Wednesday, March 25, 2020

THE Government’s announcement of a National COVID-19 Income Support Scheme has resulted in Waterford Chamber receiving a lot of queries.

In response Aidan McAvinue & Co compiled a detailed summary on the various schemes/ supports.

A temporary wage subsidy of 70% of take home pay up to a maximum weekly tax free amount of €410 per week to help affected companies keep paying their employees has been announced. This is the equivalent of €500 per week before tax or 70% of take home weekly income of €38,000 pa.

Workers who have lost their jobs due to the crisis will receive an enhanced emergency COVID-19 Pandemic Unemployment Payment of €350 per week, an increase from €203. The COVID-19 illness payment will also be increased to €350 per week.

Those who are self-employed will be eligible for the COVID-19 Pandemic Unemployment Payment of €350 directly from the Department of Employment Affairs and Social Protection.

The Income Support Scheme will provide support on incomes up to €76,000 or twice average earnings. It will be capped at net €350 for incomes between €38,000 and €76,000.

The employer is expected to make best efforts to maintain as close to 100% of normal income as possible for the subsidised period.

There are no details on the calculation of a 25% fall in turnover. Aidan McAvinue is encouraging all clients significantly impacted not to underestimate the potential impact and to apply for the scheme.

The scheme will be similar to the “€203” payroll scheme announced last week, which involves processing a payroll with the payments as CLASS J9 PRSI with amounts shown as non-taxable pay.

There will be an additional saving of Employee and Employer PRSI as a result, which will apply to all pay even “top up” pay as a payroll period only notes one PRSI class.

The Revenue guidance is light on the income cap issue (€38k – €76k) or how to deal with employees with irregular income e.g. part time with variable hours. The new Scheme will be in place for twelve weeks.

In order to be eligible employers must self-declare to Revenue that they have experienced significant negative economic disruption due to COVID-19, with a minimum of 25% decline in turnover, and an inability to pay normal wages and other outgoings, in accordance with guidance to be issued by Revenue.

In addition to the Scheme being announced, the government has already announced a range of measures including  a €200 million Strategic Banking Corporation of Ireland Working Capital scheme and a €200 million Rescue and Restructuring Scheme available through Enterprise Ireland for vulnerable but viable firms.

The maximum loan available from Microfinance Ireland has been increased from €25,000 to €50,000. Meanwhile, Local Enterprise Offices in every county will be providing vouchers from €2,500 up to €10,000 and a Finance in Focus grant of €7,200 will be available to Enterprise Ireland and Údarás na Gaeltachta clients.

The government has agreed with local authorities that they should defer rates payments due from the most immediately affected businesses, primarily in the retail, hospitality, leisure and childcare sectors, until the end of May.

A number of taxation measures have been introduced to alleviate short-term difficulties.

Chamber CEO Gerald Hurley thanked Aidan McAvinue for compiling the information and stated, “It demonstrates the importance of working together at this time, as one big team, and by doing so we will get through this and be stronger than ever before.”

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