Minister Humphreys announces €2.3 billion expenditure on income and employment supports as part of the July Stimulus Package

Pandemic Unemployment Payment extended until April 2021 at an estimated cost of €2.2 billion – approximately €380 million above standard jobseeker rates

Payment rates to be gradually tapered based on linking payment to prior employment earnings

€112 million expansion in employment services and supports – 45,500 new places on schemes and services

The Minister for Social Protection, Heather Humphreys TD, today welcomed the publication of the July Jobs Stimulus, saying:

“100,000 people have returned to work over the past fortnight. This package of measures seeks to build on this momentum and provide added impetus to the recovery now underway. We want to back our workers, back our small businesses and back those people whose jobs are slow to return and who need help to move to new employment.”

Background

In response to the crisis the government introduced a range of income, employment and business support measures including the COVID-19 Pandemic Unemployment Payment and the Temporary COVID-19 Wage Subsidy Scheme to cushion the income shock experienced by workers and their employers. These income supports, which were mobilised quickly and implemented on a large scale, have proven to be effective in maintaining incomes and insulating people against a sudden and severe income shock.

It was announced in May that the Pandemic Unemployment Payment, originally intended to close on 9 June would be extended to 10 August and that a new earnings-related payment level for people who earned less than €200 (gross) per week would be introduced in June.

July Stimulus

As part of the July Stimulus the Pandemic Unemployment Payment will now be further extended to April 2021 and the payment rate will be tapered over that time by introducing a new earnings-related payment rate of €250 and reducing the headline payment rate to €300.

From 17 September there will be three rates of payment:

For people who previously earned under €200 per week	€203
For people who previously earned between €200 and €300 per week	€250
For people who previously earned more than €300 per week	€300

The payment rates will be further calibrated in February and April next year to taper back to the standard jobseeker payment of €203 from April 2021.

The Minister noted that:

“The Pandemic Unemployment Payment was introduced as an emergency payment in response to the COVID-19 pandemic. It has proven to be highly effective and undoubtedly played a key role in securing and sustaining public support for the restrictive public health measures.

“However as the economy re-opens what was necessary and what worked in March needs to be refined now to take account of the present situation. The public health restrictions are being gradually lifted and as they are lifted more people have the opportunity to go back to work.

"In that context, while a flat rate payment set at the level normally paid to a two-person household was a necessary element of a scheme introduced as an emergency measure, it is not sustainable or necessary into the longer-term. We are changing it to make it fairer and more affordable so that we can extend the scheme itself into Spring of next year and continue to help people still out of work with a strong income support.”

In addition to introducing a new payment band and tapering the payment rate of PUP the Minister emphasised the investment she is making in expanding the State’s employment support measures.

The Minister said:

“Although many people are now returning to work I am acutely conscious that many businesses may not be able to re-open to the same level of activity as they enjoyed before COVID-19. Unfortunately, some may not be able to re-open at all. This is of huge concern to me.

“People who lose their jobs and remain unemployed for some time can become disconnected from the labour market. They lose the vital social and work connections that are needed to identify and pursue work opportunities, they find that their past work experience and skills can’t easily translate into new sectors of employment. They find employers tend to favour people with recent work experience over those with an employment gap in their CV. We have a responsibility to help them overcome these barriers and to do so we need to invest in our employment, training and education services.”

Changes made to the State’s employment and training services infrastructure, implemented in response to the financial crisis, position Ireland to respond favourably to the economic challenges that face us today. Nevertheless, given the unprecedented scale of job losses due to COVID-19, the Minister has secured an additional €100 million in funding, in addition to the €12 million already secured in June, for a significant ramping up in the delivery of employment services to workers.

This funding will be used to:

expand the paid Work Placement and Experience Programme/Youth Employment Support Scheme - to extend the duration of the scheme and to increase the number of places and make them available not just to young people but to all workers who remain unemployed
enhance Public Employment Service (PES) capacity across the INTREO system including contracted services to ensure that all unemployed jobseekers have access to an employment advisor/case officer
improve and extend the recruitment subsidy for employers who hire people from the Live Register – the subsidy will be payable to employers when they recruit people who are getting the Pandemic Unemployment Payment, with special provision for the early recruitment of people aged under 30 (currently this provision is limited to people aged under 25)
extend the training grants scheme to increase the maximum grant payable to jobseekers to fund participation in a job-relevant short training course from €500 to €1,000
extend access to the Back to Work Enterprise Allowance Scheme and the Back to Education Allowance scheme to people getting the Pandemic Unemployment Payment
increase the number of places on State Employment Schemes such as Community Employment and TÚS to provide occupational activity and employment experience to people receiving the Pandemic Unemployment Payment or a Jobseeker’s payment during the recovery period
support self-employed sole traders/micro-enterprises with a grant of €1,000 to help with the costs of restarting their enterprise when they move off the Pandemic Unemployment Payment. (This grant was previously confined to people setting up new businesses)
the department will also work with the Department of Finance to develop and implement a new short-time working scheme, using the wage subsidy model, to support job retention and help workers and employers in situations where demand for a firm’s services or products is reduced for an extended period of time

The measures are intended to provide an inclusive pathway back to employment, ensuring that no one is left behind in the recovery phase.

