Last night the Dáil passed the Emergency Measures in the Public Interest Bill without a vote and it will now go to the Seanad for consideration today.
KEY FEATURES OF THE EMERGENCY MEASURES BILL INCLUDE:
A statutory basis for the introduction of the Wage Subsidy Scheme.
An amendment to the Redundancy Payments Act 1967 providing for situations where Employees who have been temporarily laid off or kept on short time as result of COVID-19 not being entitled to claim redundancy after 4 weeks on lay off or short time, as would have previously being permitted. Instead Employees will only be able to claim redundancy after the expiry of the 'emergency period', which is laid out in the Bill as May 31, 2020.
Recruitment processes of retired health professionals being simplified and references the re-enlistment of retired defence force members.
Your Questions Answered
A number of questions still remain from the introduction of the Wage Subsidy Scheme and the information provided as of today by Revenue outlines the following for Employers to consider.
1. WHAT IS THE TEMPORARY COVID-19 WAGE SUBSIDY SCHEME?
The Subsidy Scheme provides the payment of income supports to Employers in respect of eligible Employees where the Employer’s business activities have been adversely impacted by the COVID-19 (Coronavirus) pandemic. The Employer will include the subsidy as part of the Employees’ wages in addition to the amount that the Employer would otherwise be able to pay. The Employer will separately identify the subsidy element on the payslip as a payment described as “non-taxable pay”. The subsidy scheme supersedes the Employer Refund Scheme.
2. WHAT ARE THE DIFFERENCES BETWEEN THE SUBSIDY SCHEME AND THE EMPLOYER REFUND SCHEME?
The Subsidy Scheme:
Increases the maximum non-taxable refundable payment up to €410 or 70% of the Employee’s Average Net Weekly Pay (further details available on revenue).
Allows the payment by Employers of additional taxable payments.
3. WHAT ARE THE TWO PHASES TO THE TEMPORARY COVID-19 WAGE SUBSIDY SCHEME?
Phase 1 is a short, transitional phase that builds on the current emergency Employer Refund Scheme (operated since 15 March 2020), under which the Employer received a refund of €203 per week for each Employee that it kept on its books. The Subsidy Scheme will increase the €203 refund to a maximum of €410 in respect of all Employees regardless of whether the Employer makes an additional payment to the Employee’s earnings or not.
In Phase 2, no later than 20 April 2020, the operation of the scheme will ensure that the Subsidy paid to Employers will be based on each individual Employee’s Average Net Weekly Pay, subject to the maximum weekly tax-free amounts.
4. HOW LONG WILL PAYMENTS UNDER THE ENHANCED SCHEME LAST?
The scheme is expected to last a period of 12 weeks.
5. WHAT IS AN ADDITIONAL TAXABLE PAYMENT IN THE TEMPORARY COVID-19 WAGE SUBSIDY SCHEME?
Sometimes referred to as top-up payments, in the transition phase of the Temporary COVID-19 Wage Subsidy Scheme an Employer can choose to make a taxable payment to the Employee to fully or partially make up the 30% difference between the 70% of the Average Net Weekly Pay provided by the subsidy scheme and the Employees normal Average Net Weekly Pay. If the Employer makes an additional payment greater than the 30% difference allowed by the scheme (i.e. the Employee receives more than the Average Net Weekly Pay) then the subsidy value refundable to the Employer will be reduced by this excess amount when the refund reconciliation is being performed.
6. IS AN EMPLOYER REQUIRED TO MAKE AN ADDITIONAL PAYMENT TO THE EMPLOYEE?
The scheme is predicated on the Employer wanting to keep the Employees on the payroll and to retain them for when business picks up. The Employer is expected to make best efforts to maintain as close to 100% of normal income as possible for the duration of the Subsidy period. There is no minimum amount that the Employer must pay in order to be eligible for the scheme, but the Employer will need to enter at least €0.01 to run payroll.
