Government agrees to extend Credit Guarantee Scheme and redundancy provisions
- December 4, 2020
- Jonathan Earl
- Comments Off on Government agrees to extend Credit Guarantee Scheme and redundancy provisions
The government last week (Tuesday 24 November) agreed to extend two measures which were brought in to help businesses during the pandemic. The COVID-19 Credit Guarantee Scheme (CGS) will now stay open for new applications until 30 June 2021. The suspension of redundancy provisions relating to temporary lay-off and short-time work, which arose as a result of COVID-19, will be extended until 31 March 2021. The government also agreed to fund outstanding applications to the now closed Restart Grant Plus Scheme.
The €2 billion COVID-19 Credit Guarantee Scheme (CGS), launched in September 2020 was brought in to provide low cost loans to businesses from €10,000 to €1 million. The Scheme was originally due to close at the end of the year, but with an average of 180 businesses now drawing down loans each week, applications will remain open for another six months. This extension has been made possible due to a change in the rules under state-aid at EU level.
The suspension of the redundancy provisions has been extended until 31 March to help avoid further permanent job losses at a time when some 350,000 people are in receipt of the Pandemic Unemployment Payment (PUP) and 41,200 employers have registered for the Employment Wage Subsidy Scheme (EWSS).
The government agreed an extension of the end-date was required as crystalising a large number of redundancy claims now could cause hundreds of businesses to fail thus causing even more jobs to be lost. It also means that the redundancy extension date will be aligned with the date on which the PUP and EWSS is due to end.
The government also agreed to fund outstanding applications to the closed Restart Grant Plus Scheme, which has now been replaced by the Covid Restrictions Support Scheme (CRSS). The government has approved a total of €685 million for over 117,000 applications, at an average payment of €5,800, since the scheme was launched in May. Approximately 11,000 applications are outstanding to the Scheme and the government has allocated a further €33m to meet this cost.
NB – This is a guide for information purposes only and does not constitute legal advice. If you have an issue requiring legal advice, please contact any of the team at Nolan Farrell & Goff, whose numbers can be found on our website, www.nfg.ie