Covid-19: Irish Business Support Mechanisms

The Employment Wage Subsidy Scheme ("EWSS") replaced the Temporary Wage Subsidy Scheme from 1 September 2020 and is expected to continue until 31 March 2021.

The subsidy amount paid will depend on the gross income of each employee.

Between pay dates 20 October 2020 to 31 January 2021, for every qualifying employee paid:

• between €400 and €1,462 gross per week, the subsidy is €350;
• between €300 and €399.99 per week, the subsidy is €300;
• between €203 and €299.99 gross per week, the subsidy is €250; and
• between €151.50 and €202.99 gross per week, the subsidy is €203.

No subsidy is paid for employees paid less than €151.50 or more than €1,462 gross per week. 

To be eligible for the scheme employers must ensure that they have tax clearance from Revenue. As well as having tax clearance, an employers' business must be able to demonstrate that their business is expected to experience a 30% reduction in turnover or customer orders between 1 July and 31 December 2020 as a result of the Covid-19 pandemic. The reduction is compared to the same period in 2019 where the business was in existence prior to 1 July 2019; the date of commencement to 31 December 2019, where the business commenced trading between 1 July and 1 November 2019; or the projected turnover or customer orders for 1 July to 31 December 2020, where a business commenced trading after 1 November 2019.

From 1 January 2021, the period to be reviewed to determine eligibility will be 1 January to 30 June 2021. For this period, the reduction will be compared to the same period in 2019 where the business operated for the whole of the comparable period in 2019; the period from the date of commencement to 30 June 2019, where the business commenced trading between 1 January and 1 May 2019; or the projected turnover or customer orders from 1 January 2021, or date of commencement, to 30 June 2021, where a business commenced trading after 1 May 2019.

Employers are required to undertake monthly reviews (except for the month of July 2020 and the final month of the EWSS) to ensure they are still eligible. Employers must also retain evidence of appropriate documentation, including copies of projections to demonstrate continued eligibility over the specified period.

Employers or their authorised payroll agent can register for the EWSS through Revenue Online Service (ROS).

Applications will only be processed if the employer:

• is registered for Employer PAYE and PRSI;
• has a bank account linked to that registration; and
• has tax clearance.

The Employment Wage Subsidy Scheme

Ireland's Employment Wage Subsidy

The COVID-19 Pandemic Unemployment Payment is available from the DEASP for employees and the self-employed who have lost their job on or after 13 March 2020 due to the COVID-19 pandemic. New applications will be accepted until 31 March 2021.

This payment will be in place until 1 April 2021. From 16 October 2020 until 31 March 2021 the COVID-19 Pandemic Unemployment Payment will be paid at 4 rates:

• for those whose prior earnings were €400 per week or more, the rate is €350 per week;
• for those whose prior earnings were between €300 and €399.99 per week, the rate is €300 per week;
• for those whose prior earnings were between €200 and €299.99 per week, the rate is €250 per week; and
• for those whose prior earnings were less than €200 per week, the rate is €203 per week. 

To be eligible an employee must: be aged between 18-66 years old; currently living in the Republic of Ireland (ROI); have worked in ROI or were a cross border frontier worker; not be in receipt of any employment income; be genuinely seeking work; and have either lost their job due to the COVID-19 pandemic; or have been temporarily laid off due to the COVID-19 pandemic. 

The payment also applies to the self-employed, non EU/EEA workers, those living in Direct Provision, students and part-time workers.

Apply online at mywelfare.ie or download an application form and return it by post; or by calling the DEASP for an application form and returning it by post.

COVID-19 Pandemic Unemployment Payment

Ireland changes rates of Pandemic Unemployment Payment

The Government has agreed with local authorities that, with limited exceptions, all businesses will be granted a waiver of commercial rates to 31 December 2020 and further relief will apply for affected sectors for the first three months of 2021. This measure will be implemented by each local authority in its own area.

The contact details for Dublin City Council's rates office are here, for example. A list of all local authorities in Ireland can be found here.

A six-month reduction in the standard rate of Value-Added Tax (VAT) from 23% to 21% will apply effective from 1 September 2020.

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The Covid-19 Credit Guarantee Scheme will facilitate up to €2 billion in lending to eligible businesses. The scheme offers a partial Government guarantee (currently 80%) to participating banks against losses on qualifying finance agreements (between €10,000 and €1m) to eligible SMEs, small Mid-Caps and primary producers impacted by COVID-19 related issues. The scheme is currently scheduled to remain in place until 30 June 2021.

Approach a participating lender (currently, Ulster Bank, Bank of Ireland and AIB).

