Key Features of Government’s New Stimulus Plan

As part of the new multi-billion COVID-19 National Economic Recovery Plan (the Plan) recently launched by Government, there will be a phased withdrawal of certain COVID-19 social protection supports. This includes the Pandemic Unemployment Payment (PUP). The Plan sets out how and when the reductions will take effect.

The Plan also sets out timeframes for the extension of the Employment Wage Subsidy Scheme (EWSS) and the COVID Restrictions Support Scheme (CRSS).

National Economic Recovery Plan

As businesses begin to reopen, the Government is focusing on getting people back to work. This involves a gradual reduction in COVID-19 supports for those who lost their jobs due to the pandemic. The Government aims to get to a position where Ireland exceeds pre-pandemic employment levels.

Changes to PUP supports

The PUP was introduced in March 2020, as a temporary measure to respond to the financial impact of the pandemic. It will be phased out in three stages from September 2021. This will allow time for businesses to recover and individual recipients to adjust to the reduction of the payment. The PUP will then be abolished in February 2022, almost two years after the payment was introduced. From September, the following three rates of payment will be introduced:

For existing recipients, the PUP will be extended beyond 30 June 2021 until February 2022. This is in recognition of the short term public health restrictions that may be in place. As the Government does not foresee any further COVID-19 related layoffs, the PUP scheme will close to new entrants from 1 July 2021.

Payments to full time students will cease once they return to education in September. Final payments in these cases will be made on 7 September 2021.

Individuals currently receiving the €203 rate, and those who reach the €203 rate in each phase, will then transition to standard Jobseeker’s Benefit rates.

Business Supports

The Government has also announced a range of measures to help businesses reopen as restrictions ease. This includes the extension of additional business supports until later this year.

EWSS

The Employment Wage Subsidy Scheme (EWSS) will be extended from 30 June until 31 December 2021. The current payment rates will continue from July until September of this year. Q4 rates are yet to be announced. The conditions will also be changed to make it simpler for employers to qualify for the scheme. To widen eligibility for the scheme, the time period for assessment will be increased from 6 months currently, to 12 months.

Rates

Commercial rates will be waived for a further three months until the end of September 2021. The reduced VAT rate of 9% for tourism and hospitality sectors will now be extended until 1 September 2022.

CRSS

The weekly COVID Restrictions Support Scheme (CRSS) payment will continue until the end of the year. This is paid to businesses that are severely affected due to the pandemic. For businesses reopening in June and July and coming off the CRSS, there will be an enhanced restart payment of three weeks at the double rate of payment, up to a maximum of €30,000.

Business Resumption Support Scheme

A new scheme will start in September this year for businesses whose turnover is reduced by 75% between 1 September 2020 and 31 August 2021, as compared with 2019. It is expected that these businesses will receive a further grant in the autumn.

Redundancy Moratorium

The right of an employee to trigger a redundancy claim following a period of layoff or short time work due to the pandemic was temporarily paused in March 2020. This was most recently extended until 30 June 2021. This moratorium has now been extended for a final time until 30 September. Employers should note that once this is lifted, eligible employees will be permitted to make a claim for redundancy.

Businesses that continue to experience financial hardship related to the crisis, and are unable to pay for redundancies will be able to avail of Government funded financial supports. The specific details of the supports are yet to be confirmed.

Conclusion

The total cost of the packages announced is estimated to be worth more than €3.5 billion. The extension of business supports will be welcomed by employers as they prepare to reopen in the coming months.

For more information on the above supports or if you would like to discuss the continuing impact of COVID-19 on your business, contact a member of our Employment & Benefits team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.