- 12,650 companies already receiving over €5.4 million in support
- Employers with cash in reserve, who have been hit by a significant decline in business, will still qualify for the scheme
Minister for Business, Enterprise and Innovation, Heather Humphreys TD, has again strongly encouraged employers to avail of the Wage Subsidy Scheme, an innovative scheme to support companies to retain employees and to re-employ employees who have recently been laid off due to the COVID-19 pandemic.
The Minister said:
I was delighted to hear the Chairman of the Revenue Commissioners, Niall Cody, confirm earlier today that over 12,650 companies have already applied for the scheme and that over €5.4 million is making its way from Revenue to these companies’ bank accounts.
Indeed, I would echo his call for employers to ensure their bank details are up to date as there is €427,000 worth of support that Revenue cannot transfer to 260 companies because of incorrect bank details.
The Scheme is to support employers to keep their employees on the payroll through the current Covid-related trading difficulties. This will enable employers to quickly recover when business picks up after the pandemic. Under the terms of the Scheme employers will be refunded up to 70% of an employee's wages - up to a level of €410.
The Minister continued:
While we would encourage employers that are in a position to top up wages to do so, we recognise that this may not be possible for all companies.
The Minister pointed to Revenue’s further guidance on the Scheme published yesterday which stated that the declaration by the employer is not a declaration of insolvency and that an employer that has been hit by a significant decline in business but has strong cash reserves will still qualify for the Scheme. Revenue have also said that they will continue to review and update guidelines as appropriate.
Minister Humphreys concluded:
I also note the support of Ibec for this Scheme, describing it as ‘a critical component to ensure the sustainability of our business model. I would again stress that the employer-employee relationship is vital for business and this Scheme ensures that this relationship can be maintained in these trying times. The support will enable companies to retain that employee stability so that they will be ready to return to normality when the worst of this has passed.
Note for Editors:
The Revenue Guidelines clearly state:
An employer that has been hit by a significant decline in business but has strong cash reserves, that are not required to fund debt, will still qualify for the Scheme.
In operating the scheme, Revenue’s priority is to ensure that all employers experiencing significant negative economic disruption from the COVID-19 pandemic can register for and start to receive payment as quickly as possible.
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.
Revenue does not consider that any employer will require professional advice or assistance in being able to prove to the satisfaction of Revenue that these criteria are met. Should Revenue seek to validate employer eligibility for the scheme, it will adopt a reasonable, fair and pragmatic approach in considering whether the criteria have been met.
An eligible employer will be supported by up to 70% of an employee’s take home income up to a maximum weekly tax-free payment of €410 (i.e. 70% of take home weekly income of €38,000 per annum).
The Scheme is confined to employees who were on the employer’s payroll as at 29 February 2020 and full details can be viewed at Revenue Wage Subsidy Scheme.