The Revenue Commissioners have issued some recent welcome clarifications about certain provisions of the Government’s temporary wage subsidy scheme.
Application for the Subsidy Scheme – An Admission of Insolvency?
The main provisions of the subsidy scheme are set out in Section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020.
That section also contains the criteria for an employer’s eligibility to avail of the subsidy scheme. One such criterion is that:
“…the business of an employer has been adversely affected by Covid-19 to a significant extent with the result that the employer is unable to pay to a specified employee the emoluments the employer would otherwise have normally paid to him or her”.
Concerns were raised that this criterion (i.e. an inability to pay employees’ wages) was in effect tantamount to an admission that the business was trading while insolvent. This then raised fears that company directors of businesses who availed of the subsidy scheme could potentially face issues in relation to allegations of fraudulent or reckless trading.