The news was confirmed on Wednesday as Taoiseach Micheal Martin announced more lockdown measures for Ireland.
Extensions have also been granted to the Employee Wage Subsidy Scheme and the CRSS weekly payment for businesses.
But it is feared that up to 500,000 people could be unemployed as a result of the latest measures.
Speaking following yesterday’s Cabinet meeting, Social Protection Minister Heather Humphreys said: “From the very start of this Pandemic, the Government has endeavoured at all times to protect people who lost their employment through no fault of their own.
“I am pleased to confirm that the Government has today approved my proposal to keep the Pandemic Unemployment Payment at its current rates of payment until March 31st 2021.
“This clarity will help to avoid unnecessary anxiety and worry both for those workers already in receipt of the Pandemic Unemployment Payment and also for those who will need to access it as a result of the latest restrictions announced today.
“When the Pandemic Unemployment Payment was introduced last March, it was intended to be in place for just a 12 week period.
“As we all know the virus has had a much longer lasting impact both in Ireland and globally that any of us initially anticipated.
“The decision by Government today means that the Pandemic Unemployment Payment will be extended at its current rates of payment until the end of March 2021, over a year after its introduction.
“Over €5 Billion has been paid out on the Pandemic Unemployment Payment to date. While this is a huge sum of money it was absolutely the right thing to do in order to ensure that the incomes of hundreds of thousands of people have been protected during a period of unprecedented difficulty for our country.
“As always, my overriding message is that the Pandemic Unemployment Payment is there to support people who lose their employment. It remains open for new applications and the quickest and easiest way to apply is via www.MyWelfare.ie.â€
The Government has confirmed even more restrictions to halt the spread of Covid-19.
Schools will remain closed for at least the month of January, with the exception of special education and those sitting the Leaving Cert, who will be allowed attend three days a week.
Childcare services will remain open for vulnerable children and the kids of essential workers.
Construction work, which was allowed continue in the previous Level Five lockdown, will now be scrapped from end of business on Friday, with the exception of essential works.
Click and collect services will also be banned, with retailers now only allowed to operate delivery services.
But it is feared that up to 500,000 people could be unemployed as a result of the latest measures.
Passengers arriving from the UK or South Africa will need a negative test 72 hours prior to entering the country, but must still isolate for 14 days.
Those who don't could face a €2,500 fine or six months in prison.
The Government will now allow the formation of "childcare bubbles" for kids of essential workers.
This would see two different homes join together for child-minding purposes.
A total of 7,836 more people have tested positive for Covid-19 in Ireland, while 17 further deaths have been confirmed.
It brings the number of infections here to 121,154 since the pandemic began.
The latest figures were announced by the Department of Health yesterday evening. ■