24th March 2020
Cabinet also approves new public health measures on NPHET recommendations
The Government has today announced a National Covid-19 Income Support Scheme to provide financial support to Irish workers and companies affected by the crisis.
- a temporary wage subsidy of 70% of take home pay up to a maximum weekly tax free amount of €410 per week to help affected companies keep paying their employees. This is the equivalent of €500 per week before tax;
- workers who have lost their jobs due to the crisis will receive an enhanced emergency Covid-19 Pandemic Unemployment Payment of €350 per week (an increase from €203);
- the Covid-19 illness payment will also be increased to €350 per week;
- Self-Employed will be eligible for the Covid-19 Pandemic Unemployment Payment of €350 directly from the Department of Employment Affairs and Social Protection (rather than the Revenue scheme)
- enhanced protections for people facing difficulties with their mortgages, rent or utility bills.
These follow on from a range of supports already in place to help business through the crisis. The Government is taking these extraordinary measures to help ordinary Irish citizens and families during this period of great economic and social stress.
These measures will be costly – with an initial estimated cost of €3.7 billion over a 12 week period. The Government believes these costs are necessary to ensure social solidarity with workers and their families affected by the crisis.
Separately, the Government has announced that it is implementing further measures to slow the spread of the virus as recommended by the Chief Medical Officer, and by the National Public Health Emergency Team - an expert team of public health doctors, virologists and scientists.
Speaking at the announcement, An Taoiseach Leo Varadkar said:
The Government has today agreed unprecedented actions to respond to an unprecedented emergency. We have new measures to stop the spread of the virus, in tandem with new measures to help those who have lost or will lose their jobs. I want to thank the people of Ireland for listening to our advice when it comes to physical distancing, regular handwashing, taking care when sneezing and coughing, and reducing the number of social events and gatherings you attend. It’s too early to know for sure, but we believe it is making a difference. However, we now believe we need to do more.
We cannot stop this virus but working together we can slow it in its tracks and push it back. These are extraordinarily difficult times for everyone – in Ireland and around the world. But no matter what happens, we will always put your life and your health ahead of any other concern. All our resources are being deployed in this great national effort. And I know that the Irish people will continue to face this head-on, to make the changes that required, and will pull through to the other side.”
Minister for Finance, Public Expenditure and Reform Paschal Donohoe said:
As we work to diminish the impact of this global health pandemic, we will ensure that the economic impact on those who have lost their jobs or had their hours or income reduced is minimised to the greatest extent possible. The measures being introduced today aim to provide income support to those who need it while also giving confidence to employers to retain the link with employees so that when this crisis passes - and it will pass – our people can get back to work as quickly and seamlessly as possible.
This builds on the work the Government has done with respect to repayment breaks on mortgages and business loans, a prohibition on evictions and rent increases, and the deferral of rates for businesses. We are in exceptional times. The health of our people, and ensuring we remain safe, is our number one priority. Supporting businesses and positioning ourselves so that we can bounce back when the time comes is also paramount. This detailed plan which is being set out today will do that. It is designed to provide comfort and reassurance to concerned citizens during this time of unprecedented-but transitory - difficulty.”
Minister for Business, Enterprise and Innovation Heather Humphreys said:
Government is today entering into an economic partnership with businesses and employers nationwide so that we can support them and their staff through this unprecedented crisis. It is hard to believe that just a few short weeks ago, Ireland was at full employment with record numbers at work. Practically overnight the economic and employment landscape in our country has been utterly transformed by COVID-19.
Through the measures announced today, we want to ensure that businesses are able to keep their employees on the books so that when this crisis ends, Ireland and our citizens can get back to work as quickly as possible.”
Minister for Employment Affairs and Social Protection Regina Doherty said:
We are living in unprecedented times and the Covid 19 virus is presenting a once in a century challenge to Irish society – testing our cohesion, our resilience and our ability to respond. While, naturally, this is first and foremost a public health challenge, it is also a serious threat to the living standards and livelihoods of hundreds of thousands of Irish people. It is almost impossible to predict the scale of employment loss but they will be significant in the short term and that is why we need to present immediate solutions which will meet the scale of that challenge.
Today, I am pleased to announce substantial increases in the weekly rates of payment for the Covid-19 Pandemic Unemployment Payment and the Illness Benefit payment for those required to self-isolate or diagnosed with Covid-19. Both will now be paid at the rate of €350 per week. This will provide significant assistance to many of those recently laid off – particularly in the badly affected hospitality and retail sectors where the new rate of payment will reflect at least 87% of average take home pay.”
Minister for Health Simon Harris said:
As we navigate through this public health emergency, we have asked the Irish people to make great sacrifices. They have risen to that challenge and we have seen some of the benefits of their actions. But now is the time to do more. We have measures now we must take. They are no easy options but we can show the world what can be achieved through intensive, sustained public health action and the willingness of everyone to act for the common good.
Through Government decisions, the mobilisation of individuals and communities and the leadership of our incredible healthcare professionals, we can have a profound effect on the impact of this outbreak on our people, protect the most vulnerable and save lives.”
An eligible employer will be supported by up to 70% of an employee’s take home income up to a maximum weekly tax free payment of €410 (i.e. 70% of take home weekly income of €38,000 per annum).
The scheme will provide support on incomes up to €76,000 or twice average earnings. It will be capped at net €350 for incomes between €38,000 and €76,000.
The employer is expected to make best efforts to maintain as close to 100% of normal income as possible for the subsidised period. Revenue will provide further guidance on operation of the scheme. There will be severe penalties for any abuse of the scheme.
