Covid-19 Temporary Wage Scheme

E

elacsaplau

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To qualify for the scheme, employers must:
  • be experiencing significant negative economic disruption due to Covid-19
  • be able to demonstrate, to the satisfaction of Revenue, a minimum of a 25% decline in turnover
  • be unable to pay normal wages and normal outgoings fully and
  • retain their employees on the payroll.

The above is per the Revenue's website. My question is if a company is unable to pay wages, does this mean that the company is insolvent and must cease trading as an insolvent company must cease trading?
 
A literal interpretation causes some concern but the spirit of this legislation is to keep employees on the payroll that would otherwise be laid off.

I think it would be reasonable to judge what your position like this:

Without lay offs can you continue to pay your staff?

If not then are you in a position to pay staff and all other outgoings with the benefit of the scheme?

The employer is therefore only keeping on the staff by virtue of the scheme. Assuming it is then able to meet its other liabilities it is not insolvent as it has reduced a large part of its overheads.
 
I'm with Purple - good job he's still here!

Very sloppy drafting which is excusable given the rush. However, not making the simple necessary amendments yesterday - when the error was highlighted - is very poor.
 

The declaration by the employer is not a declaration of insolvency. The declaration is simply a declaration which states that, based on reasonable projections, there will be, as a result of disruption to the business caused or to be caused by the Covid-19 pandemic, a decline of at least 25% in the future turnover of, or customer orders for, the business for the duration of the pandemic and that as a result the employer cannot pay normal wages and outgoings fully but nonetheless wants to retain its employees on the payroll.
 
Can I ask a question on the scheme please. I am monthly payroll and wish to avail of this scheme for my staff. Revenue guidance is :
March monthly employees. For March payroll with pay date between 12 March and 31 March 2020: o Enter a non-taxable amount up to 70% of; four times the employee’s net weekly pay to - a maximum of €812 (€203 x 4). o This is based on a 4-week March, with four weeks at the €203 rate.
So the max that can go into payslip as part of subsidy is €568.40? The payroll system I use (Brightpay) suggests the average figure of last 2 months paid (which is higher than this). And then if I add 30% to €568 its not going to be the average wage I pay someone.
I am probably getting confused just not v clear. Additionally on another note - can pension contributions still be paid or do they have to be held off until over this - I cannot see any guidance on this.
Thanks for help.
 
If an employer has a VAT liability to Revenue but is compliant in terms of payroll submissions etc. and therefore seemingly eligible for the scheme, is there a danger Revenue won’t refund the employer who enters the scheme and will hold the employee refunds against any outstanding VAT liabilities?
 
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