Alan Dillon (Mayo, Fine Gael)

I propose to take Questions Nos. 11, 16, 20 and 24 together.

I thank the Deputy for submitting his question. It is probably the most topical one on the Question Paper. The increased cost of business scheme was introduced back in March 2024 and the power up grant was introduced in October of the same year. Both schemes are now closed but, in total, more than €400 million in grant aid was successfully paid to SMEs right across the country in 2024 under these grants. The schemes were designed by the Department of Enterprise, Trade and Employment and administered by local authorities with the aim of helping businesses with the increased costs associated with running a business.

The power up grant was announced as part of budget 2025 and paid out €158 million in grants to over 39,000 businesses. The increased cost of business scheme made €242 million in grant payments to over 75,000 businesses, including a double payment for businesses in the retail, hospitality and beauty sectors. This is a significant direct support that has been specifically targeted at SMEs and has benefitted thousands of small and family-run businesses. I again thank local authorities all over the country for their hard work in administering both schemes and getting this vital support to businesses in a most effective and timely manner.

Following the launch of power up, the Department and local authorities around the country received a substantial amount of correspondence from businesses that could not avail of the power up grant. The most common issue raised was from businesses who believed they were in the hospitality, retail or beauty sectors, but incorrectly categorised themselves during the ICOB registration process, which was the basis for the power up grant. The number of applicants that were deemed ineligible due to misclassification is not yet clear. In order to get money to businesses before the end of 2024, the power up grant was aligned with the ICOB grant. Therefore, priority was to get power up funding to businesses that had been approved for the second ICOB grant. The extent of the issue of incorrect classifications only emerged after the power up grant was launched.

Businesses that had not classified themselves as operating in the hospitality, retail or beauty sectors were ineligible for the second ICOB and power up grants. This is because one of the main criteria for the power up grant was that a business must have received the second ICOB payment. While delivery of the power up grant was concluding, the Department began a review which involved detailed engagement with local authorities to assess the issue. The Department also engaged with the Department of public expenditure in order to set out the proposed solution. In order to address this, this week the Government approved an appeals process that will give those businesses in the retail, hospitality and beauty sectors that were not eligible for ICOB and the power up grant because of the misclassification issue, an opportunity to register for those grants. This is not a reopening of those grant schemes, rather it is designed to allow those who originally misclassified their business sector an opportunity to register for the grants.

The Department will now engage with the Department of public expenditure, infrastructure, public service reform and digitalisation and with the local authorities to agree on the details of the reclassification process. Subject to agreement with the local authorities, it is intended to open the appeals process as soon as possible and engage with local authorities to ensure eligible businesses have been informed with the necessary steps to reapply. Both businesses and local authorities will be given guidance to assist in this process. Once potentially eligible businesses have been notified and the reclassification process opens, I expect grant payments will be paid to businesses where their information is submitted and has been reviewed and verified.

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