The Government has begun the process to apply for EU funding towards the costs of the Temporary Wage Subsidy Scheme, which could result in Ireland accessing just under €2.5 billion.
The EU fund, known as SURE, is part of the European response to help protect jobs and workers affected by the Covid-19 pandemic.
The funding will help to diversify sources of financing for the Exchequer over the coming period.
"We also need to meet the broader challenge of being responsive to the changing needs of the economy," Minister for Finance Paschal Donohoe said in today's Budget speech.
"The Employment Wage Subsidy Scheme is currently set to continue until March 31, 2021, however, a similar type scheme will be needed out to the end of 2021 to provide businesses with greater levels of certainty, in the most uncertain of times."
The minister said there will be "no cliff edge" to this vital scheme. It will continue during 2021 and the Government will decide on the form of its extension when economic conditions are clearer.
Minister Donohoe said he is very conscious that there are many sectors in the economy that have been particularly impacted by the Government public health restrictions.
"Indeed some specific sectors have been temporarily closed from the outset of the pandemic, such as the entertainment and arts sector as well as many pubs," he added.
The minister also announced a new scheme to provide targeted support for businesses.
The scheme is designed to assist those businesses whose trade has been significantly impacted or temporarily closed as a result of the restrictions as set out in the Government's 'Living with Covid-19' Plan.
The scheme will generally operate when Level 3 or higher is in place and will cease when restrictions are lifted.
The sectors impacted by the current Level 3 nationwide restrictions are accommodation, food and the arts, recreation and entertainment. If the Government decides to move to a higher level of restriction then other sectors may qualify.
For these businesses, the Government will make a payment, based on their 2019 average weekly turnover, to provide support at a difficult time.
The scheme will apply to business premises where the Government restrictions directly prohibit or restrict access by customers. Qualifying businesses can apply to the Revenue Commissioners for a cash payment in respect of an advance credit for trading expenses for the period of the restrictions.
The scheme will be effective from today, Budget Day, until 31 March 2021, and the first payments will be made to affected businesses by mid-November.
Payments will be calculated on the basis of 10% of the first €1 million in turnover and 5% thereafter, based on average VAT exclusive turnover for 2019. It will be subject to a maximum weekly payment of €5,000.
Once the scheme is operational and a county or region is subject to Government restrictions of Level 3 or above, qualifying businesses can claim in week 1 and valid claims will be repaid for the entire period of the restriction within 2-3 working days.
Payments will automatically cease at the end of the Covid restriction period. If restrictions are extended a subsequent claim can be made.
The scheme will operate on a self-assessment basis and qualification will require a business to demonstrate that their turnover has been severely impacted; that is it may not exceed 20% of the turnover for the corresponding period in 2019.