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Wage Subsidy Scheme Issues

  • 01-04-2020 8:58am
    #1
    Registered Users Posts: 262 ✭✭ Sono Topolino


    I work in tax so my sister asked me to help her apply for the Wage Subsidy Scheme for her business. While reading through the terms and conditions, I smelled a rat and asked advice from a solicitor who told me in no uncertain terms that my sister was opening herself up to legal jeopardy.

    Solicitor friend said that by self-declaring that her LTD was experiencing an "inability to claim emoluments", she was admitting to trading while insolvent, and becomes personally liable for the company's debts (basically gives up LTD status). Now the Government has said that this is not the case, and Niall Cody was on Morning Ireland yesterday also saying the same thing. So there's that.

    But still I have serious concerns: if you apply for this scheme in good faith, and in 6 months time you find that your business is in fact unable to continue trading, you go into receivership, can your creditors come after your debts? Can they seek a court declaration to this effect? It's a concern. The business will have been published on the Revenue list so this will be publicly available information. Wouldn't a judge be the one interpreting the points of law, not the Revenue for the Minister for Finance?

    My sister wants to apply for this scheme as a way to keep her staff paid and her business ticking over, but we're both worried. To be clear: I'm not looking for legal advice, to see how other businesses are approaching this.


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Comments

  • Registered Users Posts: 528 ✭✭✭ eusap


    don't forget the income tax problem it creates, the employer cannot charge PAYE on the subsidy but at the end of the year the employee will have to include the earnings in there tax settlement.


  • Registered Users Posts: 41,355 ✭✭✭✭ SEPT 23 1989


    Revenue or the social won't question anything now just fire out the money but when this is finally over they will be going back over everything with a fine toothed comb


  • Registered Users Posts: 262 ✭✭ Sono Topolino


    Revenue or the social won't question anything now just fire out the money but when this is finally over they will be going back over everything with a fine toothed comb

    Not too worried about that - Niall Cody said so on the record.

    It’s the implications of admitting publicly that you cannot afford to pay your staff their wages that is the issue.


  • Registered Users Posts: 11,292 ✭✭✭✭ mariaalice


    Not too worried about that - Niall Cody said so on the record.

    It’s the implications of admitting publicly that you cannot afford to pay your staff their wages that is the issue.

    Very Irish, not wanting to be seen publicly as not able to afford to pay you staff.


  • Registered Users Posts: 262 ✭✭ Sono Topolino


    mariaalice wrote: »
    Very Irish, not wanting to be seen publicly as not able to afford to pay you staff.

    Cop on to yourself. If it makes getting credit from the banks harder, or exposes my little sister to liability for the company's existing debts if her business has to close as a result of this, then it's a legitimate worry.


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  • Registered Users Posts: 11,292 ✭✭✭✭ mariaalice


    Cop on to yourself. If it makes getting credit from the banks harder, or exposes my little sister to liability for the company's existing debts if her business has to close as a result of this, then it's a legitimate worry.

    The head of the revenue services said its not at issue, in a time when the government/powers of the state are trying to help.." you smell a rat"


  • Registered Users Posts: 262 ✭✭ Sono Topolino


    mariaalice wrote: »
    The head of the revenue services said its not at issue, in a time when the government/powers of the state are trying to help.." you smell a rat"

    Imagine you’re a creditor and the limited liability business you’ve loaned money to goes bust. Previously they availed of this scheme. Do you accept not getting all of your money back, or do you take the shareholders to court and say “hey in March 2020 you knew you were in trouble and still you continued trading. This is in violation of Company Law and you have assumed liability for your company’s debts.”

    I don’t think creditors give a damn what the head of Revenue services says... They want their money back.


  • Registered Users Posts: 208 ✭✭ settopbox


    My employer has brought me into work as normal, but it now only paying me the 350 euro.
    I see it as him being essentially getting a subsidy from the govt for my wages, its costing him nothing to employ me.

    Is this right ?

    he is saying that he doesnt have the means to pay me ..


  • Registered Users Posts: 262 ✭✭ Sono Topolino


    If his turnover has fallen 25% and he is self-declaring that he doesn't have the means to pay you, then I wonder how you are adding value? He probably should let you go home.


