I thank the Chairman kindly for his opening remarks on the Department and the work being done by our teams. I thank him and members of the committee for the invitation to attend to discuss the pandemic unemployment payment scheme, or the PUP, as it is known. My name is Rónán Hession and I am the assistant secretary general in the Department of Social Protection with responsibility for working-age policy. I am joined by my colleague, Teresa Leonard, who is assistant secretary general with responsibility for operational matters.
The PUP was introduced in March of this year as an emergency response to the huge and sudden increase in the loss of employment arising from the imposition of necessary public health restrictions to address the Covid-19 pandemic. It was introduced first at a rate of €203 per week as a means to fast-track payment of an unprecedented volume of claims. The intention was that claims from people with qualified adults or dependants would then be prioritised and re-rated at an appropriate higher rate of payment. When, given the claim load, it became evident that this would not be possible, the rate of payment was increased to €350 and aligned with the rate for a two-person household on a standard jobseeker claim. This payment rate was also broadly equivalent to the net weekly earnings in the two most affected sectors, namely retail and hospitality. Within two weeks of the PUP being announced, we received and processed 389,000 applications. This was equivalent to a 19-month claim load in one fortnight. By the peak on 5 May, we were issuing payments to 602,000 people at a cost of some €209 million per week. By that time more than 1.1 million people were in receipt of State supports either via the live register, the PUP or the temporary wage subsidy scheme.
Changes were subsequently introduced in June to link the payment rate to prior earnings, and since the move to level 5 restrictions the PUP is paid at four rates as follows. For those with prior weekly earnings of less than €200 per week, the rate of the PUP is €203 per week. On average, this is 190% of prior earnings. For those with prior weekly earnings between €200 and €299.99 per week the rate of the PUP is €250 per week. On average, this is 106% of prior earnings. For those with prior weekly earnings between €300 and €399.99 per week the rate of the PUP is €300 per week. On average, this is 90% of prior earnings. A person who previously earned €400 or more per week receives a PUP rate of €350 per week. On average, this is 58% of prior earnings.
In addition to the changes to payment rates, and as outlined in briefing material provided last week, the Department has, since the PUP was introduced, enhanced the processes and systems used to verify prior employment status and earnings. All claims are now checked against Revenue Commissioners records of employment and earnings to validate prior employment status and to set the correct rate of payment. Where a person's employment status or earnings cannot be validated, he or she is contacted and invited to submit supplementary information to enable us to check his or her status and to process the claim to completion.
On 16 November we issued payments valued at €103.8 million to 350,072 people in receipt of the PUP. To date, numbers in receipt of the PUP have therefore increased by just under 150,000 since restrictions were introduced at the start of October and by just under 106,000 since the introduction of level 5 restrictions on 7 October. These figures are in addition to the 203,172 people who were reported as being on the live register as of the end of October.
From a sectoral perspective, those most impacted sectors, measured in terms of PUP recipients during the initial onset of the pandemic, included accommodation and food, wholesale and retail, and construction. All three recovered to varying degrees during the lifting of restrictions over the summer. With the introduction of restrictions, the accommodation and food sector is impacted to the most significant extent, with wholesale and retail impacted to a lesser extent than may have been anticipated.
From a regional perspective, while the introduction of level 5 restrictions has seen increases across all regions, PUP numbers remain below peak levels in all areas.
In age terms, under-25s make up a proportionately higher share of current recipients than was the case at the peak. Given the high concentration of young workers in hospitality and retail, this is unsurprising.
As for gender, at the peak just over 40% of recipients were female. The most recent data, which capture the initial impact of level 5 restrictions, indicate that the proportion of males and females on the PUP is now almost equal. This is likely a consequence of the different sectoral composition of those on the PUP compared with the initial peak. For example, construction, which is a largely male-dominated industry, employs more than 148,000 people across the country and was closed at the initial phases but remains open under level 5.
A number of changes have been made to the PUP scheme in recent weeks. Following the announcement in the budget, it is now possible for a self-employed person to earn up to €480 in a four-week period without it affecting his or her PUP claim. This addresses concerns raised in particular by taxi drivers and those in the arts and culture sector. We have also revised the reference period for the calculation of prior earnings in order that those with employment records since February can receive the appropriate PUP payment.
We have a number of important projects under way, including payment of the Christmas bonus. The bonus will be paid at 100% of the relevant PUP rate of payment. The PUP bonus week is the entitlement week ending 3 December 2020. A person who has been in continuous receipt of PUP since Friday, 7 August, will satisfy that condition. In addition, any person in receipt of the PUP for the week ending 3 December who has returned to work and who has an aggregate of at least 17 weeks on the PUP will also qualify for the bonus on the pay date of 8 December. In other words, the 17 weeks do not have to be continuous.
Before I conclude, I wish to pay tribute to the staff within the Department who have worked tirelessly since March to ensure that those affected by the Covid restrictions receive the financial support they need. This has been demanding at a time when, as a Department, we have had to adapt our work practices in order to prioritise the safety and well-being of our staff and customers. We have provided briefing to the committee setting out further detail on the scheme, which I hope is useful in informing the committee's deliberations. We are happy to take any questions.