COVID-19 financial support scenarios Ireland (October update)

Background

The Professional Golfers’ Association is aware that self-employed PGA Professionals use a variety of business models in order to deliver their services. Almost every PGA Professional is currently affected by business interruption due to the COVID-19 emergency, while government advice and support is evolving almost daily.

Against this background, the Association is keen to provide some clarity to members on what government support is currently available under a number of scenarios, depending on how their individual businesses are constituted, and how this support might be accessed. This information is for guidance only. It is not intended to be prescriptive and legal and accounting/tax advice should be sought where appropriate.

These scenarios are relevant as of October 2020.

He continued trading until such times as the golf courses throughout the island of Ireland had to close in March 2020 because of the COVID pandemic. Jonathan was able to take advantage of the Republic of Ireland government’s COVID-19 Wage Subsidy Scheme as a method of keeping his Assistant registered as an employee and the COVID-19 Pandemic Unemployment Payment for himself, given that he had to stop working.

Golf reopened in Ireland, on a limited basis, in the middle of May, and Jonathan started back at that time and stopped claiming the Pandemic Unemployment Payment for himself. He brought his Assistant back when activity began to increase on the easing of travel restrictions in June, at which time he stopped claiming support under the Wage Subsidy Scheme.

During July, August and September, golf proved popular as one of the first participation sports to be allowed, and although this kept Jonathan busy, general trading continued to be adversely affected as a result of COVID. Distancing and other safeguarding measures impacted on footfall in his shop, golf club hospitality restrictions meant fewer members and visitors on site and people generally concentrated their spending on essential shopping.

Despite that, Jonathan continued to trade at what he considered to be a reasonable level, working long hours and welcoming members and visitors to the facility. It therefore came as a shock when Ireland was placed back in lockdown from midnight on October 21, with just two days’ notice.

Consequently, golf has again ceased, hospitality has been mothballed and non-essential retail has had to stop.

Jonathan realised he would again need to seek government support, but he understood that the type and level of support had changed since the original days of the pandemic.

He quickly confirmed that the main support now available to him would be the Employment Wage Subsidy Scheme (“EWSS”) which runs from 1 September 2020 to 31 March 2021 and replaces the earlier COVID-19 Wage Subsidy Scheme, and the COVID-19 Pandemic Unemployment Payment, the terms of which have also changed from earlier in the year.

Jonathan entered into discussions with his Assistant, whose average weekly earnings in 2019 and 2020 were €250 per week, on the best way to manage through the situation, and they have concluded that there are two options to be considered.

Firstly, if Jonathan lays the Assistant off as a result of the lockdown, the Assistant would be in a position, as an individual, to claim the COVID-19 Pandemic Unemployment Payment. At his level of average earnings, he would be entitled, under the current rates, to a weekly payment of €250. From February 1, 2021, this payment would fall to €203. In this situation, the Assistant would cease to be Jonathan’s employee.

Secondly, Jonathan could check whether he is able to register for the EWSS which, should that be the case, would enable him to access a flat rate subsidy and keep his Assistant on the payroll.

To confirm his eligibility for the scheme, Jonathan compared his likely turnover for the period July 1 to December 31, 2019 with his actual figures for July to September 2020 and his projected turnover for October to December 2020. Despite the sound participation levels in golf over the summer months, his turnover was significantly lower than last year, and with the current 6 week lockdown in the normally buoyant Christmas trade period, he has no difficulty in demonstrating a COVID-related reduction from his 2019 turnover well in excess of the 30% required for him to be eligible for the scheme.

His Assistant is considered to be an eligible employee since his weekly income is between €151.50 and €1462.

On balance, both Jonathan and the Assistant are keen that any lay off should be temporary rather than permanent, so Jonathan will register for the EWSS and recoup a subsidy of €203 per week. He intends to top up the Assistant’s wages to his current level, as long as finances allow. The Assistant will therefore be maintained on the payroll and his PRSI contributions will continue to be met through the payroll, with a reduced rate of 0.5% being applied to the employer’s contributions through the scheme . Jonathan knows that he will need to check his turnover figures at the end of each month to confirm that he still qualifies for the EWSS, and deregister should his turnover grow to more than 70% of last year’s level.

The Assistant will not qualify for a social welfare payment through the COVID-19 Pandemic Unemployment Payment since Jonathan has implemented the EWSS.

Having concluded on how best to deal with his Assistant, Jonathan had to consider his own financial situation. As a self-employed person, not an employee, he is not eligible for inclusion in the EWSS.

However, because he has again had to stop working from October 22 due to COVID-19, Jonathan is likely to be eligible for the COVID-19 Pandemic Unemployment Payment from that date. Since in normal times Jonathan draws more than €400 each week for his own use, he is likely to qualify for a weekly payment under this scheme of €350 per week, applicable until January 31, 2021. In February 2021 the payment will drop to €250 per week.

Jonathan therefore decided to make an application for the COVID-19 Pandemic Unemployment Payment on-line through www.mywelfare.ie and has recently been advised that his application has been approved.

In summary, at this time Jonathan can take advantage of the Republic of Ireland government’s Employment Wage Subsidy Scheme as a method of keeping his Assistant registered as an employee and the COVID-19 Pandemic Unemployment Payment for himself, given that he has had to stop working.