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COVID-19 Employer Refund Scheme

25 March 2020
The Irish government has introduced a new COVID-19 Pandemic Unemployment Payment ("the Payment") for employees and self employed individuals who have lost their employment or work due to a downturn in economic activity caused by COVID-19. 

The rate of the COVID-19 Payment is €350 per week (previously €203 per week) and it is payable for the duration of the crisis. Employees can apply for this payment directly from the Department of Employment and Social Affairs ("the Department") where the employer cannot make this payment. 

Where the employer is in a position to make this payment, they are encouraged to do so and retain the employee on payment. The employer can then seek a refund of this Payment from the State. 

Refund Scheme 

A COVID-19 Employer Refund Scheme ("Refund Scheme") has been established which allows employers to be refunded €350 per week in respect of workers who are temporarily laid off and remain in employment. 

Revenue have issued guidance for employers in relation to the Refund Scheme

The refund is available in respect of employees: 

- That have been working with the employer 
- That have been temporarily laid off due to Covid 19 and are eligible for the Covid-19 Pandemic Unemployment Payment 
- Non EU/EEA employees who have been temporarily laid off and are therefore eligible for the Covid-19 Pandemic Unemployment Payment 
- Between 18 and 66 years old 
- That have been included on a payroll submission to Revenue between 1 February and 15 March
- Not ceased as an employee with Revenue.   

While initially, the Revenue guidelines indicated that employers wishing to make a top up payment to employees would not be eligible to receive a refund of the payment of €350 made to employees, Revenue guidelines now provide that employers engaged with the Refund Scheme can top up the payment made by the State and details of this are still being finalised and will be announced shortly. 

Employers can register for the Refund Scheme through Revenue's online portal/ ROS.  Where an employer has satisfied the criteria and applied the payment correctly, it is expected that they will be reimbursed on a "next day" basis by Revenue. 

Processing the payment through payroll 

Revenue have also provided guidance in terms of how to process the payment through payroll. Once the application is successfully made, the employer should make the payroll submission to Revenue on or before the relevant pay date for their employees. The payroll should be completed with the following details befing entered in respect of the relevant employees: 

1. PRSI Class J9 should be selected;
2. A pay amount of €0.01 should be entered as a payment of some form must be made;
3. A non-taxable amount of €350 should be entered; and
4. The submission should include pay frequency and period number.

The payment of €350 will be made to the employee without deduction of income tax, USC or PRSI. Where an employee is entitled to a refund of income tax, USC or PRSI, this should be repaid to the employee by the employer, who will in turn be refunded the amount by the Revenue Commissioners.

Following the payroll submission, the employer will be credited €350 per relevant employee per week to the employer’s bank account as registered in ROS. In terms of timeline, Revenue state that the refund for a submission received before 2pm on a given day will be made to the employer on the next banking day.

Conditions of the Refund Scheme 

Employees must confirm to the employer that they have not and will not claim a payment from the Department while the employer makes this payment through payroll. 

Employers will be asked to advise employees with dependants to make a claim for Jobseekers Benefit via the MyWelfare.ie online portal (so that employees can access qualified dependent payments if appropriate). 

Where the employee resumes their ordinary employment with the employer, secures employment elsewhere, or received additional support from the Department, the employee must not be included in future submissions under the Refund Scheme, by the employer. 

Further Reading