Here at Debitoor, we understand that this is a difficult time for everyone. Businesses are forced to shut, freelancers are out of work, and employees have been laid off due to this global pandemic. The Irish government has issued several loans, grants, and schemes to help you get through the next few months. I have explained them all in detail below.
COVID-19 Wage Subsidy Scheme
The Irish government introduced a temporary scheme to help employers continue paying their employees during the pandemic, which will also allow employees to quickly get back to work once the lockdowns have ceased.
The scheme is currently running for 12 weeks starting on March 26th but may be extended depending on the circumstances at a later date.
The wage subsidy depends on your average take-home pay per week. From March 26th until May 4th, the rates are:
- If your take-home pay was less than €586, you will receive 70% of your net pay up to a maximum of €410.
- If your take-home pay was from €586 - €960, you will receive €350.
- If your take-home pay was above €960, you originally did not qualify for the subsidy, but after April 16th, you would qualify for €350 if you lost more than 60% of your income due to the pandemic.
After May 4th, the rates are as followed:
- If your take-home pay was less than €412, you will receive 85% of your normal pay.
- If your take-home pay was from €412 - €500, you will receive €350 per week with this scheme.
- If your take-home pay was from €500 - €586, you will receive 70% of your normal pay up to a maximum amount of €410.
- If your take-home pay was from €586 - €960, the subsidy will be subject to ‘tapering’ depending on ‘top-up’ amounts from your employer.
- If your employer pays up to 60% of your normal take-home pay, you will receive €350.
- If your employer pays between 60% - 80% of your normal take-home pay, you will receive €205.
- If your employer pays over 80% of your normal take-home pay, you will not be eligible for the subsidy.
- If your take-home pay was above €960, you will not be eligible for this subsidy.
The scheme refunds employers up to €410 per week per employee that qualifies for the subsidy. Eligible employees must have been on the payroll before February 29th, and your business must have faced at least a 25% decrease in profits due to the pandemic.
The employees must not be working for your company while receiving the subsidy or working reduced hours to qualify. You must keep the employees on the payroll, and pay them at least €0.01 to prove they are only on temporary relief due to the coronavirus.
Employers can apply through the Revenue Online ROS System and submit a declaration and payroll information. Revenue will refund you the amounts paid to employees within 2 business days.
If for some reason, the employer can no longer pay an employee and must permanently lay them off, then the employee will be eligible for social welfare benefits.
Cash flow supports for businesses
The Irish government has brought in several different loan options to support businesses during the pandemic. I will explain a few of the ones that affect small businesses and freelancers below.
Working Capital Loan Scheme for SME
This scheme is available for eligible small and medium-sized businesses to access loans between €25,000 and €1.5 million. The loans are issued by the Strategic Banking Corporation of Ireland (SBCI) available through 3 major Irish banks.
To be eligible for this loan, you must be an SME or a small mid-cap business with less than 250 employees (SME), or less than 500 employees (mid-cap), be operating your business in Ireland, and have a maximum turnover of €50 million.
The loans have repayment terms up to 3 years with a maximum interest rate of 4%. You must provide evidence for several criteria to be considered, and can apply through AIB, Ulster Bank, or Bank of Ireland.
Future Growth Loan Scheme for SME
This scheme is also available through SBCI for loans between €100,000 and €3 million with a maximum interest rate of 4.5% with repayment terms up to 10 years.
Similar to the working capital loan, this loan is available for SME or small mid-cap businesses with less than 250 employees (SME), or less than 500 employees (mid-cap), be operating your business in Ireland, and have a maximum turnover of €50 million.
To apply, you must submit an eligibility document to SBCI, and await confirmation. Once approved, the applicant can contact AIB, Ulster Bank, Bank of Ireland, or KBC.
Credit Guarantee Scheme for SME
This scheme provides SME’s and small mid-cap businesses between €10,000 and €1 million with repayment terms up to 7 years.
Similar to the other loans, to qualify, you must have less than 250 (SME), or 500 (mid-cap) employees and have a turnover less than €50 million. Unlike the other loans, the interest rate varies and is based on the lending bank’s small to medium-sized enterprise rates.
With this loan, you apply directly through the 3 qualifying banks, AIB, Ulster Bank, and Bank of Ireland.
You can qualify for this loan if your business has less than 10 employees and under €2 million in turnover, and be affected by the coronavirus pandemic (at least 15% losses). The loan amount is between €5,000 to €50,000 with repayment terms up to 3 years and interest rates up to 5.5%.
This loan is operated through Microfinance Ireland and you can make direct applications through their website. You must not be able to take advantage of other financing options through banks and commercial lenders to apply for this loan.
Commercial rates deferral
The government has issued a deferral in commercial rates payments until the end of May for businesses directly impacted by the pandemic, specifically in the retail, hospitality and leisure industries. The period may be extended at a later date depending on the situation at the time.
COVID-19 Pandemic Unemployment Payment for the self-employed and unemployed
If you are a self-employed person or freelancer who has lost work due to the pandemic, you will be eligible to apply for the unemployment payment. This social welfare payment is geared towards all employees or self-employed workers who have been laid off or lost all income due to the coronavirus.
The payment offers €350 for 12 weeks and is available to all citizens and residents living in Ireland (18 - 66 years old), including students and EEA and Non-EEA residents.
The fastest way to apply is on the “My Welfare” website with your MyGovID account.
If you have lost your job due to the coronavirus, you may also be able to claim jobseeker’s benefit and allowance along with the pandemic unemployment payment. You can find more information on the citizens information website.
Coronavirus Illness Benefit
Regardless of your employer’s sick leave policy, you can claim this benefit if you are medically required to self-isolate due to the coronavirus. You must be instructed directly from a medical professional to self-isolate, or be diagnosed with the virus. You can claim this benefit if you are an employee or a self-employed worker temporarily out from work.
The payment is €350 per week for a maximum of 2 weeks if you are self-isolating, or a maximum of 10 weeks if you are diagnosed with the coronavirus.
Unlike the standard illness benefit, there were special changes due to the coronavirus to allow you to claim the benefit from the first day of sick leave, instead of having to wait 6 days.
You can apply for the illness benefit through the “My Welfare” website with your “MyGovID” account.
We understand that this is a difficult time in the world, and hope that you found this information useful for your business. For the most up to date information, I would suggest heading to the Ireland Citizens Infomation website.