COVID-19 Wage Subsidy Scheme

| David O’Riordan

On the evening of 24 March 2020, a Temporary COVID-19 Wage Subsidy Scheme (“TWSS”) was introduced by Taoiseach Leo Varadkar. The measure is to provide financial support to workers affected by the COVID-19 crisis and is expected to last 12 weeks.

Revenue’s general approach to businesses experiencing cashflow and consequent tax payment difficulties is to work towards agreeing mutually acceptable solutions that assist a return to viability as soon as possible. In any such engagement, Revenue expects businesses to be able to produce relevant supporting documentation when requested to do so and to fully engage with Revenue on any follow up discussions or Revenue checks.

Here is a brief summary of the scheme however we recommend that you:-

  • Stay in constant contact with your accountant and financial advisor and
  • Keep checking website as the scheme has changed since it was first announced.
  • Advise your employees that you are availing of the scheme as it appears that revenue will be clawing back these subsidies through tax credits.

Who is eligible for TWSS? 

TWSS is available to employers across all sectors excluding the Public Service and Non-Commercial Semi-State Sector. TWSS is available for employers who retain staff on payroll, subject to the levels of pay to the employees the employer may be eligible for the scheme for some or all of the employees.

To qualify for the scheme a business must be experiencing a significant negative economic disruption due to the Covid-19 pandemic.  In general, this will be readily apparent, some businesses and some sectors have had to close their premises, the impact of public health advice on individual businesses in terms of restrictions on trade, physical distancing, the nature of essential and non-essential businesses, will be obvious.

Application for the scheme is based on self-assessment principles, a qualifying employer must declare that it is significantly impacted by the crisis and meet the following criteria:

  • Be able to demonstrate that the employer’s turnover is likely to decrease by 25% from the period 14 March 2020 to 30 June 2020 (Q2, 2020). The key focus will be on the fact of significant negative economic disruption on the employer due to Covid-19.
  • The business is unable to meet normal wages or normal outgoings
  • Retain their employees on the payroll with the intention of continuing to employ the employee during the specified period from 26 March 2020. The scheme is confined to employees who were on the employer’s payroll at 29 February 2020, and for whom a payroll submission has already been made to Revenue in the period from 1 February 2020 to 15 March 2020.

Revenue will not be looking for proof of qualification at this stage. They may in future, based on risk criteria review eligibility. In this context employers should retain their evidence/basis for entering the scheme and proof that there was no doubt about their qualification.

In this document (link)Revenue describes the operation of the transitional phase of the Temporary COVID-19 Wage Subsidy Scheme

Who pays the Wage Subsidy?

The wage subsidy will be paid by the employer to the employee through the normal payroll system. The Employer will then be reimbursed for amounts paid to employees and notified to revenue through the payroll process.  Revenue guidance suggests the refund will be processed within two working days of receipt of the payroll submission. Income tax and USC will not be applied to the subsidy scheme through the payroll. Employee PRSI will not apply nor will Employer PRSI apply and will be reduced from 11.05% to 0.5% on the top up payment.

How to apply for TWSS

Details on how to register for and operate the scheme can be found Here along with other useful information and advice from Revenue during the COVID-19 pandemic.


In operating the scheme, Revenue’s priority is to ensure that all employers experiencing significant negative economic disruption from COVID-19 can register for and start to receive payment as quickly as possible.

Please note that Government legislation is that prevailing at the time and is subject to change. SOR recommend that employers check the most up to date guidance when deciding on whether or not to apply for the scheme.

For further queries on TWSS, please contact Clodagh Gill.

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