Withdrawal of Pandemic Unemployment Payments in €1bn recovery plan
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A €1bn economic recovery plan is set to be unveiled by the Government later today in an effort to get millions of people back to work.
The plan will set an ambitious target of having 2.5m people in employment by 2023 — higher than the pre-pandemic levels of employment — but will also see the winding down of the pandemic unemployment payment (PUP) for those who are out of work due to Covid-19.
The plan was agreed in principle last night by Micheál Martin, Leo Varadkar, and Eamon Ryan, and will be signed off by the Cabinet today.
Among the changes is that that the PUP will be closed to new applicants from July, and will be phased out completely by February, while students returning to third-level education in September will also no longer be eligible for the payment.
By mid-September, the top rates of PUP will be cut by €50 to €300 and €250, and there are plans to cut it further later in the year, despite stern warnings from charities, including St Vincent de Paul (SVP), that this could lead financial hardship for low-income families.
SVP has warned that the Government needs to "poverty-proof" the unwinding of supports, and Minister of State Joe O'Brien is among those who are advocating for a raise in the jobseeker's benefit and other welfare subsidies to tackle poverty.
The employment wage subsidy scheme (EWSS) is to be extended from June to September and will remain in place slightly longer than PUP to encourage people to return to work.
Businesses on the covid restrictions support scheme (CRSS) will receive an additional "bullet payment" to help businesses reopen. The equivalent of six weeks of the scheme will be paid to those exiting the scheme to replace the restart grant which was implemented last year.
The commercial rates waiver is to be extendedm and it has been confirmed the tourism VAT rate of 9% will be applied for 2021.
The plan, which has been in the works for months, will map out how to stimulate jobs growth and profitability for businesses that have been badly affected by a cycle of rolling lockdowns, and will include a focus on creating employment in digital and "green" sectors, creating more jobs in IT and sustainable energy.
More than half of the recovery plan is going to "green projects", including loan guarantees for retrofitting, public transport and other projects.
The plan is made up of four pillars:
- Sustainable public finances;
- Helping people back into work;
- Rebuilding sustainable enterprises, and
- A balanced and inclusive recovery.
The plan will include a €225m investment in the Department of Further and Higher Education, with €40m for a transformation fund for Technological Universities across the country, and €70m for research projects in the area of climate action and digital infrastructure.
The biggest pot of money will be for Solas and continued investment in skills, as upskilling and reskilling will be essential for those whose jobs are unlikely to return.
A new Green Skills Action programme will be launched including a new online green skills programme and an expansion of the retrofitting scheme to include an additional 5,000 people. There will also be training to help those in construction to make buildings more usable and sustainable in the context of an ageing population and for people with disabilities.
There will be targeted supports for those who have lost their job as a result of Covid-19 and are unable to return to their previous employment following the Covid-19 crisis, including new digital skills.
The main focus is "rapid recovery" which, sources say, will help avoid tax increases.
Reforms such as workplace sick pay, the living wage, and auto-enrolment into pensions all feature in the plan.
The Minister for Public Expenditure Michael McGrath said that it is important the country moves to “a more normal social welfare system”.
Mr McGrath said the Government is “deeply conscious” of how important the pandemic supports are for people, which is why changes will be made in a gradual way.
He said that it must be remembered that there are people on a basic social welfare rate that is “considerable lower than the current rate of PUP”.
“If you lost your job in January or February of last year, for example, you're on a considerably lower core weekly social lever rate.”
Mr McGrath told RTE's Morning Ireland that what will be announced today “strikes a fair and proportionate balance”.
He expects the number of people on PUP to fall significantly in the coming weeks as society and businesses reopen.
“The focus is on helping people to get back to work.”