Joe O'Brien (Dublin Fingal, Green Party) | Oireachtas source

I thank Deputies for some very useful inputs on these important relevant supports. As outlined by the Minister, I assure this House and the other House that the Government is fully committed to supporting people at this difficult time.

At the onset of the pandemic, the previous Government was quick to take action and introduce the range of measures initially intended for a 12-week period to support people and businesses to cushion the sudden and severe income shock that the pandemic brought. All the available data from the CSO, the ESRI and the Central Bank referenced by the Minister indicates that the measures taken by Government have worked very effectively. Unfortunately, the impact of Covid-19 has been more persistent than anyone anticipated in March. The Government has, therefore, extended the availability of the schemes so that they apply for a full 12 months. In addition to ensuring that the schemes operate in a more equitable manner in respect of standard social welfare payments, the changes made in September also mean that they are sustainable over this much longer time frame.

The PUP continues to support 205,000 people through a weekly income support. Approximately 800,000 people have been supported since its introduction in March with a total spend of just over €3.6 billion to date. This figure will increase to €5.2 billion by April next year. These figures are not insignificant and Government must not only ensure that people are supported, but that the supports provided are both equitable and sustainable in order that we are not continuing to build up increased debt for future generations. Calibrating payments such as PUP, as we did in September, to link them to prior employment earnings enables us to do that.

As outlined earlier, access to the PUP scheme will remain open to new applicants until the end of 2020. This means that anyone who loses his or her employment due to Covid-19 can continue to benefit from this support.

I understand the calls to introduce a flat rate of €350. As Deputies are aware, however, the flat rate was introduced as an emergency measure which was paid at just over the normal two-adult household rate. This was to ensure that the maximum number of claims could be processed as quickly as possible and that two-adult households would not lose out. This was achieved, with about 800,000 people receiving a payment and a peak of just over 600,000 payments made was reached in early May.

When circumstances changed, and weekly claims' volumes reduced, it was appropriate to revisit the design of the scheme to make it more equitable and to ensure that it could be more sustainable in the longer term. The linking of the payment rate with previous income and earnings is fair and more sustainable. As outlined earlier, the Government did not make these changes without considering their social impact. The ESRI undertook a social assessment of the impact of the introduction of revised rates from September 2020. As the new rates of payment are pay related, the data indicate that the impact of the changes on income distribution and poverty is very limited and that the PUP continues to provide a very strong support to those who lost their incomes, including people at the lower end of the income distribution. The Government has protected those on the lowest incomes. People who had prior income of less than €200 a week now receive €203 a week, while those who previously earned between €200 and €300 per week now receive a payment of €250 per week. The average earnings in that category is €248 per week, so most people in the category still receive close to what they did when they were in employment and, on average, they are paid at a slightly higher rate with their Covid-19 payments.

People who had a prior income that was over €300 per week now receive a payment of €300 per week, and approximately 129,500 people, or 60%, were paid this €300 per week. This rate represents in excess of 60% of prior average income for this group. The PUP is payable to people aged between 18 and 66 years old, which is consistent with other social protection income supports paid to persons of working age, including jobseeker's payments. The primary State income support for people aged 66 years or over, regardless of whether they are working, is the State pension, either the contributory State pension or the means-tested non-contributory State pension.

The PUP rate was set in line with the two-adult household rate of payment for jobseeker's schemes and in this regard it is important to note that the two-adult household rate for the State pension is €470 per week, which is much higher than the PUP rate. In addition, people in receipt of the State contributory pension, which is based on PRSI contributions, can retain all of their State pension and employment income and retain that pension payment if they lose employment income, thus guaranteeing an income support. People in receipt of the non-contributory or means tested pension who are also in receipt of an employment income may have their pension payment increased if they lose that employment or if it is reduced. The payment of the PUP in addition to these pension payments would have resulted in many workers aged over 66 years receiving very high payments, greatly in excess of payments made to other people who lost their employment. This would not have been equitable.

