Global menu

Our global pages


Coronavirus - COVID-19 Wage Subsidy Scheme - Ireland

  • Ireland
  • General


We will update this guide in response to the gradual publication of official information by public authorities. Latest update: 3 April 2020, 17:30.

Following increased pressure on the Government to intensify support to businesses affected by the economic fall-out from the COVID-19 crisis, a new scheme has been introduced to provide support to certain employers to enable them continuing to pay their employees during the crisis period.

The COVID-19 Wage Subsidy scheme (the “Scheme”) aims to maintain the viability of businesses, jobs and incomes and the link between employers and employees during the period of business disruption.  

The Scheme replaces the ‘Temporary Refund Scheme’ which had been introduced to assist employers in paying employees who had been temporarily laid off as a result of the COVID-19 crisis. The Temporary Refund Scheme will no longer operate.

Legislation was signed into law on 27 March 2020 to give effect to the Scheme (as well as other measures), entitled the Emergency Measures in the Public Interest (Covid-19) Act 2020 (the “Act”). The Act also amends the position regarding the entitlement of employees on short-time or lay-off to claim redundancy.

Based on the current Government and Revenue guidance and the Act, we have prepared the following FAQs. The FAQs represent our understanding of the position as at 3 April 2020. Matters are, however, evolving on a daily basis.


Who does the Scheme apply to?

The Scheme applies to employers whose businesses are experiencing significant negative economic disruption due to the COVID-19 crisis to the extent that the employer is unable to pay its employees their normal salary.

According to Revenue guidance, the Scheme is available for employers who retain staff on payroll, including staff on full-time and reduced hours, rehired staff who were temporarily laid off but still on payroll.

An employer must have the firm intention of continuing to employ the relevant employee and continuing to pay them, and they must also be making their best effort to pay the employee in order for it to be eligible.

What is meant by “significant negative economic disruption”?

Employers must demonstrate to Revenue that, in the period of 14 March to 30 June 2020, there will be at least a 25% reduction in either:

  • the turnover of the employer’s business; or
  • customer orders received.

Employers must be able to show the reduction is as a result of the COVID-19 crisis and the consequent disruption to commerce.

Revenue has stated that, in general, this will be readily apparent – employers in certain sectors will close or be impacted due to public health advice in terms of restrictions on trade, physical distancing and the nature of essential and non-essential businesses.

Revenue guidance states that the key indicators of employers experiencing significant negative economic disruption are:

a)    the employer’s turnover is likely to decrease by 25% for Quarter 2 of 2020;

b)    the employer is unable to meet normal wages or normal outputs; and

c)    any other indicators as set out in Revenue guidelines.

 How can an employer know that its turnover will decrease by 25%?

An employer does not have to guarantee that the turnover will decrease by 25%. Rather, there must be a likely reduction in expected turnover. The employer can base this judgement on:

a)    a decline in orders in March 2020 as compared to February 2020;

b)    the likely turnover for Q2, 2020 as compared to Q1, 2020; or

c)    the likely turnover for Q2, 2020 as compared to Q2, 2019; or

d)    any other basis that it reasonable.

Does the employer have to be insolvent to avail of the Scheme?

Revenue has confirmed that the declaration by the employer is not a declaration of insolvency. It is simply a declaration that, based on reasonable projections, there will be, as a result of disruption to the business caused or to be caused by the COVID-19 pandemic, a decline of at least 25% in the future turnover of, or customer orders for, the business for the duration of the pandemic and that as a result the employer cannot pay normal wages and outgoings fully but nonetheless wants to retain its employees on the payroll.  

How does an employer prove that the business impact of the Covid-19 crisis is sufficient for it to be eligible for the Scheme?

Eligibility will initially be determined largely based on self-assessment and a self-declaration by the employer. The qualifying employer must declare that it is significantly impacted by the COVID-19 crisis.

This will be combined with a risk-focused follow-up verification by Revenue involving an examination of relevant business records, where necessary. Revenue will expect businesses to be able to produce relevant supporting documents and to fully engage with it on any follow up discussions or checks. It will not, however, be looking for such proofs at the point of application.

