Ireland to phase out some COVID-19 fiscal supports, extend others

Ireland will begin to gradually phase out temporary coronavirus-related jobless payments later this year while maintaining other income and business supports as the economy fully reopens, Public Expenditure Minister Michael McGrath said on Tuesday. McGrath said he expected that cohort to fall very significantly over coming weeks as the economy reopens. He added that additional supports for businesses reopening would be announced later on Tuesday.

Ireland will begin to gradually phase out temporary coronavirus-related jobless payments later this year while maintaining other income and business supports as the economy fully reopens, Public Expenditure Minister Michael McGrath said on Tuesday. Ireland is emerging from its third and longest lockdown having had one the strictest regimes in Europe for the last 15 months, leaving more than 300,000 people who lost their jobs claiming the Pandemic Unemployment Payment (PUP).

Local media reported that the PUP, which is paid out at a higher rate than regular jobless benefits, would be reduced from September and withdrawn by February 2022. "There won't be a cliff edge in July, we will be looking at an extension of the PUP but also laying out a pathway towards the normalisation of our social welfare code and ultimately unwinding a payment that is pandemic related," McGrath told national broadcaster RTE.

"The changes will be gradual." The number of people temporarily or permanently unemployed in Ireland stood at 22.4% at the end April, with around three in four on the PUP. McGrath said he expected that cohort to fall very significantly over coming weeks as the economy reopens.

He added that additional supports for businesses reopening would be announced later on Tuesday. The government allowed all shops to open for the first time this year two weeks ago with the hospitality sector to follow with limited capacity in coming days. A wage subsidy scheme, which is supporting around 300,000 workers, will also be extended, McGrath said. Ministers are considering an extension to June 2020, the Irish Independent newspaper reported.

Ireland will also lay out how it will spend its 1 billion euro portion of the EU's 750 billion euro fund to help member states recover from the pandemic. This will be focused on a low-cost loan scheme to retrofit homes and "massive investment" in retraining schemes, McGrath said.

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