Our HR Partner Tommy Smyth & Associates has provide the below HR update –
Yesterday afternoon the government announced significant updates to their Income Support Scheme for those out of work and for those businesses operating but who are negatively impacted due to the Covid 19 situation.
We understand that this update will prompt a lot of queries from clients, however, at present we may not have all the answers, and we expect the Government don’t quite yet either! We will pass on what we do know from our discussions with Social Welfare and Revenue officials on behalf of our clients and are available to answer calls from you at any stage.
If you are closed, your employees are laid off and have sent in the yellow, one page, Covid Pandemic Payment form. Social Welfare will now give them €350 a week for the duration of the Pandemic, not just €203 for 6 weeks.
This remains a relatively simple scheme, administered by the Department of Employment Affairs and Social Protection (DEASP). It is flawed, of course, as it appears that part time workers will get the same as full time workers, 2018 PRSI contributions are not relevant to qualify for it and the level of payment makes it attractive for workers to stay home, and safe, instead of applying to work in other areas of the economy where jobs exist. They may also be less enthused to return to work when the employer wants to reopen in a few weeks.
That being said, people will need money in their pockets, and bank account, to allow the economy kick back in properly when this is over. The level of support being provided by the Government is unprecedented.
As we have advised, The Revenue Commissioners have been running an employer rebate scheme for the above €203 (now €350) payment where the employees have not sent a form into DEASP and have not been ‘ceased’ on the employer payroll. That scheme, while only a week old, has now been ceased and is replaced with the Temporary Covid 19 Wage Subsidy Scheme:
Right now from March 26th, it is giving up to a maximum of €410 per week, by virtue of a refund mechanism, to employers who pay employees via payroll whether they are in work or not.
In April, once more details have been figured out and announced, a subsidy of up to 70% of an employee’s net weekly wage capped at €410 per week will be introduced. More specifics on this will be provided by Revenue in due course.
If an employer has already registered for the old flat rebate scheme they do not need to reapply and they, or their payroll agent, will be advised on the details of the new scheme in due course.
To avail of this 12 week subsidy you have to make a self-declaration and be able to demonstrate to the satisfaction of Revenue that you have either lost 25% of your turnover or have cash flow difficulties that make paying your outgoings and wages not possible due to Covid 19 difficulties.
We do have concerns relating to this scheme, given the lack of details from Revenue in relation to their 70% support scheme. The vagueness of how an employer can prove they qualify for it, how quickly rebates will be facilitated through Revenue and the fact that employer names who avail of the scheme are published online may drive employers to keep it simple and let employees go and let them claim the €350 from Social Welfare.
We are continuing to liaise with stakeholders within the Government to raise our concerns and outline potential pitfalls in relation to these Income Support Schemes. We have already been advised that our concerns relating to paying a flat rate of €350 to all employees, which will create the negative impact of employees wanting to stay home (even in a case where their employer can provide work) has been noted and steps to address this anomaly will be taken immediately.
We will continue to update you all as new information is released. In the meantime, the TSA team are available to discuss this recent update with you further.
Head of Commercial