply to Revenue to operate the scheme by carrying out the following steps:

  • Log on to ROS myEnquiries and select the category ‘Employer COVID -19 Refund Scheme’.
  • Read the declaration and press the ‘Submit’ button.
  • Log on to ROS and in ‘Manage bank accounts’, ‘Manage EFT’, ensure that the bank account details provided are correct.
Key features of the scheme
The employer will make the payroll submission to Revenue on or before each pay date.

Employers should contact their payroll software providers for assistance in respect of payroll to be processed under this scheme.

The employer runs the payroll as normal, entering the following details for each relevant employee:

  • PRSI Class set to J9
  • A pay amount of €0.01 (there must be some pay entered for the payroll to run)
  • A non-taxable amount of €203. No other payment amounts are made by the employer to the employee and all temporarily laid off employees are granted the €203
  • The payroll submission must include pay frequency and period number.
No other payments are made by the employer to the employee for the applicable week(s) and all temporarily laid off employees receive the €203 per week.

Income tax, USC and PRSI are not deducted from the €203 payment.

Any Income Tax and USC refunds that arise as a result of the application of tax credits and rate bands can be repaid by the employer and this amount will also be refunded to the employer.

The employee must confirm to the employer that they have not, and will not, claim a payment from DEASP whilst the employer makes this payment through the payroll.

Employers will be asked to advise employees to make a Jobseeker’s Benefit claim via the MyWelfare.ie online portal (so that the employee(s) can access qualified dependant payments if appropriate).

Based on the information provided in payroll submissions, Revenue will credit €203 per employee per week to the employer’s bank account recorded in ROS. The credit will include the reference COVID Employer Refund. (The main identifiers include Employer Number Gross Pay of €0.01, J9 PRSI class, Pay Frequency and Employee PPSN, Employment ID).

Revenue will credit the employer bank account for payroll submissions received before 2:00 PM each day. Depending on the individual bank, the refund should be with the employer on the next banking day.

If the employee(s) resume employment with the employer, or obtains other supports from DEASP, or secures employment elsewhere, the employer will not include the employee(s) concerned in future submissions.
 
Hi Brendan - I have a nanny who works in our home but I have no work for her at the moment as I am working from home, the kids have no school or activities etc and also I am uncomfortable with an 'external' person coming in and out of our home every day when I am trying to keep us all 'cocooned'. I would like to keep paying her so in this scenario can I pay her the normal weekly salary and claim €203 of it back from Revenue? I would really like to keep her 'whole' but cannot be paying a full salary when she is not working. thanks
 
Bridget said:
can I pay her the normal weekly salary and claim €203 of it back from Revenue? I
Click to expand...

As of now, if you top up a person's wages, then you can't claim anything.

however, I expect this to change.

But the highest priority is your health and you should tell her this and come to some arrangement with her.

Get to apply for the €203.

Brendan
 
Hi Brendan,
I'm an employer and have 2 employees and myself on the payroll. Employee A earned net of 300 euro so I'm assuming she should apply directly to welfare and I make her temporarily unemployed? Then she gets her 350 euro? Is that legal though as she would be gaining 50 euro in practice?
Then secondly, for the other employee and myself, should we both do the same now? Or should we do it through this wage subsidy scheme? If we use the subsidy scheme I could pay him and myself 350 euro (normally both get 650 net) and then top it up and bring him to work if we have orders.
But I've heard talk of insolvency declarations and Revenue penalties and all sorts from using this subsidy scheme (from an economist on RTE radio this morning) so assuming I will have little work to offer soon anyway should we all just go through welfare for the 350 euro?
And lastly, if we do that, am I right in thinking its then technically a welfare application for us all and then the company doesnt pay any wages through ROS? Or do we still pay each employee and claim a refund for these payments?
I'm absolutely lost so any help would be so good, thanks.
 
It looks like the Wage Subsidy Scheme in operation from today (Mar 26th) is somewhat different from the original one last week. In the original case, the employee stood to get the same whether they stayed with the employer or not - €203. However, with this current scheme, as far as I can make out, if their average net pay was less than €500 they would better off being laid off completely and claiming the Covid-19 Unemployment Payment, for which they get €350 (as 70% of €500 is €350, so anything less and they get less). That's my reading of it anyway, but is that correct? I have wages to pay tomorrow (and no cash to pay) and have been telling our employees (none of whom have worked for the past two weeks) to hang on and not apply to the Covid-19 Unemployment Payment.
 
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