Turning to supports for different sectors, I acknowledge the difficulties that certain sectors are facing, including the arts, entertainment, tourism, hospitality and taxi sectors as was mentioned. As the Minister indicated, the social welfare system assesses and pays people as individuals and not as members of a particular occupation or sector. This ensures that people are treated equitably and any differentiation of welfare payment rates based on people's employment sector would be inequitable. Given that many occupations also work across sectors and many people work in more than one sector, any sector or occupation-based payment system would, in addition to being inequitable, be extremely difficult to administer.

Recognising that self-employed people face particular difficulties in moving from the certainty of income on the PUP to uncertainty of income if they try to restart their trade, special arrangements have been introduced which mean that self-employed people will not lose their entitlement to PUP if they take up intermittent or occasional work. This is particularly relevant to many of the sectors mentioned earlier. The Government has also introduced a range of targeted supports for these sectors through the provision of various grants, loans, waivers and mentoring support and advice.

In the context of the genuinely seeking work requirement for the PUP, the Minister, Deputy Humphreys, has again confirmed that the Department will take a reasonable and flexible approach in respect of workers who remain temporarily laid off in sectors that have not yet fully reopened due to the restrictions necessitated by Covid-19 and who can realistically expect to return to their employment when the occupational sector reopens. Such workers will not be required to seek work in other unrelated sectors. Supports will, however, be available to those who seek to take up training or education opportunities following the allocation of some €112 million as part of the July stimulus package.

Moving to the temporary wage subsidy scheme, TWSS, and the new employment wage subsidy scheme, EWSS, the Government has committed to supporting employment by means of a wage subsidy scheme until the end of March 2021 through the TWSS and its replacement, the EWSS. These schemes are operated by the Office of the Revenue Commissioners. Under the TWSS, payments worth €2.8 billion were made to more than 66,000 employers. The design of the EWSS reflects the changing environment respecting the Covid-19 pandemic. As a result, a number of flexibilities have been included in the scheme, such as the ability to claim a subsidy for newly hired employees and seasonal workers, while the rates and eligibility criteria have been modified so that the support is sustainable into the more medium-term.

It is expected that payments worth a total of €2.25 billion will be made in support of approximately 350,000 jobs in respect of the beginning of 2021. The primary employer criterion for qualification for EWSS and TWSS is, appropriately, based on turnover rather than profitability. To qualify, the employing enterprise must be able to demonstrate that it is operating at no more than 70% in respect of turnover or customer orders received from July to December 2020 compared to the same period in 2019. This turnover test has been specifically designed to target the EWSS at otherwise viable employers whose businesses continue to be adversely impacted by Covid-19.

Regarding Deputy O'Reilly's query concerning Aer Lingus, and to clarify, officials in my Department have engaged with Aer Lingus and an agreement process is in place for the company to provide any outstanding information to its employees to support their social welfare applications. Applications for jobseeker's claims from Aer Lingus employees are being prioritised within the Department so that awarded claims are being paid as quickly as possible. To date, more than 2,100 claims from Aer Lingus employees have been awarded. A small number of clerical issues have affected some applications and I urge people in that situation to contact the Department again.

Matters relating to workers' employment terms, conditions or entitlements, such as pay, are outside the remit of the EWSS and the TWSS. Under both schemes, however, the employer is expected to make the best efforts possible to maintain as close to 100% of normal income as is possible for the duration of the subsidy. Checks and balances are in place to ensure fairness to employees and employers. I understand that Revenue has been conducting a programme of compliance checks on employers who have availed of the TWSS to confirm that they meet the eligibility criteria and that employees received the correct amount of subsidy due to them. To date, checks have been initiated in respect of some 35% of TWSS employers, which represents some 67% of employment supported by the scheme. These checks will continue for the next several months and I am advised further that inquiries to date have indicated high levels of compliance by employers with the requirements of the scheme.

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