Employers must self-declare to Revenue that they have experienced significant negative economic disruption due to Covid-19, with a minimum of 25% decline in turnover, and an inability to pay normal wages and other outgoings, in accordance with guidance to be issued by Revenue.
This scheme is open to impacted employers in all sectors. This recognises the impact that Covid-19 is having across all parts of the economy. The employee must have been on the payroll in February 2020.
Self-employed who qualify will be paid the Covid-19 Pandemic Unemployment Payment of €350 rather than through the Revenue scheme. They will be eligible on a similar basis as the Revenue scheme for employees.
Revenue and Department of Employment Affairs & Social Protection will provide details to employers today on how to apply.
Enhanced emergency Covid-19 Pandemic Unemployment Payment
People who have already been approved for the Covid-19 pandemic Unemployment Payment will now get an increased payment of €350 per week (instead of €203).
Anyone else who loses their job due to the Covid-19 crisis can apply to the Department for payment at the new rate.
The Covid-19 illness payment will also be increased to €350 per week. The new Scheme will be in place for 12 weeks.
New Public Health Measures
The Cabinet also formally approved new public health measures, alongside existing measures, to apply until Sunday 19th April. These were recommended by NPHET at its meeting this morning:
- Physical distancing restrictions remain in place;
- People should stay home as much as possible, work from home if they can, and only leave home to go to work if there is no alternative;
- only go to the shops for essential supplies, for medical or dental appointments, to care for others or to take physical exercise;
- social events or gatherings involving more than 4 people that have not already been cancelled should be cancelled;
- Non-essential indoor visits to other people’s homes should be avoided. Social gatherings of individuals outdoors should be no more than 4, unless from the same household.
- No unnecessary travel should take place within the country or overseas.
Further details will be outlined by the CMO and NPHET teams.
Support for renters
The Government is introducing legislation to prevent both the termination of residential tenancies and any rent increases for the duration of the Covid-19 crisis.
The banks have also said they will support buy-to-let bank customers with tenants affected by COVID 19 with an opportunity to seek a payment break of up to three months – so they can in turn offer forbearance to their tenants.
Rent Supplement is also available as a short-term income support to those in the private rented sector who are experiencing difficulty paying their rent. In view of the difficulties created for many in the private rented sector who have lost significant employment income, the Department of Employment Affairs and Social Protection will use the full flexibility of the scheme to provide the necessary support.
Support for mortgage-holders
A series of measures to support people impacted by Covid-19 have been announced by the banking sector. These include:
- flexible arrangements, including a payment break for mortgages and other loans. Customers affected by COVID-19 must contact their bank to discuss the flexibility available to them, including the possibility of a payment break of up to 3 months. Non-bank mortgage lenders and credit servicing firms have also announced their support for this measure.
- support for buy-to-let bank customers with tenants affected by COVID 19 – customers with rental property in which the tenants are adversely impacted by COVID-19 will also be provided with flexibility including with an opportunity to seek a payment break of up to 3 months, which will allow them to exercise due levels of forbearance to their tenants
- in addition applications for payment breaks as A result of COVID-19 will not affect credit records.
Support for utility bills
The Commission for Regulation of Utilities (CRU) has issued a moratorium on disconnections of domestic customers for non-payment to the gas and electricity suppliers. The suppliers have arrangements in place for any domestic/residential customers in arrears which are overseen by CRU and have a number of emergency provisions to assist Pay As You Go customers.
Other supports for businesses
In addition to the Scheme being announced today, the Government has already announced a range of measures including:
(i) financial supports, including a €200m Strategic Banking Corporation of Ireland Working Capital scheme; a €200m Rescue and Restructuring Scheme available through Enterprise Ireland for vulnerable but viable firms; the maximum loan available from Microfinance Ireland has been increased from €25,000 to €50,000 (these loans are now interest free with no repayments for 6 months); Local Enterprise Offices in every county will be providing vouchers up to €2,500; a Finance in Focus grant of €7,200 will be available to Enterprise Ireland and Údarás na Gaeltachta clients.
(ii) other supports including a First Responder support service through the Intreo Offices and development agencies, Enterprise Ireland and IDA Ireland in each region to provide tailored supports for affected businesses; the Department of Employment Affairs and Social Protection Short Term Work Support Scheme.
(iii) deferral of Business Rates: the Government has agreed with local authorities that they should defer rates payments due from the most immediately affected businesses, primarily in the retail, hospitality, leisure and childcare sectors, until the end of May.
(iv) taxation Measures to alleviate short-term difficulties: Revenue has also posted specific advice for businesses experiencing trading difficulties as a result of COVID-19 including information on tax returns, the application of late payment interest, debt enforcement, tax clearance and customs.
Banking and Credit Measures
All the banks have announced that they will offer flexibility to their customers, and they may be able to provide payment holidays or emergency working capital facilities.
The main non-bank lenders also confirmed their intention to also support the range of measures announced by the country’s main retail banks which is to be welcomed.
A deferral of up to 3-months on loan repayments will be available to many businesses. In addition, the banks are adopting a customer-focussed approach to these businesses with a wide variety of tailored supports including extensions of credit lines, risk guarantees, and trade finance. These supports complement the range of Government supports available through the Strategic Banking Corporation of Ireland.
The Central bank has confirmed that it will allow banks to dip into their rainy-day capital reserves to keep lending flowing. It is anticipated that this move could free up considerable additional credit for households and businesses.
A small but important change for many businesses is the limit for contactless credit card payments has been raised from €30 to €50.
Speech of An Taoiseach, Leo Varadkar TD
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