The last payment of the PUP will be paid today (March 29 2022) as the emergency support comes to an end, almost two years to the day after it was introduced. The remaining 45,000 recipients will transfer over to the ordinary jobseeker’s benefit.
The PUP was one of three income supports introduced in March 2020 for workers who had their employment affected by Covid.
It was devised, agreed upon by Government and the first payment was paid out within a fortnight. The speed of this turn-around is truly extraordinary. New social welfare payments normally take decades, not years and certainty not days, to get up and running. We have to go as far back as the First World War to find something comparable.
But, like wartime, spring 2020 was not normal times.
Covid was the biggest economic shock in the history of the State causing unparalleled disruption to our economy and labour market.
With social and economic life brought to a halt to help slow the spread of the virus, the Department of Social Protection would process the equivalent of 19 months' claims in the first two weeks of the PUP being introduced for workers who lost their job.Over the course of the following two years, a third of the entire workforce, 880,000 workers, would be reliant on the PUP at one point or another.
It was intended to be in place for just 12 weeks and was paid at a flat €350 to workers who were temporarily laid off.
The relative generosity of the PUP attracted much attention. Some questioned why €350 was now considered an appropriate amount when everyone else on welfare receives only €208. Others were critical of young, low-paid, and part-time workers receiving more than they did when they were working.
The two features prioritised by officials when designing the PUP were speed and adequacy. The payment had to be able to be administered quickly by staff, given the sheer number of claims, and be sufficient to offset the financial consequences for workers being denied their right to work by Government-mandated restrictions.
To achieve this, the PUP was set at the same rate as the ordinary jobseeker’s benefit for a couple or for a single parent with three children to simplify the application. €350 was also equivalent to the average take-home pay for workers in hospitality and retail, the two biggest sectors impacted by the lockdown. This did result in a minority initially receiving more on the PUP than their previous wage.When the national emergency continued beyond 12 weeks the PUP was extended and it was amended so that the payment rate was more closely aligned to what the worker used to earn.
Besides, the alarmist hand-wringing that the PUP would cause people to “get a bit lazy” proved to be grossly misplaced.
Hundreds of thousands of workers willingly closed their claims and returned to work when businesses reopened. Indeed, just 36,000 workers were on the PUP for more than a year. Representing 4% of the total number of recipients.
Equally, there is a major gap between the public perception of fraud and measurable facts. While €25 million did go to people who were not eligible, of which €11 million has so far been recovered by the Department, the total spend on the PUP was over €9 billion. The PUP, like the wage subsidy scheme and the Covid-19 illness payment, effectively protected the living standards of workers who were out of work due to the pandemic. Without these emergency payments, the at-risk-of-poverty rate would have climbed more than seven percentage points higher to almost 21% in 2020.
However, while Government’s response was quick and generous, the income supports that had to be hastily introduced in March 2020 have been in place for decades in all other rich EU countries. Ireland was unusual in having to set up whole new payments.
Lessons have been learned. Paid sick leave will become law later this year and the Programme for Government commits to introducing a permanent wage subsidy in line with international best practice and holds out the prospect of a European model of pay-related jobseeker’s benefit for insured workers.
The PUP has served us well over the last two years and leaves a lasting legacy on how our welfare system protects workers from falling living standards when temporarily out of work.
Dr. Laura Bambrick, Social Policy Officer
