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Notice to Self-Employed Persons - COVID Wage supplement: SSC Implications

Publication Date: May 20, 2020
1. COVID Wage Supplement for Self-Employed Persons
The wage supplement (€800 or less according to eligibility) is the government’s contribution to self-employed persons whose businesses have been negatively affected by the Covid-19 pandemic.
This supplement is replacing or supplementing the normal income of the self-employed hence it is taxable in the hands of the recipient.
2. SSC Implications for Self-Employed Persons
Government will give €800 (or less according to eligibility) to each eligible self-employed person though it will retain 10% SSC (€80 or less) as prepaid SSC.
The self-employed person will have to calculate what is due in totality to the Commissioner for Revenue at the normal SSC rates for all the weeks covered by the respective SSC instalment and deduct therefrom the amount of SSC prepaid to CFR.
3. Example
A self-employed person paying Class 2 SSC at the SA rate would be liable to pay €30.77 x 17 weeks, i.e. €523.09 for the period January to April. From this amount one will deduct the 10% withheld from the supplement (e.g. €80 on a wage supplement of €800) and pay the difference,
i.e. €523.09 - €80 = €443.09

4. Employed Persons who are liable to pay Class 2 SSC
As stipulated by the Social Security Act, certain employees may be liable to pay Class 2 rates even though they are employed persons (this relates to specific individuals, such as certain directors).  The employer may be eligible for the wage supplement grant on behalf of these persons where the 10% SSC shall be retained and treated as prepaid.
The payment of the Class 2 contributions shall be calculated and treated as explained in point 2 above.
The emoluments earned and tax paid are required to be declared on the relative FSS forms, however the SSC (being Class 2) requires to be omitted from such forms in line with the usual procedure.