Dáil Éireann Debate, Wednesday - 29 July 2020
17. Deputy Claire Kerrane asked the Minister for Employment Affairs and Social Protection the number of persons, including the self-employed, who will face a loss in income as a result of reductions in the pandemic unemployment payment rate as outlined in the July stimulus; if the changes to payment rates were poverty proofed; and if she will make a statement on the matter. [19300/20]
View answerWill the Minister specify the number of people, including the self-employed, who will face a reduction in their pandemic unemployment payment, PUP, due to the changes in rates outlined in the July stimulus, and if those changes in rates were poverty-proofed?
I thank the Deputy for raising this matter. The Covid-19 pandemic unemployment payment, PUP, was introduced as an emergency measure to meet the surge in unemployment which resulted from the effects of the coronavirus pandemic. From the outset, the payment has been made available to both employees and the self-employed. From a peak of more than 600,000 claimants, there are now fewer than 300,000 people claiming the payment. The latest figure is 287,000.
As part of the Government's July stimulus package announced last week, the pandemic unemployment payment has been extended to 1 April 2021. Changes have also been introduced to the structure of the payment to ensure that the payment not only continues to be a strong income support but that it is also fair and targeted.
From 17 September 2020 until 31 January 2021, the pandemic unemployment payment will be paid at three rates, linked to the previous earnings of claimants. We would expect that the number of people in receipt of the payment will have fallen further by mid-September when these changes will take effect.
For those who earn less than €200 per week, which represents 19% of the current claimants, they will remain on a rate of €203. For people who earn €200 to €300 per week, the rate of payment will be €250 per week. This will affect 23% of claimants based on the current profile of claimants. People in this bracket will still be receiving between 83% and 125% of prior earnings, or 105% of average prior earnings.
For people who earned more than €300, they will receive a weekly pandemic unemployment payment of €300 per week from mid-September. This will affect 58% of claimants, again based on the current profile of claimants. They will go from €350 to €300 per week, representing, on average, 65% of prior earnings.
The ESRI was asked to undertake a social assessment of the impact of the introduction of the proposed new rates from September 2020. The analysis considers the effects of the new PUP rates with reference to changes in household disposable income, family type and the impact upon poverty rates. The analysis indicates that the changes result in a very small reduction in disposable income at 1.4% and that the new PUP rates would increase the at-risk of poverty rates for everyone by 0.6 of a percentage point.
Other research undertaken by the ESRI examined the impact on family incomes of Covid-19 related job losses.
I specifically referred to the self-employed in my question. I would appreciate it if the Minister could give me a figure on the number of self-employed people who will see a reduction when these rates change. I know from a reply to a previous parliamentary question I asked that approximately 15,000 self-employed people had their payment reduced from the €350 to the €203 when the first change was introduced. An issue I raised with the Minister yesterday and I raise again now is that the rate the self-employed are being paid on the pandemic unemployment payment is based on their 2018 tax returns. I again ask her if she will allow the self-employed to make a self-declaration to Revenue on their 2019 income to try to reflect better their actual income and ensure they do not lose out. I was also contacted by somebody the other day who works part-time and is self-employed. That person's payment has been reduced to €203 and the only thing the Department is taking into account is their part-time employment, yet most of their income comes from the self-employed work. Where people are working part-time and are self-employed, can both be taken into account?
I thank the Deputy. Where a person is self-employed, his or her gross average weekly income for 2018 is used to calculate the rate of the pandemic unemployment payment. That is because it is the last tax year for which verifiable data on self-employed income is available. The nature of self-employment is such that it is not possible for Revenue and for PRSI purposes to attribute self-employment income to any particular week, and earnings are assessed on a full-year basis. Any person who feels that the assessment of his or her earnings based on returns already submitted to Revenue is inaccurate can ask for a review of his or her case, with further details available on www.gov.ie. It should be noted that any person on the new rate of payment will be eligible to apply for the standard jobseeker's rate, which, for a two-adult household with one child, is €377 per week. Any person who is experiencing hardship may apply for support under the means-tested supplementary welfare allowance scheme also.
The Minister might come back to me on that constituent who is working part-time, which is the income being taken into account with regard to his PUP rate, but he is also self-employed and that is the bulk of his income. I have contacted the Minister on that and I would appreciate a response.
On the new condition now introduced that people in receipt of PUP have to seek work, again, do self-employed people on the PUP now need to seek work? During the debate last night, the Minister said that the Department would take a common-sense approach, which I welcome, but how will that work? Is the Minister expecting the PUP recipients to contact her Department depending on whether their workplace has yet to reopen, and how that will work? Finally, I asked the Minister this question last night but I ask again if job activation schemes such as JobPath will be knocking on these people's doors, so to speak, looking for them to engage if they are in receipt of the PUP?
I thank the Deputy. As I said last night, we have to take a common-sense approach to this because some sectors have not fully opened up yet. We will do that, and I have asked my officials to ensure that that sensible approach is taken for those who cannot return to work and who are waiting for their job to come back. If they work in a pub, and we hope pubs will reopen by 10 August, they will get that opportunity. However, we have to be realistic because some jobs will not come back and there is no point in waiting for the never ever. It is best that we help people to reskill, retrain and look at other jobs they can take up.
In terms of the self-employed, they are self-employed, and if their work is there to go back to, there is other assistance we can give them.
There is a grant they can get to help them get back to work and to pay for expenses they may incur in trying to get their businesses back up and running. We have to take a sensible approach.