7. CAN THOSE EMPLOYERS WHO ARE SIGNED UP FOR THE CURRENT SCHEME APPLY FOR THE SUBSIDY SCHEME?
Employers who have signed up to the Employer Refund Scheme announced on Sunday 15 March are eligible for the Subsidy scheme. They will not be required to apply for the Subsidy scheme. Instead, Revenue will look to confirm with the Employer that they meet the conditions of the Subsidy scheme by contacting all Employers who applied for the previous scheme to inform them of the new enhanced support arrangements and provide options to transfer to the new subsidy scheme.
8. WHAT ARE THE EMPLOYER ELIGIBILITY REQUIREMENTS ASSOCIATED WITH THE SUBSIDY SCHEME?
The Subsidy Scheme is open to Employers who self-declare to Revenue that they have experienced significant negative economic disruption due to Covid-19 and who are able to show, to the satisfaction of Revenue, 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 soon to be published Revenue Guidelines. Where an Employee was employed on 29 February 2020 and the Employer has included them in their payroll submissions to Revenue in the period 1 February to 15 March 2020, they are eligible for the scheme. The Employer must then register for the Subsidy scheme with Revenue.
9. CAN AN EMPLOYER WHO HAS LAID OFF EMPLOYEES REHIRE THEM AND AVAIL OF THIS SCHEME?
Yes, if an eligible Employer has laid off Employees as a result of COVID-19, they can be taken back onto the payroll and will qualify for the subsidy if they meet the criteria and were on payroll on February 29, 2020 and whose details were returned through to Revenue by 15 February. Please refer to Revenue for further details on this.
10. WHAT IS AN ELIGIBLE EMPLOYEE?
An eligible Employee is someone who their Employer cannot afford to pay fully because of the COVID-19 crisis who is being kept on the books of the Employer. The Employee must be on the payroll as at 29 February 2020 and the Employer has made payroll submissions to Revenue, in respect of the individual, between 1 February 2020 and 15 March 2020. There is not age restriction.
11. IS AN EMPLOYER WHO ALREADY RECEIVED €203 UNDER THE PREVIOUS SCHEME NOW DUE MORE?
The Subsidy scheme is operational only from March 26, 2020 so they will not be due a further refund for amounts received up to that date. Revenue will transfer those Employers who have registered for the Employer Covid-19 Refund scheme across to this new scheme.
12. DOES THIS IMPACT EMPLOYEES’ RIGHTS TO REDUNDANCY PAYMENTS?
Measures are being brought forward by DEASP to suspend the provisions of Section 12 of the Redundancy Payments Act 1967 where an Employee has been temporarily laid off or put on short-term work arising from the Covid-19 emergency measures.
13. WHAT IF MY EMPLOYEE HAS MULTIPLE JOBS WILL THEY GET MULTIPLE PAYMENTS?
If an Employee has multiple employments, each Employer can operate the scheme based on 70% of Employee’s net earnings.
14. WILL EMPLOYERS BE ENTITLED TO THE FULL SUBSIDY AMOUNT UNDER THE TRANSITIONAL ARRANGEMENTS?
If an Employer receives a subsidy payment which is more than they are entitled to, say because the Employee’s “normal” net weekly earnings are less than the Subsidy payment, they will be obliged to refund the monies to Revenue, or Revenue will reduce subsequent Subsidy payments the Employer is due to receive.
15. HOW QUICKLY WILL EMPLOYERS GET THEIR REFUND UNDER THE SUBSIDY SCHEME AND HOW IS IT PAID?
The amounts paid to Employees and notified to Revenue will be transferred into the Employer’s bank account by Revenue. This reimbursement will, in general, be made within two working days after receipt of the payroll submission.
Disclaimer - The information in this section is provided to assist Employers on the implementation of the Government Schemes and must be read in the context of the scheme details from Revenue and should not be interpreted as a legal definition of any of the information provided. The information is changing constantly and any information provided is correct of March 27, 2020 and is per information on the Revenue website as of that date.
FOR FURTHER INFORMATION OR ADVICE, PLEASE CONTACT YOUR DESIGNATED EXPERIENCED HR CLIENT MANAGER IN ADARE HUMAN RESOURCE MANAGEMENT OR INFO@ADAREHRM.IE .