On October 13th, 2020 the Government published Budget 2021. In his speech to Dáil Eireann on the day, the Minister for Public Expenditure and Reform, Michael McGrath said that “€8.5 billion is being provided for Covid-19 supports. Of this, €6.4 billion will be allocated to Departments in 2021 to:
- Ensure our health service can respond to the demands of Covid-19;
- Extend personal income and business supports;
- Keep our schools open; and
- Maintain public transport services.”
The Minister also said that “In addition, the remaining €2.1 billion will be held in contingency and will be made available as needed to respond to the challenges posed by Covid-19”, while Minister for Finance, Paschal Donohoe noted that a “€3.4bn Recovery Fund is being provided to address specific economic needs as they arise.”
The INOU’s pre-Budget submission was made under seven headings, and this article will look at what Budget 2021 did and did not contain in relation to them.
COVID-19
The changes announced in the July Jobs Stimulus 2020 to the Pandemic Unemployment Payment remained. Then Ireland went into Level 5 lockdown, and a fourth level of €350 was introduced for anyone who had earned more than €400.
People who have been on PUP for at least four months by early December will receive a Christmas Bonus to 100%. People who were previously self-employed will be able to earn up to €480 a month and keep their Pandemic Unemployment Payment.
A COVID-19 version of the Part-Time Job Incentive Scheme will also be made available to the self-employed who wish to resume their business but can only do so on a limited basis.
ADEQUATE INCOME
No increase was made to core social welfare rates, so a Minimum Essential Standard of Living remains unattainable for many recipients. The maximum personal Jobseekers’ Allowance (JA) rate for young people aged 18-24, who are not living independently with State assistance, remains at €112.70.
The Christmas Bonus is only paid to people on a Jobseeker’s payment if they have been on it for at least 15 months: this year, in line with PUP, the requirement is four months or more. The Qualified Child Increase was raised to €45 for children aged 12+, and to €38 for younger children. The Fuel Allowance rate was increased to €28, however, for anyone on a Jobseeker’s payment a 15-month eligibility rule applies.
SUPPORTIVE EMPLOYMENT SERVICES
According to the Expenditure Report 2021 Part II the Department of Social Protection “will expand on activation measures announced in the July stimulus package”. €10 million will be provided for supports for people who are unemployed, with a specific focus on youth unemployment. This expenditure will be in addition to the €112 million provided in the July Jobs Stimulus 2020.
Increasing the capacity of Public Employment Service (PES) to support jobseekers through job search advice and assistance, including through contracted services Job Clubs, JobPath and Local Employment Services was noted in July. However, the budgetary documents do not indicate how PES will be delivered in a world that is greatly restricted by COVID-19.
EMPLOYMENT PROGRAMMES
In July,the Government said there would be “3,000 additional places will be funded on State Employment schemes such as Community Employment and Tús”. Community Employment and Tús are included in the Working Age – Employment Supports section of the Department of Social Protection’s Vote.
The Employment Wage Subsidy Scheme accounts for 57% of €2.1bn employment supports expenditure in 2021. The next biggest item is Community Employment with an estimated expenditure of €362.7m, a slight decline on the 2020 figure of €364.6.
The third biggest item is the Work Placement Experience Programme, which has yet to be rolled out and is estimated to cost €135.7m in 2021. This programme builds on the July Jobs Stimulus announcement of “10,000 additional places on work placement and experience schemes available for those unemployed for over 6 months.”
EDUCATION & TRAINING
Over 10,000 upskilling/reskilling opportunities will be provided through SOLAS and Skillnet Ireland: 2,000 Skills to Compete places; 1,600 Skills to Advance; 5,000 training opportunities through Skillnet Ireland; 1,500 places on Retrofitting courses. There will also be 4,000 new apprentices under the Apprenticeship Incentivisation Scheme; and an additional 1,500 places on Springboard courses in 2021.
A new €1,000 training grant will be introduced to help people with disabilities access training through the Employability service. Separately, it was announced the grant available for jobseekers to take up short employment-focused courses will be doubled to €1,000.
ACCESS TO DECENT WORK
The Working Family Payment income limit will be increased by €10 per child for the first three children to €541 for one child; €642 for two children; €743 for three children.
The Back to Work Enterprise Allowance estimate is €25.5m higher in 2021, at €64.8m. Self-employment can be an important route out of unemployment for people, and it will be important not to lose sight of this while trying to address the challenges facing people who were self-employed before COVID-19 struck. Funding for the €1,000 COVID-19 Enterprise Support Grant will be doubled to €24 million.
There was no reference to the Living Wage in the Budget. To ensure there is no negative impact of the proposed 10c increase to National Minimum Wage, changes will be made to the ceiling for the second USC rate and to the higher rate of employer’s PRSI.
The Government noted that Budget 2021 was framed in the context of a No-Deal Brexit. €1.2bn has been put aside to support vulnerable sectors and to provide for automatic stabilisers and labour market activation supports.
COMMUNITY-BASED ORGANISATIONS
Under Budget 2021 the Community Services Programme’s funding will increase by €2m to €49m. Funding for the Social Inclusion and Community Activation Programme will remain at €44m. €1m will also be provided to commence pilot community development projects. This builds on a commitment in the Programme for Government to “Introduce, on a phased basis, a number of projects similar in approach to Community Development Projects (CDPs).”
To read the INOU’s full Post-Budget Analysis please follow this link: https://www.inou.ie/assets/files/pdf/inou_pba_2021_1.pdf