Covid support schemes enhanced as Level 5 looms

Covid support schemes have been enhanced to try to safeguard livelihoods in response to the stepping up of restrictions to the highest level.

After Tuesday night's announcement by Taoiseach Micheál Martin that the entire Republic would enter level five the Cabinet approved revisions to rates paid under Employment Wage Subsidy Scheme (EWSS) to encourage retention of staff by employers.

Ministerial colleagues Paschal Donohoe (Finance), Michael McGrath (Public Expenditure and Reform) and Heather Humphreys (Social Protection) further expanded on the details surrounding the changes to the pandemic support schemes.

The changes are designed to ensure that, to the greatest extent possible, as many employees can retain the link with their employer, allowing them to return to the workforce at the earliest opportunity, and to give businesses the greatest changes of getting through the coming weeks.

The changes

In relation to PUP, the Government has introduced a fourth rate of payment for people whose gross earnings were €400 per week or higher prior to the pandemic.They will now receive €350 in their PUP payment each with the rate change taking effect for all new applications received since Friday, October 16.

Existing PUP recipients who previously earned more than €400 per week will have their PUP rate automatically increased and will receive the higher rate of €350 in next week’s payment run.

The other three rates of PUP payment (€203, €250 and €300) remain unchanged.

New applicants are being urged to apply online at www.mywelfare.ie

The Government has also announced that the rate of subsidy provided under the Employment Wage Subsidy Scheme (EWSS) has been revised to better support businesses dealing with Level 5 restrictions.

Broadly, the EWSS rates will be aligned with the rates of payment under PUP, up to €350 per week, effective from the next payroll date after October 19, as set out below.

Where the Covid Restrictions Support Scheme is concerned the qualifying turnover criteria for application to the scheme is now 25% of the turnover for the corresponding period in 2019. This will allow more business to access this support.

“Consistent with the revised health restrictions that have been announced by Government, a decision has been made to revise the pandemic supports that have been key to sustaining businesses and helping people to manage financially in the midst of this very challenging time,” Minister Donohoe said.

“The Employment Wage Subsidy Scheme is being enhanced, with a maximum rate now payable at €350, bringing it in line with revisions that are being made to the Pandemic Unemployment Payment.”

The objective of this move is to minimise the risk of migration from EWSS to PUP during enhanced level restrictions. To the maximum extent possible, the aim is to have as many as possible of the 350,000 employees currently on EWSS retain their link with their employer rather than become unemployed.

“Changes are also being made to the Covid Restrictions Support Scheme (CRSS) to allow a greater number of business to access the supports they need," said Minister Donohoe. “This will be crucial to getting our economy, and the businesses who drive it, back up and running when restrictions are lifted.”

In the relation the changes to PUP, Minister Humphreys stated: "The Government has had to make very difficult decisions that will impact on businesses and workers. Covid-19 is once again widespread in our community. We have therefore had to take the difficult decision to ask businesses to close once again in the interest of public health.

“The structure of PUP has changed significantly since it was introduced as a flat rate payment of €350 in March when it was initially intended to be only a six-week payment.

“The payment is now linked to a person’s prior earnings and will now have four earnings related bands. These changes ensure that PUP is fairer, more equitable and sustainable and have allowed Government to extend the payment until next April.

“The introduction of a new €350 rate of payment for persons who had prior weekly earnings of €400 will help to ensure that people do not see a cliff-edge drop in income.

“The new rate will take effect immediately for all new PUP applicants. Existing PUP recipients who previously earned more than €400 per week will have their PUP rate automatically increased and will receive the higher rate of €350 next week.

“We are asking everybody to apply for PUP online at www.welfare.ie. This is the quickest and easiest way to apply. By applying online, it will mean my Department will be able to process your claim faster and get payment to you quickly.

Also commenting today, Minister McGrath said: "The Government has at all times stated that it will implement the necessary measures to protect the lives and livelihoods of our citizens. The decisions the Government has announced will have implications for the public finances in 2020. This will involve significant additional spending on income and business supports and is definitively the correct course of action at this time. It will protect the economic well-being of families and give businesses the best possible chance of surviving this incredibly tough period. It is important to note that the expected deficit remains at the lower end of the forecast range we had envisaged in September of this year and a return to economic growth in 2021 will support our ability to reduce the deficit in a planned manner. The enhanced capital expenditure announced in the Budget will be of huge benefit in this regard.”

He added: "It is estimated that increased spending on the enhanced Pandemic Unemployment Payment (PUP), Employment Wage Subsidy Scheme (EWSS) and the new Covid Restrictions Support Scheme (CRSS) combined with falls in tax revenue over the next 6 weeks could amount to a further €1.25 billion, on top of what had already been provided for. This will bring our deficit from -6.2% of GDP to -6.5% for 2020.

“Due to the careful management of our finances in recent years, we are equipped to meet the challenges presented to us by Covid 19. And we will.”