Employment Law Update: Covid-19 Pandemic Unemployment Payment Scheme and Illness Benefit

As employers and employees face into changed circumstances as a result of Covid-19,  the government has introduced new social welfare measures to take effect immediately.

The situation remains fluid, with the guidelines being updated regularly. If you need specific advice around your obligations as an employer, you can get in touch at mail@jwod.ie.

The following is an overview of the current Covid-19 Pandemic Unemployment Payment Scheme and the Illness Benefit.

1 Covid-19 Pandemic Unemployment Payment Scheme

The Government has introduced the Covid-19 Pandemic Unemployment Payment Scheme, which is designed to cover the first six weeks of being out of work. Job-Seekers Allowance is not ordinarily payable for that period.

The €203 payment a week under this new scheme arises where the employed or self-employed become unemployed or have their hours reduced because of the impact of Covid-19. It is payable for six weeks during which time employees must seek the normal Job-Seekers Allowance. Currently, employers will not get Job-Seekers Allowance after the six week period. This will likely be reviewed by Government as matters progress over the coming period.

The scheme applies to those between 18 and 66 years of age and applies provided they have been in work. The claim is made by completion of a short form which should be submitted electronically and not be personal visit to the relevant Intreo office.

As part of the evolving Government response, employers are being requested to pay the €203 a week and seek reimbursement from the Government. On Wednesday the 18th March 2020, the Government announced the reimbursement scheme would be operated by Revenue on behalf of the Department of Employment Affairs and Social Protection. The up-to-date Revenue advisory to employers is payments made by employers under this scheme are not subject to tax, USC or PRSI. The amount paid by employers to employees and notified to Revenue will be reimbursed generally on a “next day” basis direct to the employers bank account.

Any refunds of income tax or USC that an employee may be entitled to receive due to being laid off will also be administered by the employer and again the employer will be reimbursed by Revenue through the scheme.

Revenue has issued guidance notes for employers and their ROS agents on its website.


The Government also introduced a recent change to entitlement to Illness Benefit increasing it to €305 a week for Covid-19- affected people only (normal non-Covid-19 Illness Benefit continues at €203 a week). To obtain Covid-19 Illness Benefit, the employee must satisfy the criteria of being medically certified to self-isolate or having received a medically confirmed diagnosis of Covid-19. If it is a medically approved self-isolation, the employee is paid enhanced Illness Benefit for two weeks and if a diagnosis of Covid-19 follows, then the payment continues for the duration of the illness.

An employee who unilaterally decides not to come to work, where work is available from the employer, does not qualify for the enhanced Illness Benefit of €305.

Article by David Pearson, Partner on J.W O’Donovan Solicitors’ Employment Law team.

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