Minister Humphreys concluded:

“These measures are just a start – we will continue to review progress and as necessary, this government will invest more resources to help our people and our communities not just to recover but to get stronger and to prosper in the years ahead. This is an agenda that will be driven and adapted in the months ahead.”

ENDS

Notes for Editors

1: Changes to PUP

the PUP was due to close on 10 August. This is now being extended to April 2021 at a cost of €2.24 billion – this provides a valuable income support to people over the next period as we transition from re-opening to recovery
the payment rate will be gradually tapered in the period between now and April 2021 by linking the payment rate more explicitly to prior earnings and through a reduction over three steps back towards the standard jobseeker rate
this phased approach will enable people to adjust and will give them the additional time to secure employment as the economy continues to re-open and recover
as a first step, from 17 September 2020:

- the scheme will close to new applications

- the headline rate of payment will reduce from €350 to €300

- a new payment rate of €250 will be introduced for people who previously earned between €200 and €300 per week when in employment

the people moving onto the €250 rate will still receive between 83% and 125% of prior earnings and on average 105% of prior earnings
any person on these new rates of payment will be eligible to apply for the standard jobseeker’s payment rate, which for a two-adult household with one child is €377.70 per week
further changes will be made in February 2021, again linked to prior employment earnings (Table overleaf)
the total cost of the payment, if modified as proposed, between now and April 2021 is estimated at about €2.24 billion. This is about €380 million more than would be paid out at standard jobseeker rates (that is, if the scheme was closed as planned in August)

PUP Changes

three income related rates: €203, €250, €300 to take effect from September 2020
taper payment back to €203 for all groups in stages over the period from September 2020 to April 2021, starting with the reduction in the existing €350 rate to €300
close PUP to new claimants from 17 September

Stage 1: From 17 September 2020 to 1 February 2021

Prior earnings	PUP rate	% of recipients as at 17 July	Change in payment
Under €200 per week	Standard jobseeker rate of €203	19%	No change
€200 to €300	€250	23%	Go from €350 to €250. Reduction of €100 but receiving between 83% and 125% of prior earnings – On average 105% of average prior earnings
Over €300	€300	58%	Go from €350 to €300. Reduction of €50; but receiving 65% of average prior earnings

Stage 2: From 1 February 2021 to 1 April 2021

Prior earnings	PUP rate	% of recipients as at 17 July	Change in payment
€200 to €300	Move to jobseeker payment (€203)	23%	Go from €250 to jobseeker rate. Reduction of €47*; but receiving between 101% and 68% of prior earnings. On average 85% of prior earnings
Over €300	€250	58%	Go from €300 to €250. Reduction of €50; income reduced to 51% of average prior earnings

*Based on move to JA rate of €203. JB rate is income-related and €159 for this cohort.

Stage 3: From 1 April 2021: The remaining cohort of PUP recipients will be required to apply for the standard jobseeker payment in the normal way (i.e. PUP will be closed).

Employment Support Measures

Detail of Measure	Estimated No of extra Places	Total (2020/21)
Work Placement and Experience Programme: Expanded Youth Employment Support Scheme/work placement programme for jobseekers unemployed for over 6 months.	10,000	€30 million
Short Term Specific Skills Training: Extend the Training Support Grant to help people participate in short courses such as HGV, SNA, SAFE pass, and so on, and increase the maximum value of the grant from €500 to €1,000	12,500	€8 million
Job Search Advice and Assistance: Enhance Public Employment Service (PES) capacity across INTREO system, including contracted services.	N/A	€43 million
Enhance Recruitment Subsidies: Enhance the JobsPlus recruitment subsidy paid to encourage employers to hire people from the Live Register - increase the ‘youth’ age limit from 25 to 30 years of age (with a 6 month duration of unemployment) with a subsidy of €7,500 payable over 2 years.	8,000	€7 million
Back to Work Enterprise Allowance: This is a demand led scheme that allows people establishing a self-employed business to continue to receive a jobseeker payment for the initial 2 years of trading. Additional provision to support jobseekers establish self-employment opportunities:	Subject to demand	€5 million
Back to Education Allowance: This demand led scheme enables people not already in education to return to education if they are unemployed. Access to the BTEA scheme is being extended to PUP recipients in light of the timing of the 2020/21 academic year	Subject to demand	€5 million
State Employment Schemes: State employment schemes provide unemployed people with occupational activity working in their communities on schemes	3,000	€2 million
Enterprise Support Grants: This extends access to the Enterprise Support Grant, of up to €1,000, usually paid to people setting up new businesses on the Back to work Enterprise Allowance Scheme, to people who are already self-employed but are in receipt of the Pandemic Unemployment Payment	12,000	€12 million
Total Stimulus Package	45,500	€112 million