Covid-19 Temporary Wage Subsidy Scheme and Pandemic Unemployment Payment

Since the outbreak of the Covid-19 pandemic, the government has introduced various measures to support individuals and businesses who have lost their income due to the current crisis. Among these measures is a Covid-19 Temporary Wage Subsidy Scheme (TWSS) to support employers so that they can retain their employees and a Covid-19 Pandemic Unemployment Payment to support individuals who have been laid off or lost their income.

Covid-19 Temporary Wage Subsidy Scheme

This scheme, operated by Revenue, is open to employers who have been adversely impacted by the Covid-19 crisis. Employers must have suffered at least a 25% decline in turnover. Payments are based on each employee’s normal net weekly pay and are subject to certain limits. The subsidy is capped at €410 for average net pay from €0 to €586, and at €350 for average net pay from €586.00 to €960.00.


Where average net pay is above €960, the subsidy is not available. The purpose of the scheme is to enable employers to retain their links with employees so that their business can recover quickly when the current crisis ends. At the time of writing, the scheme is expected to last 12 weeks from 26th March 2020.


Covid-19 Pandemic Unemployment Payment

This is a social welfare payment of €350 per week. It is available to employees and the self-employed who have lost their job on (or after) March 13th due to the COVID-19 (Coronavirus) pandemic. To qualify, you must be:

  • Aged between 18 and 66 years old
  • Live in the Republic of Ireland
  • Have lost your job due to the COVID-19 pandemic or have been temporarily laid off due to the COVID-19 pandemic
  • If you are self-employed, your trading income must have ceased due to Covid-19.

The quickest way to apply for the COVID-19 payment is online at


Self-employed individuals aged over 66

While it is welcome that self-employed individuals are eligible for the Covid-19 Pandemic Unemployment Payment, individuals aged over 66 do not qualify for this support. This will create difficulties for individuals who may have no other source of income, or whose only other income is a small pension.


Where individuals are struggling, they may be able to apply for a supplementary welfare payment, subject to satisfying the relevant requirements. This is a discretionary weekly payment to assist with ongoing additional expenses that a person cannot reasonably be expected to meet out of their weekly income. To apply, contact your local Intreo office.


FOR EMPLOYERS: Covid-19 Temporary Wage Subsidy Scheme


The government has acted swiftly to support individuals and businesses during the current Covid-19 crisis. Among the financial supports recently announced is a Temporary Wage Subsidy Scheme (TWSS) for employers. This is open to employers who keep employees on the payroll during the current crisis and is intended to enable them to recover quickly when the current restrictions abate. The scheme, announced on 24th March 2020, is being operated by Revenue whose rapid response providing information and guidance is enabling employers to apply without delay. The TWSS replaces the previously announced Covid-19 Refund Scheme.


The application for the TWSS is based on self-assessment principles. Qualifying conditions include that employers must be significantly adversely impacted by the Covid-19 crisis with at least a 25% decline in turnover. Employers must be unable to pay normal wages and normal outgoings fully and must retain their employees on the payroll.


It will be important for employers to keep supporting documentation on file to demonstrate that they meet the criteria. Examples of relevant documentation include:

  • Documentation supporting the employer’s rationale for calculating a fall in turnover/orders of at least 25%. An employer may base this judgment on a decline in orders in March 2020 when compared to February 2020, projected Q2 turnover compared to Q1 2020 (or Q2, 2019), or any other reasonable grounds.
  • Cashflows/ budgets based on projections for the business had the Covid-19 pandemic not occurred.
  • Correspondence with Revenue to agree forbearance measures in respect of tax liabilities.
  • Documentation submitted to a financial institution when negotiating forbearance measures.
  • Notifications or communications to employees, trade unions or staff representative bodies regarding salary/wage cuts being implemented as a direct result of the COVID-19 pandemic.
  • Documentation showing that any cash reserves in the business are required to fund debt or for other business commitments and expansion plans.
  • Evidence of reliance on the Government Credit Guarantee Scheme, overdraft facilities or other borrowings for capital purposes.
  • In the case of start-up businesses, evidence of a decline in investment by at least 25% arising from the COVID-19 crisis.

Cash reserves

Where an employer has strong cash reserves that are required for working capital or to meet expansion plans, they can qualify for the TWSS. However, companies with extraordinary cash reserves may not qualify unless they have significant plans for expansion. If in doubt, clarification from Revenue should be sought.

TWSS Payments

The TWSS is confined to employees who were on the employer’s payroll on 29th February 2020 and for whom a payroll submission was made to Revenue in the period from 1st February 2020 to 15th March 2020. Directors are eligible provided they are on the payroll.


Payments are based on each employee’s normal net weekly pay and are subject to the following limits:

  • For average net pay from €0 to €586, the subsidy is capped at €410
  • For average net pay from €586.00 to €960.00, the subsidy is €350.00
  • Where average pay is above €960, no subsidy is available.

While income tax, USC, LPT and PRSI are not deducted from the TWSS payment, the subsidy will be liable to Income Tax and USC on review at the end of the year.


Top-up payments

Employers are permitted to make “Top-Up” payments of up to 30% of net pay for qualifying employees. Employers who top up by more than 30% will have their TWSS subsidy reduced on a euro for euro basis, so for every euro above the 30% threshold, the subsidy will be reduced by an equivalent amount.


Top-up payments qualify for a reduced rate of employers’ PRSI (0.5%) and there is no employees’ PRSI. An important element of the TWSS scheme is that the employee’s PRSI record will not be broken.


Revenue updates

While the TWSS is not without shortcomings— understandable given the speed at which the new measures were introduced—the scheme offers valuable support for employers and employees.


Revenue is providing regular updates in response to frequently asked questions. At the time of writing, the scheme is expected to last 12 weeks from 26th March 2020.

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!

You must be logged in to post a comment.