Covid-19 Employer Refund Scheme

On 15 March 2020, the Government announced the implementation of exceptional measures, administered through the Department of Employment Affairs and Social Protection (DEASP), to enable workers who are temporarily laid off due to the COVID-19 (Coronavirus) pandemic to claim a special support payment of €203 per week.

Revenue has worked closely with DEASP to provide an option for employers to make this payment to their employees through the normal payroll process. The amounts paid to employees under the scheme are not subject to tax, USC or PRSI.

Employers are encouraged to facilitate employees by operating the scheme, where possible. The amounts paid to employees and notified to Revenue through the payroll submission (PSR) will then be transferred into the employer’s bank account by Revenue. This reimbursement will, in general, be made on a ‘next day’ basis. It will ensure a speedy payment process for employees and minimise the hardship for employees who are temporarily laid off.

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.

Registering for the Scheme

Employers wishing to operate the scheme must first register through 'ROS > My Enquiries' and by selecting the category ‘Employer COVID -19 Refund Scheme’.

The employer should also ensure that they have a bank account on ROS to accept the refunds (ROS > Manage Bank Accounts > Manage EFT)

Other Key Points to Note

The scheme has been designed to allow employers to pay €203 on behalf of the DEASP and to receive the refund from Revenue - thus the payment of €203 cannot be topped up
Where an employee earns less than €203 (e. g. a part-time employee) they will still be entitled to receive the flat rate of €203
The payment must be processed in line with the employee's normal pay frequency and cannot be paid in advance
Refunds will not be received for employees without a PPSN
Where a tax/USC refund arises when processing the €203 payment, the employee will be entitled to receive this refund alongside this payment. Such amounts will also be refunded to the employer by Revenue.
Where an underpayment in PAYE/USC arises, the employee can be put on a week 1/month 1 basis to ensure they receive the €203
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 asked to advise employees to make a Jobseeker’s Benefit claim via the MyWelfare.ie online portal (so that the employee(s) can access qualified dependant payments if appropriate).

Processing the Payment in BrightPay

In order for Revenue to recognise employees being paid under the scheme, they have requested that PRSI Class J9 is used. There will also be a notional gross pay amount of €0.01 applied to generate a payroll submission.

(Where employees are being paid this payment together with other salary (e.g. where a monthly paid employee is laid off mid-month), Revenue will allow the full payment to be processed under PRSI Class J9 in this scenario).

a) Within the 'Employer' utility, you will find a preset addition type called 'Covid-19 Pandemic Payment' set up for you:

b) To apply the payment to an employee's payslip, within the 'Payroll' utility, select the employee from the left hand listing.

c) Within the Additions and Deductions section, click 'Add', followed by 'COVID-19 Pandemic Payment'.

At the prompt, click 'Yes' to apply the payment.

A notional gross pay of 1 cent together with a non taxable payment of €203 will now be pre-populated on the employee's payslip (amend this amount accordingly where appropriate e.g where a monthly paid employee is laid off mid-month). The employee's PRSI Class will also automatically set to J9.

Please note: All other payments, benefits and deductions will be zero-ised.

d) On finalising the payslip, the above will subsequently flow through to the payroll submission (PSR), from which Revenue can ascertain the refund due to the employer.

With regard to the refund, if employers wish, they may submit their payroll submission to Revenue at the start of their pay period (e.g. on Monday, but paying employees on the Friday) as this will ensure they have the received the payment from Revenue before paying employees.

**Where a tax/USC refund arises when processing the €203 payment, the employee will be entitled to receive this refund alongside this payment. Such amounts will also be refunded to the employer by Revenue through the scheme.

In this instance, the Finalised Totals report within BrightPay will not match the Revenue statement. In this case, the Revenue Statement will be correct as Revenue will account for the refunds.