There was much criticism of the Covid-19 Pandemic Unemployment Support measures which were launched last week by government. A lot of people had compared it to the support schemes launched in both the UK, France and Italy and it was felt that the Irish Government had not gone far enough to support both employees and employers during this crisis.
Following on from this criticism the government have agreed a new support package for both employees and employers. We have outlined below the changes to the supports agreed for those impacted by the Covid19 crisis:
Changes to the support payment to those temporarily laid off due to Covid19
The Government is to increase the Covid-19 Pandemic Unemployment Support payment for people who have been laid-off due to the virus from €203 per week to €350.
The payment will also apply to the self-employed affected by the virus.
However, people who are already unemployed due to reasons other than Covid-19 will remain on the usual Jobseekers' Benefit of €203.
Changes to the Employers Refund Scheme
The cabinet has also approved an emergency wage subsidy scheme based on the follow thresholds:
- The Government will pay 70% of a worker’s salary up to a cap of €410 per week net - equivalent to the after-tax income of a worker on around €38,000.
- Workers earning between €38,000 and €76,000 will be entitled to assistance capped at €350 p/w,
- Workers earning above €76,000 will be excluded from the scheme.
Potential for Redundancy Funding Crisis Averted…For now
It was feared that the entitlement of workers on lay-off to demand redundancy payments after four weeks without work in certain circumstance could lead to a flood of redundancy claims, payment of which could have driven some businesses to collapse.
In that instance, the state would have picked up the responsibility to pay statutory redundancy of 2 weeks wages per year of service capped at €600 per week, on the basis that the company/business was not in a position to make this payment due to the failure of their business.
Term and Cost of the Scheme
The scheme costing an estimated €4 billion will initially run for 12 weeks, and employers will be free to top-up the government's element of the salary subsidy.
The scheme is targeted at companies hit by the collapse of economic activity triggered by Covid-19 and employers seeking to avail of it would have to demonstrate a reduction in income of at least 25%, along with cash flow difficulties.
It is expected that this scheme will be administered by the Revenue Commissioners, and there will be control checks. This would be easy for Revenue to monitor given the real time data they receive on employees pay due to the changes implemented as part of the Paye modernization regime which was launched in January 2019.
The relevant forms, applications, terms and conditions of the new scheme still need to be published but Government have indicated that they are hoping to have the revised scheme up and running by next week.
We will issue a further update on the specifics of the scheme once this has been issued by the relevant departments.
Please do not hesitate to contact us should you have any queries.
Tel: 021 4641400 / email@example.com
This is a link to previous articles we have published on this topic for reference purposes
Covid19 Update: Employers Perspective - Operating the New Covid Employee Refund Scheme
Social Welfare Update: Covid-19 Unemployment Income Supports and Forms