The government has today announced details of its Covid-19 Income Support Scheme for Irish employees and businesses.

Among the key elements of the scheme is the provision of 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. This is the equivalent of €500 per week before tax.

Other key points in the scheme include:

• 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.
• The self-employed will be eligible for the Covid-19 Pandemic Unemployment Payment of €350 directly from the Department of Employment Affairs and Social Protection (rather than the Revenue scheme).
• Enhanced protections for people facing difficulties with their mortgages, rent or utility bills.

Taoiseach Leo Varadkar (pictured) said the measures will cost an estimated €3.7bn over a 12-week period. “The government has today agreed unprecedented actions to respond to an unprecedented emergency,” he stated.

At the same time, Varadkar said non-essential shops must cease trading from tonight.

In Association with

• Download types of retailers that CAN continue to trade

• All theatres, clubs, gyms/leisure centres, hairdressers, betting shops, marts, markets, casinos, bingo halls, libraries and other similar outlets are to shut
• All hotels to limit occupancy to essential non-social and non-tourist reasons
• All non-essential retail outlets are to close to members of the public and all other retail outlets are to implement physical distancing
• All cafes and restaurants are to limit supply to take away food or delivery
• All sporting events are cancelled, including those behind closed doors
• All playgrounds and holiday/caravan parks will close
• All places of worship are to restrict numbers entering at any one time to ensure adequate physical distancing
• All organised social indoor and outdoor events of any size are not to take place.

How will the Temporary Wage Support Scheme work?

An eligible employer will be supported up to 70% of an employee’s take home income up to a maximum weekly tax free payment of €410 (i.e. 70% of take home weekly income of €38,000 per anum).

The 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.

Who will 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.

This scheme is open to impacted employers in all sectors and the employee must have been on the payroll in February 2020. 

What about the self-employed?

Self-employed  people who qualify will be paid the Covid-19 Pandemic Unemployment Payment of €350 rather than through the Revenue scheme.  They will be eligible on a similar basis as the Revenue scheme for employees. 

Who will get the enhanced emergency Covid-19 Pandemic Unemployment Payment?

People who have already been approved for the Covid-19 Pandemic Unemployment Payment will now get an increased payment of €350 per week (instead of €203) at their next payment date.

Anyone else who loses their job due to the Covid-19 crisis can apply to the DEASP for payment at the new rate.

The Covid-19 illness payment has been increased to €350 per week. Further details are available from the Department of Employment Affairs and Social Protection, and it last 12 weeks.

Rents 

The government said it is is introducing legislation to prevent both the termination of residential tenancies and any rent increases for the duration of the Covid-19 crisis.

The banks have also said they will support buy-to-let bank customers with tenants affected by Covid-19 with an opportunity to seek a payment break of up to three months, so they can in turn offer forbearance to their tenants.

Rent Supplement is also available as a short-term income support to those in the private rented sector who are experiencing difficulty paying their rent. A government statement said that in view of the difficulties created for many in the private rented sector who have lost significant employment income, DEASP will use "the full flexibility of the scheme" to provide the necessary support. 

Mortgages 

Varadkar pointed to a series of measures to support people impacted by Covid-19 have been announced by the banking sector. These include:

• Flexible arrangements, including a payment break for mortgages and other loans. Customers affected by Covid-19 must contact their bank to discuss the flexibility available to them, including the possibility of a payment break of up to three months. Non-bank mortgage lenders and credit servicing firms have also announced their support for this measure.

• Support for buy-to-let bank customers with tenants affected by Covid-19. The government says there is bank agreement that owners of rental property will be provided with an opportunity to seek a payment break of up to three months.

• In addition, applications for payment breaks as a result of Covid-19 will not affect credit records, the government pledged

Utility Bills 

The Commission for Regulation of Utilities has issued a moratorium on disconnections of domestic customers for non-payment to the gas and electricity suppliers.

Other Measures 

In addition to the scheme being announced today, the government is drawing attention to a range of supports already announced. They include:

Financial supports, including a €200m Strategic Banking Corporation of Ireland Working Capital scheme; a €200m 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 (these loans are now interest free with no repayments for six months);  Local Enterprise Offices in every county will be providing vouchers from €2,500 up to €10,000;  a Finance in Focus grant of €7,200 will be available to Enterprise Ireland and Údarás na Gaeltachta clients

Other supports including a First Responder support service through the Intreo Offices and development agencies, Enterprise Ireland and IDA Ireland in each region to provide tailored supports for affected businesses;  the Department of Employment Affairs and Social Protection Short Term Work Support Scheme.

Deferral of Business Rates:  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.  

Taxation Measures:  Revenue has posted specific advice for businesses experiencing trading difficulties as a result of Covid-19 including information on tax returns, the application of late payment interest, debt enforcement, tax clearance and customs.  Among the highlights:

• Interest on late payments is suspended for January/February VAT and both February and March PAYE (Employers) liabilities.
• All debt enforcement activity is suspended until further notice.
• Current tax clearance status will remain in place for all businesses over the coming months.
• The Relevant Contract Tax rate review scheduled to take place in March is suspended.
• Critical pharmaceutical products and medicines will be given a Customs ‘green routing’ to facilitate uninterrupted importation and supply.

Banking and Credit Measures

All the banks have announced that they will offer flexibility to their customers, and they may be able to provide payment holidays or emergency working capital facilities. The main non-bank lenders also confirmed their intention to also support the range of measures announced by the country’s main retail banks which is to be welcomed.

A deferral of up to three months on loan repayments will be available to many businesses. In addition, the government insists that banks are adopting a customer-focussed approach to these businesses with tailored supports including extensions of credit lines, risk guarantees, and trade finance.

Photos: Rollingnews.ie