PUP Closes and Changes to Economic Supports for Businesses Announced

The Government has today approved future plans for the Pandemic Unemployment Payment (PUP) and has announced changes to the economic supports for businesses most impacted by recent public health restrictions

(21/1/22)

The new arrangements agreed for the PUP scheme are as follows:

• PUP will close for new applications on 22 January 2022 in line with the Government decision to lift restrictions.
• With effect from 8 March 2022, anyone still in receipt of the PUP will move to a weekly rate of €208. This represents a four week extension on what was previously announced.
• PUP recipients will start transitioning to standard jobseeker terms, and if eligible, will move onto a jobseeker payment effective from 5 April 2022.

Speaking today, Minister Humphreys said:

“The Pandemic Unemployment Payment has been an absolutely vital support for workers and their families.

“What was originally intended to be just a six week short-term payment will now last for over two years with over €9 Billion in payments issued to workers.

“In line with the widespread lifting of restrictions from tomorrow, the Government has today approved plans for the winding down of the PUP over the coming months.

“The decision to lift restrictions represents a hugely positive step which will see tens of thousands of people return to work over the coming weeks as the country begins to return to normal.”

Changes to Business Supports

Also in other news for businesses, the Minister for Finance, Paschal Donohoe has today (Friday) announced changes to a number of the COVID support schemes available to businesses, in particular for those businesses that were most severely impacted by the public health regulations introduced last December.

An extension to the Employment Wage Subsidy Scheme (EWSS) to support those businesses and a number of clarifications in relation to the Covid Restrictions Support Scheme (CRSS) and Tax Debt Warehousing Scheme were agreed by Government at the Cabinet meeting today.

The legislative aspects associated with these changes will be addressed by primary legislation to be introduced in the coming weeks. In the meantime Revenue will update its guidance on each of the schemes shortly.

EWSS

As part of Budget 2022, the government set out the future direction of EWSS including its graduated exit strategy. These arrangements were subsequently enhanced in response to the public health situation, namely the extension of the enhanced rates of subsidy for a further two months (across December 2021 and January 2022) and the reopening of the scheme for certain businesses as announced on 9 and 21 December 2021 respectively.

The government agreed today that businesses availing of EWSS that were directly impacted by the public health Regulations introduced last December, will receive additional support under the scheme for a further month to assist these businesses as they fully reopen and emerge from the restrictions.

Such businesses will continue to receive the enhanced rates of subsidy for the month of February and the graduated step-down in subsidy rates, as previously announced, will be delayed by one month with such firms continuing to receive support under the scheme until 31 May 2022.

From 1 February 2022, most businesses, apart from those that were directly impacted by the public health restrictions of last December, will move to the reduced rate of support of €203 per employee, followed by the flat rate subsidy of €100 per employee for the final two months the scheme of March and April 2022.

It should be noted that the full rate of Employers’ PRSI will be reinstated with effect from 1 March 2022 for all businesses, as announced in Budget 2022 and legislated for in the Social Welfare Act 2021.

Tax Debt Warehousing Scheme

In relation to the Tax Debt Warehousing Scheme, and the decision by Government last month, to extend the period where tax liabilities arising can be warehoused to the end of Q1 2022, for all taxpayers eligible for COVID-19 support schemes, it has now been agreed that this date will be extended to 30 April 2022 to facilitate the two monthly VAT return for March/April.

CRSS

A number of clarifications were noted in relation to the CRSS as follows:

as provided for under the scheme, an extra week, will be paid to businesses the week after the restrictions are lifted as an additional support to businesses as they reopen fully

for newer businesses established during the period 13 October 2020 to 26 July 2021, the turnover from the date of commencement up to 1 August 2021 will be used for the purpose of calculating average weekly turnover

certain charities and sporting bodies that operate a hospitality/indoor entertainment business activity from their business premises, who meet the revised qualifying criteria of the scheme, are eligible to apply for the CRSS for the most recent period of restrictions (20 December 2021 to January 2022)

The Minister for Finance, Paschal Donohoe TD said:

“Today is an important day for our society and economy as we seek to ease the public health restrictions and reopen all sectors of our economy. The EWSS has been extremely successful in maintaining employment across the whole of our economy during this pandemic.

"It is now time to adjust our focus towards an exit from the scheme in a structured and orderly way. This is important in everyone’s interests - businesses, employees, the wider body of taxpayers – as the scheme cannot continue indefinitely. As such, most businesses will move to the reduced rates of EWSS subsidy from the 1st February 2022 onwards and continue on the exit path as previously announced until the scheme closes on 30 April 2022.

"However, I intend to provide additional support to those businesses that were directly impacted by the most recent public health regulations. Affected businesses will continue to receive the enhanced rates of support for a further month and the exit path from the scheme for such businesses will be delayed by a month.

"CRSS has been an important and successful support payable at times when businesses most needed additional help with their fixed costs, and has provided some €717 million in direct payments in respect of over 25,000 business premises since its introduction and over €13.4 million in payments to businesses directly impacted by the latest public health restrictions in place since 20 December.

"The facility to avail of the Tax Debt Warehousing Scheme has also offered valuable and practical liquidity support to businesses in difficult trading periods during the pandemic. The objective of this scheme is to allow firms some help to recover, thereby helping to guarantee their long-term economic viability and survival. This further extension will allow businesses who have been most impacted some additional time to recover before their tax liabilities have to be paid. Their period of zero interest will continue until 30 April 2023, with interest at the reduced rate of 3% p.a. payable thereafter until the debt is paid down."

Find official sources here;

https://www.gov.ie/en/publications/