Coronavirus: When will Government income and wage supports be cut?

Smart Money: the pandemic unemployment payment will be extended, but not forever

Bewley’s on Grafton Street in Dublin: the latest high-profile services business to fail. Photograph:  Dara Mac Dónaill

Bewley’s on Grafton Street in Dublin: the latest high-profile services business to fail. Photograph: Dara Mac Dónaill

The Government – or its successor – faces a difficult job in plotting the future of the Covid-19 income and wage supports. Due to run out at the end of June, the signals are that they will continue for a bit longer – Taoiseach Leo Varadkar said as much in the Dáil on Thursday. However he added that they could not continue forever. The Minister for Finance Paschal Donohoe has referred to a “ pathway” – presumably one which sees the schemes being phased out at some stage. But how, and when, will be politically incendiary and have a big impact on many people and businesses. Meanwhile, the big rise in unemployment will push the Government into a much more active involvement in the jobs market.

1. The backdrop

Before the crisis 2.36 million people were in work in the Republic. Now, more than one million of those are on some kind of State income supports. Close to 600,000 are on the Pandemic Unemployment Payment (PUP) of €350 a week. A further 427,000 are having their wages supported by the Government temporary wage subsidy, generally to a maximum of 70 per cent of earnings (with some exceptions) up to €410 a week. To this, in terms of State payments, we can add around 200,000 people who were on the Live Register before the crisis started.

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