No legal means to pursue companies who paid 'big dividends' and received Covid supports

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No Legal Means To Pursue Companies Who Paid 'Big Dividends' And Received Covid Supports No Legal Means To Pursue Companies Who Paid 'Big Dividends' And Received Covid Supports
Mr Donohoe said he would now examine the scheme, but he was conscious of two factors – he did not want to reduce the ability to help employees get back to work quickly, and he did not want to undermine the ability of companies to invest in their future. Photo: PA Images
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Vivienne Clarke

Minister for Finance Paschal Donohoe has said that he does not have the legal means to pursue companies that paid “big dividends” after receiving Covid-19 wage supports.

Entry to the scheme was dependent on turnover not profit, he told RTÉ radio’s Morning Ireland.

The only way that the Revenue Commissioners could pursue such companies was if they had breached the criteria for entering the scheme, he said. It had been accepted that it was likely that some companies would make a profit because of the supports which had kept people in jobs.

Mr Donohoe said he would now examine the scheme, but he was conscious of two factors – he did not want to reduce the ability to help employees get back to work quickly, and he did not want to undermine the ability of companies to invest in their future. However, he said that companies that had engaged in “egregious behaviour” would be dealt with.

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“Ultimately we want these companies to recover,” he said.

According to the Minister, the policy would help the country recover, and he hoped that it could be phased out in 2022. Companies that had paid out a dividend would be examined to see if they wanted to return some of the supports they had received.

The new “heightened” supports would continue until the end of January in line with public health regulations. Any change in supports would be dependent “on where we are with the virus.”

Mr Donohoe added” “We will get to a better place” at which stage the “exceptional level” of supports would decrease.

Refunding subsidy money

Last week, Tánaiste Leo Varadkar said companies who have recorded “substantial profits” or are in a position to pay “substantial dividends” should refund money they received through the Employment Wage Subsidy Scheme (EWSS).

He was responding to Labour TD Ged Nash during Leader’s Questions in the Dáil on Thursday.

Mr Nash raised the issue following a story published in the Irish Times about O’Flaherty Holdings which distributes Mercedes-Benz in Ireland. It is understood that the company claimed almost €1.8 million in wage subsidies in 2020 and separately paid a similar amount in a dividend to an offshore company.

A second story detailed how a US multinational, which has a State contract to run driver licence theory tests, paid a €1.25 million cash dividends to a company tax-resident in Malta in 2020. This was despite the company claiming Covid subsidies of more than €500,000 in the same period.

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Companies recording 'substantial profits' should r...
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Mr Varadkar said that he would not comment on specific companies, however, “where substantial profits are made by companies, or they find themselves in a position to pay dividends … it’s appropriate they should return that cash to the taxpayer”.

“I know some companies have done that in fairness, others have not, and I think they should,” he added.

Both the EWSS and the Pandemic Unemployment Payment (PUP) were “organised and designed in a hurry”, Mr Varadkar explained.

“We needed to get money out to workers and money out to businesses quickly.”

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