COVID-19 Wage Subsidy Scheme - 30 March 2020

Mar 30, 2020

The COVID19 legislation provides for the operation of a Wage Subsidy Scheme for employers (section 28 of the Bill as passed by Dáil Éireann).  It has emerged that businesses with significant cash reserves will not necessarily be disqualified from the scheme.

During Dáil debates on the legislation the Minister for Finance addressed some of the deputies’ points on employers’ eligibility for the scheme.  Responding to Deputy Michael McGrath’s comments on businesses having cash for operating expenses and investments the Minister said “Deputy Michael McGrath presents the concept that the presence of cash reserves would in some way debar a company from participating in the scheme. I do not believe that will be the case. I think it is very possible that companies will have cash reserves, precisely for the reason the Deputy refers to, that they have costs coming up that they know they need to meet.”  

Per Revenue guidance, eligibility for the Scheme will initially be determined largely on the basis of self-assessment and a declaration by the employer concerned.  A key indicator is that there is to be an expected decrease in turnover by 25 per cent for Quarter 2, 2020.  This decrease can be gauged by reference to Quarter 1 2020 for example, or against another reasonable reference period.    

The Institute recommends that employers maintain any supporting records which clearly show the negative economic impact to their business arising from COVID-19.  This will simplify the handling of any follow up discussions or checks by Revenue post the crisis.  Examples of the types of documentary evidence are set out in the Revenue guidance.   

There has been some commentary regarding the publishing of the names of employers availing of the scheme.  We understand that some businesses may have reservations about this.  However almost every business in the country is affected by the COVID-19 crisis, the list will be published after (and not during) the scheme, and there is precedent for companies which benefit from tax administered schemes such as the EIIS to feature on lists of beneficiaries. 

We gather that many Revenue phone services are to be closed for the crisis period but the National Employer Helpline (01 7383638) is being maintained to deal with queries on the COVID-19 Wage Subsidy Scheme.   

Read Revenue’s guidance here and Revenue’s FAQ document may be useful. Revenue’s other information and advice for taxpayers and agents is available here

We will continue to advise all members using the appropriate communication channels as soon as further clarifications and updates are received.