Increase in jobseeker's benefit on cards as PUP phased out

Social protection minister Heather Humphreys said that people who lose their jobs 'don't want to see that cliff-edge income drop'. Picture: Gareth Chaney/Collins

The Government is looking at increasing the jobseeker's benefit rate to avoid a 'cliff-edge income drop', according to the social protection minister Heather Humphreys.

Announcing a raft of new measures today, including the phasing out of the pandemic unemployment payment, with a view to removing it by February, Ms Humphreys said her officials are looking at increasing the rates of other benefits.

"I think one of the things that we have learned from the pandemic is people suddenly lose their jobs, they don't want to see that cliff-edge income drop, because they have entered commitments commensurate with their income," she said.

"We do need to avoid that drop, and I think that's where we can look at, and I've asked my officials to look at pay-related benefit.

"I think that we need to do that. And as I said, my officials are looking at that specifically.

These supports are kept under review in terms of a changing situation regarding the pandemic, but I'm very hopeful."

People currently on the lowest rate of PUP at €203 a week will be transitioned onto jobseeker's benefit from September 7 under the new plans, with the other two rates cut by €50.

The package of supports announced today will cost almost €4bn, additional to the total current Government spend of €88bn.

More than €2bn is to be spent on the wage subsidy scheme alone.

The employment wage subsidy scheme (EWSS) will be extended until December 31, and a new business resumption support scheme (BRSS) for businesses with reduced turnover as a result of public health restrictions is to be implemented in September 2021.

The tax debt warehousing scheme will also be extended to allow the period where liabilities arising can be “warehoused” to be extended to the end of 2021 for all eligible taxpayers, with an interest-free period during 2022, and to include overpayments of EWSS in the scheme.

"We will be going beyond the expenditure provision made in the budget last October," said public expenditure minister Michael McGrath.

At this point in time we have, essentially, fully accounted for the Covid Contingency Fund, and the recovery fund that we provided for on Budget Day, and so we will be going beyond that."

Back on Budget Day last year, the forecast was a general Government deficit of €20.5bn, coming in at around 5.7%.

"So now we are adding to that, by virtue of the measures that we're announcing," said Mr McGrath.

"But it is firmly with a view to creating jobs and retaining existing jobs in the Irish economy, and so we think it is helpful towards that overall objective."

On the creation of jobs, the Taoiseach said the Government hopes to see 2.5m people in work by 2024, many in jobs in new areas of opportunity.

"There is enormous damage to be undone," said Micheál Martin.

Mr McGrath said he believes Ireland will have a "broadly balanced budget by 2025, within the lifetime of the Government".

Finance minister Paschal Donohoe said Ireland must not only rebound, but recover.

"I believe a very strong rebound in our economy is possible in the second half of this year, but there is a difference between the rebound and recovery," he said.

There is a difference between a recovery that is sustained that leads to a fall in unemployment later on this year and throughout all of 2022.

"So, a rebound is the first vital step in recovery — but it isn't equal to all of the recovery.

"At the heart of how we can recover our national finances is getting our country back to work. That is an immense project that we are making progress on that we're going to complete."