  • Moderators, Category Moderators, Music Moderators, Politics Moderators, Society & Culture Moderators Posts: 22,298 CMod ✭✭✭✭ Dravokivich


    settopbox wrote: »
    My employer has brought me into work as normal, but it now only paying me the 350 euro.
    I see it as him being essentially getting a subsidy from the govt for my wages, its costing him nothing to employ me.

    Is this right ?

    he is saying that he doesnt have the means to pay me ..

    I thought the scheme was to pay you, through your employer, while you were out of work. Not to supplement your employers wage bill.


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  • Registered Users Posts: 11,668 ✭✭✭✭ eh i dunno


    settopbox wrote: »
    My employer has brought me into work as normal, but it now only paying me the 350 euro.
    I see it as him being essentially getting a subsidy from the govt for my wages, its costing him nothing to employ me.

    Is this right ?

    he is saying that he doesnt have the means to pay me ..

    Same for me. Seems the employer now gets us to work at no cost to himself.


  • Closed Accounts Posts: 2,743 ✭✭✭ Heres Johnny


    Open to abuse by employers alright. We are signed up for the subsidy but we are topping up employees wages to 100% even if some of them are only doing buts and pieces. Thats for 2 weeks, we think we will go to 75% of the wages after that. There may come a point in this 12 weeks where we are doing subsidy only, but we cant see that far ahead.


  • Registered Users Posts: 10 ✭✭✭ Mobile mad


    Hi,
    I have been placed on the above scheme for a 2 week period now work has contacted me about 2 days work next week . They are saying it is vital work where do I stand with getting payed for these 2 days along with the 350 wage subsidy. I am just afraid my company is abusing the payment and use it to pay some of our wages next week.


  • Closed Accounts Posts: 2,743 ✭✭✭ Heres Johnny


    Mobile mad wrote: »
    Hi,
    I have been placed on the above scheme for a 2 week period now work has contacted me about 2 days work next week . They are saying it is vital work where do I stand with getting payed for these 2 days along with the 350 wage subsidy. I am just afraid my company is abusing the payment and use it to pay some of our wages next week.

    Your company is probably suffering badly too. I'd take the 350 and do the 2 days. It will get you out of the house too, but make sure it's safe I suppose.
    The economy is probably going to come back slowly, certainly slower than it stopped, that's for sure. Companies will remember who helped out at this time and who didn't.
    Don't take a short term view on this, but you know your job better than me so make your own call on it


  • Registered Users Posts: 9,816 ✭✭✭ Dav010


    Your employer can top up the wage subsidy they receive and pay you for the 2 days. Any business who have suffered a 25% loss in income can do this. So your company is entitled to use the subsidy to pay wages, that is what it is for.


  • Posts: 17,733 ✭✭✭✭ [Deleted User]


    Mobile mad wrote: »
    ............... the payment and use it to pay some of our wages next week.

    A remarkable viewpoint.


  • Registered Users Posts: 10 ✭✭✭ Mobile mad


    Augeo wrote: »
    A remarkable viewpoint.

    Sorry I dont understand


  • Registered Users Posts: 10 ✭✭✭ Mobile mad


    Your company is probably suffering badly too. I'd take the 350 and do the 2 days. It will get you out of the house too, but make sure it's safe I suppose.
    The economy is probably going to come back slowly, certainly slower than it stopped, that's for sure. Companies will remember who helped out at this time and who didn't.
    Don't take a short term view on this, but you know your job better than me so make your own call on it

    The company I work for will get paid from the client which is the esb but I will only receive the 350 hardly fair


  • Registered Users Posts: 10 ✭✭✭ Mobile mad


    Dav010 wrote: »
    Your employer can top up the wage subsidy they receive and pay you for the 2 days. Any business who have suffered a 25% loss in income can do this. So your company is entitled to use the subsidy to pay wages, that is what it is for.

    The company has topped up our wages I warn more than €586 so only get 350 after the pension and union comes out of this its 320.


  • Registered Users Posts: 9,816 ✭✭✭ Dav010


    Mobile mad wrote: »
    Sorry I dont understand

    Your employer is actually helping you by registering you on the wage subsidy scheme rather than laying you off and telling you to register for unemployment benefit. You are likely to be paid more per week, you don’t have to register with welfare, you are still employed, the connection is still there with your company and you have a job to go back to straight away when this is over.

    The wage subsidy scheme is precisely for what your employer is doing, it is a subsidy to help employers keep their staff and pay some part of their wages. That is why it is a little surprising that you would be suspicious of your employer.

