We have summarised below the latest position as regards the Covid-Pandemic Unemployment Payment scheme that was recently introduced by Government to assist those employees who are temporarily laid off and are receiving no other wages payment from the employer or from any other employment.
As you can appreciate with any new scheme or initiative the rules and regulations governing same will move and change on a daily basis. In the main we would recommend that the employee would make the claim for this assistance and then get paid directly by Social Welfare as this is the cleanest and least complicated way to operate the scheme.
If it is the case that an employer opts to pay their employees, the amount of € 203 p/w over the 6 weeks period then we have outlined below how this scheme should be operated by the employer. As noted below this is obviously dependant on the employer being able to cashflow these employee payments as they are awaiting the rebate of same from Revenue.
The new Covid Employer Refund is designed to be a simple scheme to enable employers to pay €203 per week to temporarily laid off staff for a maximum period of 6 weeks. For that reason, it operates as a refund scheme to address the cash-flow constraints in paying staff, and not as an offset against the employer’s tax liability. It is important to note that this is the current position with Revenue but there is no guarantee that this position will be maintained by revenue.
How will the scheme work?
The new Refund Scheme will commence immediately.
What workers are eligible?
Those employees who come within the scheme are;
- Employees who have been working with the employer.
- Have been temporarily laid off and therefore are eligible for the Covid-19 support scheme
- Are between 18-66 years old.
- Were included on a payroll submission made by the employers from 1st February 2020 to 15th March 2020.
- Have not ceased the employee with Revenue; and
- Are receiving no other wage payment from their employers. This includes wage top-ups, overtime, shift allowances, on-call payments so that the only additional payment on the payroll should be wages of €0.01.
Can a business owner be included?
- Anyone who is paid a wage from the business and is on PAYE can be included.
Does this apply to Students?
- Yes. An employer can include workers who are in full time education but were also working.
- These individuals will qualify for the Covid-19 Pandemic Unemployment Payment provided they have lost employment. However, they will not be eligible for either Jobseeker’s Allowance or Jobseeker’s Benefit as they are full time students and are not available for and genuinely seeking full time
What does the worker and employer have to do to participate in the scheme?
- Worker in respect of whom a refund is being claimed should confirm to Employer that they have not and will not claim a Covid-Pandemic Unemployment Payment in cases where the employer is retaining them on the payroll in order to pay €203 per week.
- If the worker normally works part-time only, the worker should confirm with the Employer that they do not have an additional employer.
- Workers who are due a higher payment (e.g. because they have child or adult dependants) should make a claim for standard jobseeker’s benefit online at www.mywelfare.ie. They will be moved onto this higher payment as quickly as possible and the employer will cease paying the €203 to the employee.
- Employers should register for the scheme with Revenue via the Revenue Online System (ROS). Employers, or their agents, apply to Revenue to operate the scheme by carrying out the following steps:
1. Log on to ROS myEnquiries and select the category ‘Employer COVID -19 Refund Scheme’.
2. Read the declaration and press the ‘Submit’ button.
3. Log on to ROS and in ‘Manage bank accounts’, ‘Manage EFT’, ensure that the bank account details provided are correct.
Key features of the scheme:
The employer will make the payroll submission to Revenue on or before each pay date.
Employers should contact their payroll software providers for assistance in respect of payroll to be processed under this scheme.
The employer runs the payroll as normal, entering the following details for each relevant employee:
➢ PRSI Class set to J9
➢ A pay amount of €0.01 (there must be some pay entered for the payroll to run)
➢ A non-taxable amount of €203. No other payment amounts are made by the employer to the employee and all temporarily laid off employees are granted the €203
➢ The payroll submission must include pay frequency and period number.
If the worker is entitled to a higher payment (for example has qualified children), how will they get this money?
- The jobseeker claims received from workers who have adult or child dependents will be prioritised for payment. Once these are put into place payment refunds will cease and the employer can cease making payments. When a decision is made on a claim any outstanding amounts due in respect, for example, of qualified dependants will be awarded to the worker.
What rate of PRSI should be recorded?
- The rate of PRSI to be applied should be J9 as this will help identify those affected more readily for reconciliation and updating as required.
How will the Universal Social Charge be handled?
- The €203 will be recorded as non-taxable income on the payroll.
What if the employer is paying full wages to their team, despite the business being affected by Covid-19? Can they still get a rebate for the €203?
- The Covid Employer Refund Scheme only applies to staff who have actually been let go and would otherwise be claiming a jobseeker’s payment from Intreo i.e. where no wage payment is being made.
Will the payment be made pro-rata for part time employees?
