New business support scheme could cost €40m a week to run

Running the State’s new business support scheme will cost the exchequer €40 million a week during the level of restrictions currently in place, budget documents show.

The Covid Restrictions Subsidy Scheme (CRSS) announced on budget day will provide for grants of up to €5,000 a week to businesses who have been forced to close or operate at a significantly curtailed level due to Covid restrictions.

In order to qualify, a business must have lost 80 per cent or more of its turnover relative to the same period in 2019. Budget documents show it has an estimated cost of €40 million for every week at Level 3, with any spending on the scheme next year set to be funded by the State’s €3.4 billion recovery fund.

Speaking on budget day, Tánaiste Leo Varadkar said it was introduced as an alternative to the practice of topping up restart grants, which has been the approach for impacted sectors so far. "As you go up and down levels or as you might introduce restrictions in particular counties or regions, this one tool fits all those circumstances," he said.

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The scheme will only kick in when Level 3 or higher is in place, and it can be operated alongside other State supports, such as the Employment Wage Subsidy Scheme (EWSS). The sectors eligible for the support will be determined by the restrictions in place, for example, at Level 3, accommodation, food, the arts, recreation and entertainment are impacted.

"If the Government decides to move to a higher level of restriction then other sectors may qualify," Minister for Finance Paschal Donohoe said in his budget speech. Qualifying businesses can apply to Revenue for a cash payment in respect of an advance credit for trading expenses for the relevant period. The scheme is effective from budget day until the end of March next year, and the first payments will be made to impacted businesses by the middle of November.

However, the Tánaiste said that if needed, the Government would consider extending the scheme beyond its current closing date, again funded by the €3.4 billion recovery fund. Similarly, the Government signalled that the EWSS will be extended, with Mr Donohoe telling the Dáil that “a similar scheme will be needed out to the end of 2021”, and promising there will be “no cliff edge to this vital scheme”.

Other measures to support jobs include the extension of the commercial rates waiver until the end of the year at a cost of €300 million, as well as €200 million for training and work placement schemes. Apprenticeship schemes announced in the July stimulus package will be extended, and there are multiple sector-specific funding supports being put in place, including those targeted at the arts and hospitality sectors. Some €10.1 billion in infrastructure spending has been approved, while the VAT rate for the hospitality sector has been cut from 13.5 per cent to 9 per cent.