    Incidentally, you are still employed, if the work is essential and you refuse, nothing to stop your employer from laying you off and telling you to paddle your own boat.


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  • Registered Users Posts: 56 ✭✭✭ gb19815


    Is this payment not €410 and is there any entitlement for employer to top it up?
    Also I read that tax and usc will re issue can anyone confirm this ?


  • Registered Users Posts: 56 ✭✭✭ gb19815


    Is this payment not €410 and is there any entitlement for employer to top it up?
    Also I read that tax and usc will re issue can anyone confirm this ?


  • Closed Accounts Posts: 2,743 ✭✭✭ Heres Johnny


    Mobile mad wrote: »
    The company I work for will get paid from the client which is the esb but I will only receive the 350 hardly fair

    For 2 days work. Don't worry where the money is coming from whether it's the govt or the employer.
    If you want to say no, say no, but there will be other employees who will say yes and when it comes to the crunch I know which one I'd be keeping on.
    We've had employees react like you and employees that will still go out and just happy they have work to go to.
    It's not easy for employers either at the moment, I'm trying to keep 70 people in Ireland and 80 people in UK tipping over and I know not everyone will be happy but that's life.
    We are topping up wages to 100% for 2 weeks and I had someone complain that his wages was 100% and he did a full weeks work where some colleagues got 100% and only did a partial week. But that's because there was plenty of work for his skills and not for the others, but that will come around the other way.
    Short sightedness and squeezing your employer at the moment will come back to haunt you.
    But don't be taken advantage of either, your call.


  • Administrators, Social & Fun Moderators, Sports Moderators Posts: 62,405 Admin ✭✭✭✭✭ Beasty


    Threads merged


  • Registered Users Posts: 9,816 ✭✭✭ Dav010


    gb19815 wrote: »
    Is this payment not €410 and is there any entitlement for employer to top it up?
    Also I read that tax and usc will re issue can anyone confirm this ?

    Up to. €410. The payment subsidy is 70% of net wage up to a max of €410.

    For some reason, those who earn over €585 are only getting a max of €350.

    Yes employers can top up, though I would imagine few would be in a position to do so right now.


  • Registered Users Posts: 56 ✭✭✭ gb19815


    Dav010 wrote: »
    Up to. €410. The payment subsidy is 70% of net wage up to a max of €410.

    For some reason, those who earn over €585 are only getting a max of €350.

    Yes employers can top up, though I would imagine few would be in a position to do so right now.

    Can anyone confirm that tax paid this year reissues ?


  • Registered Users Posts: 10 ✭✭✭ Mobile mad


    Dav010 wrote: »
    Your employer is actually helping you by registering you on the wage subsidy scheme rather than laying you off and telling you to register for unemployment benefit. You are likely to be paid more per week, you don’t have to register with welfare, you are still employed, the connection is still there with your company and you have a job to go back to straight away when this is over.

    The wage subsidy scheme is precibsely for what your employer is doing, it is a subsidy to help employers keep their staff and pay some part of their wages. That is why it is a little surprising that you would be suspicious of your employer.

    Incidentally, you are still employed, if the work is essential and you refuse, nothing to stop your employer from laying you off and telling you to paddle your own boat.
    So if they get paid by the client for the work in this line of work they will get the man hours plus work done and the 350 from the government surely they gaining even for them to bring it up to the 410 would be something


  • Registered Users Posts: 9,816 ✭✭✭ Dav010


    Mobile mad wrote: »
    So if they get paid by the client for the work in this line of work they will get the man hours plus work done and the 350 from the government surely they gaining even for them to bring it up to the 410 would be something

    You are missing the point. If your business is down by 25%, you can apply for wage subsidy to pay your staff. The client might pay for this job, but business is likely to be down considerably.

    I think that if you are not happy about staying on the books, I’m sure your employer would understand if you ask to be made unemployed.


  • Posts: 17,733 ✭✭✭✭ [Deleted User]


    Mobile mad wrote: »
    ............surely they gaining even for them to bring it up to the 410 would be something

    You think over the course of Covid19 they are gaining?
    Are you serious?


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  • Registered Users Posts: 9,816 ✭✭✭ Dav010


    Augeo wrote: »
    You think over the course of Covid19 they are gaining?
    Are you serious?

    I can’t think of a business that would not be down.


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