The July Jobs Stimulus Package – Key Points for Employers
In this article, we review the Government's July Jobs Stimulus package and the most important issues for employers.

 

The Government recently published its eagerly awaited July Jobs Stimulus package. The package totalling €7.4bn represents the largest single economic stimulus in Irish history. In addition to attempting to stoke consumer confidence, the package seeks to preserve and bolster the position of employers and employees following the economic impact of COVID-19. The central aim of the package is "keeping people in and getting them back to work". It is estimated that two-thirds of the funding will be spent in 2020, with the remaining one third in 2021. 

Increased Government Support for Employers and Employees

Two key aspects of the package are the reforms to the Temporary Wage Subsidy Scheme (TWSS) and the Pandemic Unemployment Payment (PUP), both of which have played critical roles in sustaining incomes through the worst stages of the COVID-19 crisis. We reported on the mechanisms of both schemes in June.  

New EWSS to replace the TWSS 

The TWSS, which served as an income replacement measure since March 2020, will be replaced by a payroll support service entitled the Employment Wage Support Scheme (EWSS). A significant policy development, the new EWSS will commence on 1 September 2020 and is currently intended to run until April 2021.

Under the new scheme, businesses who have seen their turnover fall below 30% or more will receive a flat-rate state subsidy of €203 per week per employee earning over €203 per week and €150 per week per employee earning below that level. The EWSS is expected to support around 350,000 jobs including seasonal workers and new hires. New companies operating in sectors which have been badly affected by the pandemic will also be eligible. The scheme is set to cost the State €2.3bn. 

A new, three-tiered PUP

The PUP, currently available at either €350 or €203 per week, has been extended until 1 April 2021. PUP rates will be amended from 17 September 2020. The payments will gradually reduce over time bringing them in line with existing social welfare levels. The rates per week will be as follows: 

  • €203 for those who earned less than €200 before the pandemic;
  • €250 for those who earned between €200 - €300 before the pandemic; and
  • €300 for those who earned over €300 before the pandemic. 

The PUP payment will revert to the standard jobseeker payment of €203 per week in April 2021. The PUP scheme will be closed to all new applicants from 17 September 2020. The Dáil has passed the Social Welfare (COVID-19) (Amendment) Bill 2020, which seeks to put the PUP on a statutory footing. The bill is now progressing before the Seanad.

Job Creation, Upskilling and Reskilling – A New Type of Economy 

The stimulus package includes a €200m investment in skills development, work placement schemes, recruitment subsidies, job search assistance measures and education and training. Standout new measures include the following: 

  • a €2,000 apprentice hire payment to support employers in taking on new apprentices in 2020 under a new Apprenticeship Incentivisation Scheme;
  • the provision of 10,000 additional work experience scheme places for those over six months unemployed;
  • eligibility for the JobsPlus recruitment subsidy is extended to those under 30 years old on the live register or on the PUP;
  • 19,000 places on the Government's Skills to Compete programme will be provided. The programme supports people in developing skills and attaining qualifications in emerging growth sectors and occupations; and
  • €10m will be provided to support businesses engaging in green research, development and innovation, capital investment, and capacity building, through the first phase of a new Green Enterprise Fund. 

The capacity of the public employment service will also be increased in order to support jobseekers through job search advice and assistance. 

Next Steps 

The Government announced that further steps will be taken to support Irish businesses in Budget 2021. This will be accompanied by a national economic plan, documenting Ireland's long-term jobs recovery pathway. 

For full details of the July Jobs Stimulus, please click here.

We will continue to keep you updated on developments through our dedicated COVID-19 Hub

If you have any specific queries in relation to COVID-19, please get in touch with your regular William Fry contact. 
 

 

Contributed by Ruth Fahy, Darran Brennan

 

 

Key Contacts

Ailbhe Dennehy Partner

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