Employers are being advised to retain evidence which demonstrates their basis for entering the Scheme. Revenue has provided a non-exhaustive list of relevant evidence which includes:

  • copies of documents submitted to financial institutions as part of the negotiation of forbearance measures;
  • where the decline in turnover was less than 25%, documentation which supports the business rationale for believing it would suffer such a decline;
  • copies of communications to employees or trade unions regarding salary cuts implemented as a direct result of COVID-19; and/or
  • documentation evidencing reliance on the Government Credit Guarantee Scheme or overdraft facilities or other borrowings for capital purposes. 

Revenue has outlined that the examples provided by it are illustrative only and that it is open to considering other relevant evidence as a reasonable demonstration of eligibility for the Scheme.

It has stated that where it seeks to validate employer eligibility for the Scheme, it will adopt a reasonable, fair and pragmatic approach in considering whether the criteria have been met. 

What other checks will Revenue carry out to determine eligibility for the Scheme?

Revenue will be checking the eligibility of employers and employees for the Scheme by carrying out a number of additional checks, which include, but are not limited to, the following:

• ensuring that the employer has applied to operate the scheme;

• ensuring that all eligible employees are included on a payroll submission with a pay date in the month of February made by the employer in the period from 1 February 2020 to 15 March 2020;

• ensuring that the eligible employee was on the payroll as of 29 February 2020; and

• ensuring that the employer has paid the full subsidy amount to the employee.

Does the employer have to be in a particular sector?

No. The Scheme does not, however, apply to the public service and non-commercial semi-state sector.

What is the amount of the wage subsidy under the Scheme?

The Government has stated that, from Thursday, 26 March 2020 until no later than 20 April 2020, a transitional phase will take place (the “Transitional Phase”) during which the amount of the subsidy will be calculated as follows:

a) employees with an average net weekly pay of €586 or less net (an annual gross salary of approximately €38,000 or less) will be eligible for a non-taxable refundable payment to €410 or 70% of the employee’s average net weekly pay, whichever is the lesser; or

b) employees with an average net weekly pay of €587 to €960 net (annual gross salaries of approximately €38,001 to €76,000) will be eligible for a non-taxable refundable payment to €350 or 70% of the employee’s average net weekly pay, whichever is the lesser.

Net weekly pay is the employee’s average net weekly pay for January and February 2020 based on submissions made to Revenue by 15 March 2020.

The Act provides that the wage subsidy will not be paid in respect of employees with an average net weekly pay of more than €960 (annual gross salary of more than €76,000).

During the Transitional Phase, employers will be refunded €410 per each qualifying employee, regardless of the amount of the subsidy actually paid to the employee. If the €410 exceeds the subsidy that the employee is eligible to receive for that week, the employer is obliged to hold the excess. For example, if the employee is eligible for €350, the employer will receive €410 during the Transitional Phase and will need to hold onto €60. In the next phase of the Scheme (i.e. post 20 April), this excess amount will be taken into account by Revenue when paying future subsidy payments to the employer or will have to be repaid directly to Revenue.

Revenue has advised that, after the Transitional Phase, the Scheme will ensure that the subsidy paid to employers will be based on each individual employee’s average net weekly pay, subject to the maximum weekly tax-free amounts.  It states that further information on how these arrangements will work will issue shortly.

Can an employer deduct a pension contribution from a subsidy payment to an employee?

No, the subsidy amount must be paid to the employee in full. Revenue has advised that pension contributions, salary sacrifices etc. must not be deducted from the wage subsidy.

Are employers required to top-up the refund amount?

Yes, employers are required to top-up employees’ wages. Employers are obliged to make “best efforts” to maintain the employees' net income as close as possible to normal net income for the duation of the period of the Scheme. The employer will need to enter at least €0.01 to run payroll. Employees should not, in total, receive more than their normal net weekly pay.

Such additional top-up payments are regarded as gross income and liable to Income Tax and USC.

Will the subsidy payment be taxed?

The payments are liable to income tax. However, the subsidy is not taxable in real-time through the PAYE system during the period of the Scheme. Instead, the employee will be taxed on the subsidy amount paid to them by their employer by review at the end of the year.

How do businesses register for the Scheme?

