Fitzmaurice claims Wage Subsidy rule hurting small businesses

Employers are being deemed ineligible for the Wage Subsidy Scheme and forced to cut ties with workers due to a “technicality” in the rules a Galway TD has claimed.

The Wage Subsidy Scheme was created to allow people to remain on their employer’s payroll during the current Coronavirus pandemic, even though businesses are closed or operating at reduced capacity.

The scheme sees the state paying up to 85% of an employee’s wages, with employers able to top that up further if they so wish.

This will reduce the need for people to go through the process of claiming pandemic unemployment benefits, and hopefully make it easier for businesses to get back to life when the crisis has passes.

But Roscommon-Galway TD Michael Fitzmaurice says that some employers are being deemed ineligible for the scheme because they have not updated their payroll with the revenue within the required window.

In order to qualify for the scheme, employers must have made a payroll submission to the Revenue Commissioners between February 1 and March 15 of this year.

“It is worth noting that the new real-time reporting payroll system was only rolled out in the last 12 months,” the Independent TD said.

“So many businesses avail of professional services in order to service the system on a quarterly basis when returns are due to Revenue.”

“Because of being deemed ineligible for the scheme as their payroll systems weren’t updated between the dates mentioned, some employers are being forced to cut ties with their employees as they cannot afford to pay their wages”.

This is hitting small and medium enterprises with correspondingly small work forces the hardest he added, as they might not need to updated their payroll system on a weekly basis since employee details or wages could be unchanged.

Figures released by the Revenue on Friday show that just over 45,000 employers have registered for the scheme so far.

“This is a double-edged sword for small businesses, particularly those that are classed as essential at the moment.”

“If a company is not eligible for the wage subsidy scheme, then they might have to temporarily lay off staff.”

“But because of this, the company might not be able to carry out the work available due to a lack of man power.”

Deputy Fitzmaurice said that Minister Paschal Donohue needs to intervene if the government wants to keep people in employment during the current health crisis.