The Pandemic Unemployment Payment is to remain open to new applicants until the end of this year following a decision at cabinet earlier today.
At the peak of the coronavirus crisis, almost 600,000 people were entirely dependent on the PUP scheme, which has cost over €3.5 billion so far.
The scheme is due to expire on 31 March, 2021, and was to be closed to new entrants from this Thursday, 17 September.
Following this morning's cabinet decision, newly unemployed people - and anyone laid off for a second time - can continue to join the scheme until the end of December.
However, those joining from Thursday will no longer be entitled to the original top rate of €350 - as from 17 September, the maximum entitlement will fall to €300 for those who earned over €300 per week gross prior to the pandemic.
Workers will be entitled to €250 per week if their pre-pandemic earnings were between €200 and €300 per week, while the lowest rate of €203 for those who earned below €200 before Covid-19.
The changes will be implemented in next week's payment.
The Minister for Social Protection Minister Humphreys said the PUP had been shown to be an "extremely effective tool" in responding to the economic impact of Covid-19, and in cushioning the population from sudden income shocks.
"With the continuing uncertainty posed by Covid-19, I believe keeping PUP open is a fair and appropriate course of action at this time," she said.
The cabinet has also approved extending the waiver on the three "waiting days" which had to expire before a person could qualify for Jobseekers Benefit or Allowance until 2021.
Minister Humphreys said this was to ensure that people who lost their employment were provided with income support immediately, to mitigate the financial impact on people and their families.