Employers can apply online by logging into Employers can register at any time during the Scheme operation and before making a payroll submission to Revenue.

Employers will be required to make a self-declaration to avail of the Scheme. The Government has outlined that penalties will apply to any abuse of the Scheme by self-declaring incorrectly, not providing funds to employees and/or not adhering to Revenue guidelines.

Under the Scheme, employers will make the payment to employees through payroll and the relevant refund amount will then be refunded.

An employer who is already registered for the purpose of the temporary refund scheme is not required to take any action and can make payroll submissions from 26 March 2020 under the Scheme.

Will the Scheme apply to new employees or employees due to commence work?

The Scheme will only apply to employees who were on the employer’s payroll on 29 February 2020 and for whom a payroll submission has already been made to Revenue in the period between 1 February 2020 to 15 March 2020.

How long will the refund take?

The refund will, in general, be processed within 2 working days of receipt of the payroll submission.  

How long will the Scheme operate for?

The Government has confirmed that the Scheme will run for 12 weeks from 26 March 2020.

Will anyone know if the employer has availed of the Scheme?

Yes. The Government has confirmed that the names of all employers operating the Scheme will be published on after the Scheme has expired. 

Will employees know if an employer has availed of the Scheme if it has not disclosed this directly to them?

Employers are obliged to show the amount of the subsidy paid on the employee’s payslip and should label the payment "GovC19 WageSub". Failure to do so could result in the employer being liable for penalties. Employees will, therefore, be on notice of the application of the Scheme to them.

Can employers operate the Scheme for employees who have already been laid off?

Yes, if an eligible employer has laid off employees as a result of COVID-19, they can be taken back onto the payroll and will qualify for the subsidy if they meet the criteria and were on payroll at the end of February and details were returned through to Revenue by 15 February.  

Can employers operate the Scheme for employees who are currently in receipt of State benefits?

Employers cannot operate the Scheme for any employee who is making a claim for duplicate support (e.g. Pandemic Unemployment Payments) from the Department of Employment Affairs and Social Protection (DEASP). Where an employee who was previously laid off has been re-engaged, the employee will qualify for the Scheme if their DEASP claim is ceased.

Revenue are sharing data with the DEASP who will use this to identify dual payments and will cease future Pandemic Unemployment Payments for employees that are benefiting from the Scheme.

What are the consequences if an employer abuses the Scheme?

Revenue will compel an employer to refund the amounts received under the Scheme where:

• an employer receives amounts under the Scheme and the employer has not paid the subsidy amount to the specified employee; or

• where the employer was not entitled to receive the subsidy as it did not meet the qualifying criteria.

Additionally, a person could be found guilty of a criminal offence if the person:

• knowingly or wilfully delivers any incorrect return or statement, or knowingly or wilfully provides any incorrect information, in connection with the Scheme; or

• knowingly aids, abets, assists, incites or induces another person to make or deliver knowingly or wilfully any incorrect return or statement, or knowingly or wilfully provide any incorrect information, in connection with the Scheme.

What changes to redundancies are being proposed by the Act?

The Act is proposing to amend Section 12 of the Redundancy Payments Acts 1967 which currently provides that an employee can give notice of an intention to claim redundancy where he/she has been laid-off or kept on short-time for a period of 4 or more consecutive weeks or 6 or more weeks (of which not more than three are consecutive) within a 13 week period.

The Act proposes to amend Section 12 by providing that, during the period of 13 March 2020 and 30 May 2020 (or as may be extended), Section 12 shall not have effect in respect of an employee who has been laid off or kept on short-time due to the effects of measures required to be taken by his or her employer in order to comply with, or as a consequence of, Government policy to prevent, limit, minimise or slow the spread of infection of Covid-19.

For more information contact

Joanne Hyde, Partner and Head of Employment -

Julie Galbraith, Partner in Employment -

Maria Gallagher, Senior Associate in Employment -

Ciara McMahon, Associate in Employment -

Emma Lavin, Solicitor in Employment -

Niamh Diskin, Solicitor in Employment -

For support on legal issues facing your business in light of the outbreak of Covid-19, please visit our Coronavirus hub to get our latest information and guidance. 

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

< Go back