COVID-19: Emergency Bill Extracts

The recently published Emergency Measures in the Public Interest (Covid-19) Bill 2020, which is expected to be passed this week, contains Income Support Schemes to provide financial support to Irish workers and companies affected by the crisis.

In summary: • A COVID-19 Temporary Wage Subsidy Scheme of 70% of take home pay up to a maximum weekly tax free amount of €410 per week to help affected companies keep paying their employees. This is the equivalent of €500 per week before tax; • workers who have lost their jobs due to the crisis will receive an enhanced emergency Covid-19 Pandemic Unemployment Payment of €350 per week (an increase from €203); • the Covid-19 illness payment will also be increased to €350 per week; • Self-Employed will be eligible for the Covid-19 Pandemic Unemployment Payment of €350 directly from the Department of Employment Affairs and Social Protection (rather than the Revenue scheme); • Amendments to the Redundancy Payments Acts 1967 to 2014 relating to lay-off and short time • Enhanced protections for people facing difficulties with their mortgages, rent or utility bills;

In this briefing, we will focus on just two important elements relating to businesses contained in this bill • Part 7 of the Bill introduces a Temporary Wage Subsidy Scheme • Part 8 makes amendments to the Redundancy Payments Acts 1967 to 2014 relating to lay-off and short time.

Part 7 – Temporary Wage Subsidy Scheme

• Replaces the previous COVID-19 Refund Scheme. • Where those employers are unable to pay normal wages to employees but firmly intend to continue to employ them and are making best efforts to continue to pay them in some form. • In order to demonstrate that a business has been adversely affected, an employer must demonstrate to the satisfaction of the Revenue Commissioners that they will; o be experiencing significant negative economic disruption due to Covid-19 o suffer a minimum of a 25% decline in turnover or in customer orders received o be unable to pay normal wages and normal outgoings fully o retain their employees on the payroll. for the period between 14 March 2020 and 30 June 2020. • The Wage Subsidy Scheme will run for twelve weeks from 26 March 2020. Initially o The Subsidy Scheme will refund employers up to a maximum of €410 per each qualifying employee. From April o The Scheme will move to a subsidy payment based on 70% of the weekly average take home pay for each employee up to a maximum of €410 (i.e. 70% of take home weekly income of €38,000 per annum). o On incomes up to €76,000 or twice average earnings, it will be capped at net €350 for incomes between €38,000 and €76,000. o An employer cannot avail of the Wage Subsidy Scheme in respect of an employee who is paid more than €960 per week.

• The Scheme is confined to employees who were on the employer’s 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. • The Scheme will be available to employers who top up employees’ wages and those that aren’t in a position to do so but Employers should pay no more than the normal take home pay of the employee. • However, the Government is encouraging employers, where possible, to top-up their employees’ wages to maintain normal levels of earnings for the subsidised period. • Employers who wish to register for the Scheme can apply through ROS. • Any employer, already registered with Revenue for the purposes of the Employer COVID-19 Refund Scheme, is not required to take any further action. • Employers make this special support payment to their employees through their normal payroll process. • Employers will then be reimbursed for amounts paid to employees and notified to Revenue via the payroll process. The reimbursement will, in general, be made within two working days after receipt of the payroll submission. • Employers must not operate this scheme for any employee who is claiming a Covid-19 related support from Department of Employment Affairs and Social Protection. Taxation • Employees in receipt of payments under the Wage Subsidy Scheme may be classified in Class J9 for PRSI purposes. • Income tax, USC, LPT, if applicable, and PRSI are not deducted from the Temporary Wage Subsidy. • Employee PRSI will not apply to any top up payment by the employer while Employer’s PRSI will be reduced from 10.5% to 0.5% on such payments. • Employers must specify details of any additional amount paid to employees on payslips provided to employees. Payroll – Operating the scheme from Thursday 26 March 2020 • The employer runs the payroll as normal, entering the following details for each relevant employee under the Scheme: o PRSI Class set to J9. o A non-taxable amount equal to the employee’s net take home pay or €410 whichever is the lesser. o If an employer is not making any payment to the employee, they should include a pay amount of €0.01 in Gross Pay. o If an employer is making additional wage payments to affected employees, they should include this amount in the Gross Pay. o It is important that employers do not include the Temporary Wage Subsidy payment in Gross Pay. o The payroll submission must include pay frequency and period number.

Revenue Disclaimer – if you take part in the scheme is as follows: • In accordance with the legislation governing the Scheme, I declare to the Revenue Commissioners that the business intends to operate the COVID-19: Temporary Wage Subsidy Scheme and I confirm that the business is experiencing significant negative economic disruption due to Covid-19, and can demonstrate, to the satisfaction of Revenue, that the negative disruption is leading to a minimum of 25% decline in actual or predicted turnover, an inability to pay normal wages and outgoings and, to other circumstances as set out in published Revenue Guidelines. • I accept the conditions of the Subsidy Scheme, that (i) the business will retain its employees on its payroll, (ii) any payments made by revenue to the business in excess of 70% of the net weekly pay of each employee will be repaid by the business to Revenue as quickly as possible, or will be offset by Revenue against future payments arising under the Scheme, (iii) any abuse of the scheme that comes to light following a