Staycation tax rebates and Covid-19 payments extension central to July stimulus package

Staycation tax rebates and Covid-19 payments extension central to July stimulus package
Queues at Intreo offices in Co Wicklow as people apply for Covid-19 unemployment payment. Picture: Garry O'Neill

The temporary wage subsidy scheme and the pandemic unemployment payment (PUP) will be extended until April.

The emergency measures brought in at the start of the Covid-19 pandemic are both due to be extended until spring next year — five months longer than previous indications.

The measures are to be revealed in the Government's July stimulus package later this week in a multi-billion euro plan to salvage Ireland's economy.

Government sources say the move was prompted by the acceptance that "Covid-19 is going to be around a lot longer than this year", meaning essential measures must be in place to prevent people from falling into further unemployment or debt.

The PUP will be tapered over time, with the €350 per week top rate cut by €50 "in the autumn", and will be further reduced over nine months until it reaches €203 a week — the current jobseekers' allowance rate — in April, according to a senior source.

Sources say there is an "emphasis on shovel-ready projects and revising existing grants", as well as the stimulus incorporating a "return to schools".

The July stimulus is focused "almost solely" on jobs, according to Government sources, as the coalition believes creating new sources of employment will be the main mechanism to avoid a deeper recession. 

Some 35,000 new apprenticeships are to be made available to people, with a particular focus on retraining parts of the Irish workforce that may not return. 

One source said that it is essential that "people in their 40s and 50s" who may have lost their job during the lockdown are retrained to find new employment.

Hospitality and tourism, which has borne the brunt of the pandemic, will see measures implemented to help their sector until 2022.

Tourism rebates for staycations formed a major focus of the July stimulus plan. Picture: Pexels
Tourism rebates for staycations formed a major focus of the July stimulus plan. Picture: Pexels

It is understood that Revenue will run this initiative, which will be operated through a smartphone app that scans receipts, and may include hotel breaks and restaurant meals. 

It is understood the 2022 date was chosen as many Irish hotels are already booked out for this season due to the increase of demand for Irish hospitality and lack of foreign travel available.

Entertainment support packages, grants for musicians through local authorities, TV production funds, and subsidies for sport centre buildings are among other parts of the stimulus package.

Culture minister Catherine Martin has secured over €300m for sectors under her department — money which, it is hoped, will trickle down to professionals left behind by the pandemic.
A special entertainment grant will be set up for festivals or theatre productions that will fund shows and events if the pandemic continues to prevent programmes going ahead this year or next.

Údarás na Gaeltachta and areas in the West of Ireland in particular will also get a multi-million euro fund to repurpose buildings, while hotels, B&Bs, and event centres will get similar monies to create alternative play and activity areas for consumers due to virus fears.

Other commercial businesses will be able to avail of a €2bn credit guarantee scheme, increased business reopening grants, and an extension of the commercial rates waiver. 

An additional €250m has been allocated for the Restart grant scheme, as part of a wider €6bn package for business divided between grants, stimulus, and tax rebates.

A total of €220m for additional capital funding will be allocated to the Department of Health for capacity expansion and investment in new ICT.

"The IT system needs to be overhauled, it's to embed things like e-prescriptions," a source said.

"At the minute, the health service is working off desktops most people would have put in the bin long ago, so better IT systems mean more efficiency, and enable better handover.

"Capital health funding also includes renovations, extensions, and modular builds. It's hoped the funding will improve the bed capacity and modernise the system."

Funding for the Department of Education is still under negotiation and has seen hours of "intensive discussions".

"There will be increased provision for PPE and cleaning," a source said.

It is understood that additional supports in special education schools are to be increased for returning in September. 

A works programme for all schools, allocating grants to do new building projects, refurbishment, repairs, and renovation in order to create jobs for local contractors and small businesses, including internal classroom reconfiguration and installing screens, will also be announced.

"It's a jobs stimulus, so things like capital work will be funded, the Government are looking at construction jobs first and foremost," a source said.

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