Microfinance Ireland are offering Covid-19 Business Loans (ranging from €5,000 to €25,000) with zero repayments and zero interest for the first six months. The Government will rebate to you the interest paid between months 7-12 of the loan. The interest rate after the first 6 months will be a reduced interest rate 4.5% APR if submitted through the Local Enterprise Office Network (or other referral partners) or 5.5% APR if you apply directly to Microfinance Ireland. The loan terms are typically up to 3 years and there are no fees or charges.

To be eligible to apply for a Covid-19 Business Loan the business must have fewer than 10 full-time employees, less than €2m annual turnover and a balance sheet with Net Worth/Capital Account/Equity that does not exceed €2m. The business must also be unable to get finance from other commercial lending providers and be negatively impacted by Covid-19 by a minimum of 15% of turnover or profits.

The Strategic Banking Corporation of Ireland (SBCI) COVID-19 Working Capital Scheme is aimed at providing eligible SMEs with loans of €25,000 to €1.5m with a fixed interest rate of no more than 4% for the term of the loan. The total funding on offer has been increased to €450m.

SMEs that:

1. have fewer than 250 employees;
2. have turnover of < €50m;
3. are part of a wider group;
4. have < 25% capital held by public bodies; and
5. are established and operating in the Republic of Ireland.

Exclusions include those SMEs prohibited by EU state aid rules, such as SMEs in the primary agriculture and/or aquaculture sector.

Small Mid-Cap enterprises are also eligible.

The SBCI website

Revenue guidance on reporting and filing obligations.

Revenue guidance for business with cash-flow issues. 

The Government has stated its position that it believes businesses that have insurance cover for pandemics and Government-ordered closure should be covered by the announcements that the Government has made on the subject of social distancing and Government recommended closure (as opposed to Government ordered closure).

The Central Bank of Ireland ("CBI") has issued a letter to the CEOs of insurance undertakings setting out its expectations of insurers in light of COVID-19. The CBI has indicated that where there is a grey area in terms of a policyholders' ability to recover on account of COVID-19 then the claim should be settled in favour of the policyholder.

On 5 August 2020 the CBI published its COVID-19 and Business Interruption Insurance Supervisory Framework (the "Supervisory Framework") setting out the CBI's expectations of Irish regulated financial service providers ("RFSPs") in terms of how they address COVID-19-related Business Interruption claims. Where customers have an entitlement to claim under a business interruption insurance policy, the CBI expects that claims will be processed and paid promptly and fully. Where cover and related issues are disputed, the Central Bank expects firms to pay the reasonable costs of customer plaintiffs in agreed test case litigation.

There is a lot of commentary in Ireland about the ability of policyholders to recover on account of COVID-19 (particularly in respect of business interruption policies). Businesses are encouraged to check the terms and conditions of their specific policy and contact their providers.

On 30 September 2020, the payment break introduced in March 2020 by the Irish domestic banks, main retail credit firms and credit servicing firms for customers directly impacted by the fallout from the Covid-19 pandemic came to an end. The scheme stopped accepting new applications from this date.

Personal and business customers had been granted a payment break initially for three months, but that was extended for a further three months due to the severity of the economic situation.

From 30 September 2020, lenders will ensure customers who have difficulties at the end of the payment break will be supported with a range of options so that a suitable arrangement can be agreed. This will be done on a case-by-case basis with other options also being made available; reduced payments and interest-only, for example.

The European Banking Authority (EBA) said the breaks had proven effective, but it does not consider adequate at this stage the further extension of such an exceptional measure.

The BPFI has produced “A Guide to coming off the COVID-19 Mortgage Payment Break”. A BPFI campaign paymentbreak.ie is aimed at encouraging consumers to engage actively with their lender if they face continued financial difficulties.

The Central Bank of Ireland have encouraged lenders to engage with Borrowers still experiencing difficulty making payments due to Covid 19.

The CRO announced in October 2020 that services will continue as normal during level 5 restrictions. The Registrar had announced in March that signature pages for Annual Returns and accounts due from 19 March 2020, which need to be physically delivered, would be treated as received on time if received on or before close of business on 30 June 2020. Following a review of the situation, the Registrar decided to extend this arrangement for a further period until 31 October 2020.

The filing deadline for companies with an Annual Return Date falling on 30 September 2020 or later has been extended to 28 May 2021. This extension does not apply to companies with earlier Annual Return Dates.

The CRO recognises that companies that have availed of the provisions of Section 6 of the Companies (Miscellaneous Provisions) (Covid-19) Act 2020, which allowed companies to opt to hold their 2020 AGM up to and including 31 December 2020, may not have been in a position to file their Annual Return until after the AGM was held. The extended 28 May 2021 deadline for filing will apply to companies in these circumstances, however, companies must first notify the CRO in writing in order to avail of this additional time.

Further details can be found on the CRO website.

The CRO is also issuing regular updates through its Twitter and LinkedIn pages.