- This is a flat rate payment only. All employees should be paid the €203 rate.
Can the employer pay for a period then advise the employee to go directly to the Department of Employment Affairs and Social Protection?
- Yes – If the employer ends up in a position where they cannot continue the payment of its staff via their payroll, they can advise the worker to apply directly to the Department of Employment Affairs and Social Protection for a jobseeker’s payment.
What about workers who have been paid with the assistance of Department of Employment Affairs and Social Protection Employment Support Schemes?
- This refund Scheme applies to all workers who are temporarily laid-off. However, where the workers were in receipt of a Wage Subsidy Payment, JobPlus Payment, or Youth Employment Support Payment employers should, in these cases, notify the Department of Employment Affairs and Social Protection at YESS@welfare.ie.
What if an employer lays-off some workers but retains others who remain working?
- The workers who are being temporarily being laid off, without any wage payment, should have the €203 recorded as non-pay with a taxable amount of €0.01.
- The workers who are being kept on should have their wages recorded as usual.
Which employers are eligible?
All employers who are able to participate in the Covid Employer Refund Scheme are encouraged to do so, provided they
- Are registered on ROS
- Register for the new Covid Employer Refund scheme
- Are up to date with their payroll returners.
What happens if an employer pays a worker who also claims a payment from the Department of Employment Affairs and Social Protection?
- This should only arise if the worker does not advise the employer that they have made a claim to the Department of Employment Affairs and Social Protection and even in these cases it is expected that the overlap period will be at most one payroll period.
- Employers are encouraged in these cases to adjust future payments by agreement with the workers concerned to recover any overpayment.
How long will this Covid Employer Refund Scheme last?
- The duration of availability of the refund scheme will depend on how the Covid-19 situation evolves. – Any closure of the refund scheme will be communicated in advance.
- Refunds will continue to be made in respect of each worker so long as their employer maintains the payroll payment system and the person themselves are not in receipt of a Covid-19 payment from the State.
- Employers will be notified via the Revenue system when a refund is not being paid and should cease payments to the worker concerned from that point forward.
In summary I have listed below some of the more important points to note from this Refund scheme:
- Employees cannot be receiving any other wage payments from their employer – wage top-ups are not allowed
- A business owner/director can only claim the payment if they are paid a wage from the business and there are on the PAYE system. As with an employee they cannot be paid a salary whilst claiming this payment
- Workers that would be due a higher payment due to having child or adult dependants should make a claim for standard job seekers benefit so that they will be moved onto the higher payment as quickly as possible
- Self Employed Individuals - are entitled to submit the application form for the emergency payment to Social Welfare and receive the payment directly
- No other payments are made by the employer to the employee for the applicable week/s and all temporarily laid off employees receive the €203 per week.
- Income tax, USC and PRSI are not deducted from the €203 payment.
- If full time staff are put on a reduced working week, they are entitled to make a claim for the emergency payment. Social welfare has advised that they are unable to decipher how much of the €203 payment they will receive as this is normally pro-rata against full working week. In this case the employee should make the application for the support payment directly with Social Welfare
- Any Income Tax and USC refunds that arise as a result of the application of tax credits and rate bands can be repaid by the employer and this amount will also be refunded to the employer by Revenue
- The employee must confirm to employer that they have not, and will not, claim a payment from DEASP whilst the employer makes this payment through the payroll.
- Employers will be asked to advise employees with dependents to make a Jobseeker’s Benefit claim via the MyWelfare.ie online portal (so that the employee/s can access qualified dependant payments if appropriate).
Based on the information provided in the payroll submissions, Revenue will credit €203 per employee per week to the employer’s bank account recorded in ROS. The credit will include the reference COVID Employer Refund. (The main identifiers include Employer Number Gross Pay of €0.01, J9 PRSI class, Pay Frequency and Employee PPSN, Employment ID).
- Revenue will credit the employer bank account for payroll submissions received before 2:00 PM each day. Depending on the individual bank, the refund should be with the employer on the next banking day.
If the employee(s) resume employment with the employer, or obtains other supports from DEASP, or secures employment elsewhere, the employer will not include the employee(s) concerned in future submissions.
- For general issues relating to the Scheme, employers should contact Revenue’s National Employer Helpdesk via the myEnquiries system, providing details of the query and a direct dial contact number.
Employers should make sure to select ‘Employer’s PAYE’ and then ‘Employer’s PAYE General Enquiry’ when submitting the query through MyEnquiries
Please do not hesitate to contact us should you have any queries.
Tel: 021 4641400 / firstname.lastname@example.org