Pandemic payments will ‘significantly’ support incomes – ESRI

Special unemployment pay and wage subsidies may avoid extreme income reductions for many families

Photograph: iStock

Photograph: iStock


Government measures to help workers hit by the coronavirus outbreak will “significantly” cushion incomes, the Economic and Social Research Institute (ESRI) said.

The flat-rate pandemic payment, which pays €350 per week to those who have lost their jobs due to Covid-19 shutdowns, has the most impact in terms of supporting incomes, the research from ESRI found. In a medium unemployment scenario of 600,000 job losses, that payment reduces the number of workers who lose more than 20 per cent of their disposable income by around a third.

“The government’s policy response will significantly reduce the number of families who see extreme reductions in their income as a result of job losses related to the ongoing Covid-19 pandemic,” ESRI economist Barra Roantree said. “However, the rise in unemployment will bring significant costs to the exchequer: around €800 million per quarter for every 100,000 individuals who lose their job.”

The research simulates the effect large numbers of job losses will have on families’ incomes, both with the additional measures announced by the government and without them.

The most recent Live Register figures showed a total of 714,000 people are now receiving social welfare income payments, with 507,000 people being paid the €350 Covid unemployment benefit.

The Temporary Wage Subsidy Scheme, which provides a subsidy of up to 70 per cent of an employee’s take home pay up to a weekly limit of €410, may be minimal cost the State, ESRI said, describing it as “less generous” to lower earners than the Pandemic Unemployment Payment. More than 39,000 employers have registered for the Covid-19 wage subsidy scheme since it was established.

“A central aim of the Temporary Wage Subsidy Scheme is for companies to retain links with their employees so they can resume activity faster once necessary public health measures have been relaxed,” said ESRI economist Karina Doorley. “Ensuring that both employees and employers have an incentive to take up this payment is important to ensuring it achieves this objective.”