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Employer COVID-19 Refund Scheme

19 March 2020

In order to provide rapid income support to those employees who have suffered a loss of income due to being laid off as a result of the COVID-19 epidemic, the Revenue Commissioners have announced details of the Employer COVID-19 Refund Scheme. 

The aim of this scheme are;
  1. To ensure that individuals may receive the special income support payment without delay through their employer’s payroll system;
  2. To ensure prompt reimbursement to the employer of amounts paid out to employees (usually on a next day basis);
  3. Encourage retention of the employer/employee relationship during the period of interruption, and,
  4. Reduce the impact on the social welfare system’s ability to cope with the current massive increase in demand.
Participation in the scheme by employers is voluntary, however employers are encouraged to facilitate employees by operating the scheme.
 

Who does the scheme apply to?

  • Employers who have temporarily laid off staff as a result of the impact on their business of the COVID-19 (Coronavirus) pandemic;
  • Employers that keep their staff on payroll and have not ceased the employee(s) with Revenue;
  • Employees for whom a payroll submission was made by the employer in the period from 1 February 2020 to 15 March 2020;
  • Employers that are unable to make top-up payments over and above the emergency payment of €203 per week.
It should be noted that under the scheme, the payment cannot be topped up by the employer. Where employers are paying a ‘top up’ amount, the employees should claim the payment directly from the Dept. of Employment and Social Protection (‘DEASP’).
 

How will the scheme operate?

The employer will make the payment of €203 per week to eligible employees and claim a refund from Revenue via the Revenue Online System (ROS) The Revenue Commissioners have stated the reimbursements will in general operate on a next day basis and be paid directly to the employer’s bank account by 2pm the following day.
 
The employer will run their payroll as normal, specifying the following details for each relevant employee;
  • A pay amount of €0.01 (there must be some pay entered for the payroll to run)
  • A non-taxable amount of €203. (No other payment amounts are made by the employer to the employee and all temporarily laid off employees must be granted the €203)
  • PRSI Class J9 should be used
  • The payroll submission must include pay frequency and period number.

 

How will I claim a refund?

Employers, or their agents, should apply to Revenue to operate the scheme by logging on to ROS ‘My Enquiries’, select the category ‘Employer COVID -19 Refund Scheme’ and following the instructions provided.
 

Taxation treatment

Payments made under the scheme are exempt from PAYE, PRSI and USC. In addition, employers may process refunds of tax due to laid off employees via their payroll systems.
 

Any other conditions?

The employee must confirm to the employer that they have not, and will not, claim a payment from DEASP whilst the employer makes this payment through the payroll. Employers will be required to advise their employees to make a claim for Jobseekers Benefit via the DEASP’s MyWelfare.ie online portal.
 

Further information

We anticipate that further guidance will be required in relation to certain specific aspects of the scheme. We are liaising with the Revenue Commissioners and the DEASP and will provide updates as soon as they come to hand.

Full details of the Revenue statement can be found here: https://revenue.ie/en/news/articles/employer-covid-19-refund-scheme.aspx