Cuts to pandemic payments to begin as early as August

Cabinet to meet on Tuesday to agree stimulus package and phasing out financial supports

The weekly €350 PUP will likely be cut in three or four steps until it is at the same rate as basic social welfare payments. File photograph:Gareth Chaney/Collins

The weekly €350 PUP will likely be cut in three or four steps until it is at the same rate as basic social welfare payments. File photograph:Gareth Chaney/Collins

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The Government will seek to cut weekly Covid-19 welfare supports in four stages from as early as August as part of a plan to revive the economy as the impact of the pandemic dwindles.

The Cabinet will meet on Tuesday to agree a multibillion package aimed at stimulating economic activity and phasing out financial supports such as the Pandemic Unemployment Payment (PUP) and Employment Wage Subsidy Scheme (EWSS), which have both cost billions to date.

Sources said they expect a series of phased reductions in the payments to start in either August or September. The date for this is to be finalised today (Monday).

The weekly €350 PUP will likely be cut in three or four steps until it is at the same rate as basic social welfare payments. It is also likely to be closed off to new entrants from as early as September.

Students who return to college will also lose their payments as they will no longer be available for work.

Sources said that generally speaking the last phase of tapering off supports would begin early next year.

The EWSS, paid to businesses, will likely be left unchanged in the third quarter, although tweaks are being considered in relation to how businesses qualify.

“It won’t become any harder to qualify; there may be some changes in detail but the overall rates will be maintained,” a senior source said.

It is understood that extending the EWSS for another quarter would cost around €1.2 billion.

Temporary measure

Tánaiste Leo Varadkar said the PUP “was always introduced as a temporary measure for the pandemic” and “will have to end at some point”.

He said the phasing would be handled “cautiously”, and would likely start in September or October.

“We will also make a decision on closing it to new entrants because really at this stage very few if any people who are losing their jobs now are losing them a consequence of the pandemic.”

The Cabinet will also announce how it plans to allocate funding of €915 million received under the EU’s recovery and resilience fund, with around 25 projects in the areas of environment, technology and transport expected to benefit from funding of up to €40 million each.

Separately, Mr Varadkar said he shared the concerns of chief medical officer Dr Tony Holohan about large crowds gathering in Dublin city centre on Saturday evening.

The Tánaiste warned that something similar could happen next week, when there is a bank holiday weekend, if the weather is good. He said there was a role for gardaí and city councils in managing the situation.

A total of 16 arrests were made in Dublin and Cork for public order offences this weekend following large outdoor gatherings. An area near the river Corrib in Galway was also closed off to deter such gatherings.

Dr Holohan said he was “absolutely shocked” at the scales of the crowds gathered in and around South William Street in Dublin city centre on Saturday evening, which resembled “an open air party”.

Localised lockdown

Mr Varadkar also said the Government may still make use of localised lockdown if there are spikes of Covid-19 cases or localised concerns around the Indian variant of the disease as restrictions are eased.

A further 374 cases of Covid-19 were reported on Sunday.

Mr Varadkar said that while there had been “mixed results” to such lockdowns in the past, the option remained if needed in the months ahead.

“The country is so small and people travel so much within Ireland, local lockdowns probably aren’t as effective as they might be in other countries. But it is an option should we need to use it, but hopefully we won’t have to.”

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