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German short-time work benefit model being considered by government ahead of Budget

Taoiseach Micheál Martin said specific sector supports are under consideration.

SECTOR SPECIFIC SUPPORTS for the tourism and hospitality sector are being considered as part of this year’s Budget, the Taoiseach confirmed today. 

During Leaders’ Questions, Micheál Martin said the government is considering “sector specific measures” and is also looking at the German Kurzabeit scheme and how it might work in Ireland. 

This comes after the Taoiseach confirmed to that mechanisms are being considered that could see workers do some work without losing out on their Pandemic Unemployment Payement (PUP).

The Kurzarbeit scheme is a social insurance scheme whereby employers reduce their employees’ working hours instead of laying them off. Under the model, the government  provides an income “replacement rate” of 60%. The rate can be higher for workers with children.

A worker receives 60% of his or her pay for the hours not worked, while receiving full pay for the hours worked. Therefore a worker would only experience a 10% salary loss for a 30% reduction in hours. 

The employer is also required to pay 80% of the total social security contributions. Germany extended the scheme for two years due to the pandemic.

It’s not a new scheme, but it is credited to stabilsing the labour market in Germany after the 2008 crash.

Labour’s Alan Kelly urged the Taoiseach to investigate if such a scheme could work for Irish workers during the pandemic, particularly those hardest hit. 

The Labour leader said if other counties go to Level Three, “they can’t exactly in October, November, December, January and Februrary serve food and drink outside. 

“We need a plan here,” he said. 

“I don’t believe we can get through the winter,” added Kelly, who fears we could “lose a whole sector” or “large sections” of the sector if supports aren’t put in place.

The Taoiseach said a plan on how to sustain the hospitality sector over the medium term is needed, accepting that Covid will have a “significant impact on the economy for the full 12 months of 2021″.

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