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State to pay the wages of thousands with €3.7bn in supports

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Plans: Minister for Employment Affairs and Social Protection Regina Doherty at a press briefing yesterday. Photo: Steve Humphreys

Plans: Minister for Employment Affairs and Social Protection Regina Doherty at a press briefing yesterday. Photo: Steve Humphreys

Plans: Minister for Employment Affairs and Social Protection Regina Doherty at a press briefing yesterday. Photo: Steve Humphreys

Thousands of workers will have most of their wages funded by the State in an unprecedented €3.7bn income support package for those worst hit in the economic fallout from the coronavirus pandemic.

Thousands more will get an increased emergency welfare payment worth €350 a week as part of a suite of measures drawn up to help staff affected by mass lay-offs.

The new supports will be rolled out for 12 weeks initially, but may be extended if the crisis continues.

A total of 118,000 people have already applied for emergency welfare supports and many more are likely to follow suit after the Government announced a shutdown of non-essential businesses.

The income support package was unveiled by the Taoiseach as the Government was warned that at least 500,000 jobs are expected to be lost as a result of the pandemic.

In a briefing memo, the Cabinet was told that while it is almost impossible to predict the scale of employment loss as a result of the crisis, it is "expected at a minimum to be 500,000 jobs".

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Puts minds at ease: Patricia King, of the ICTU. Photo: Damien Eagers

Puts minds at ease: Patricia King, of the ICTU. Photo: Damien Eagers

Puts minds at ease: Patricia King, of the ICTU. Photo: Damien Eagers

The dire warning came as Employment Minister Regina Doherty said that her previous prediction that some 400,000 jobs could be lost was "a conservative figure".

The warning that at least half a million jobs could go came at a special Cabinet meeting which lasted for just under two hours in Government Buildings, with ministers divided in two separate rooms and some joining the meeting via video link.

"We are living in unprecedented times and the Covid-19 virus is presenting a once-in- a-century challenge to Irish society - testing our cohesion, our resilience and our ability to respond," said Ms Doherty.

An increase in the emergency pandemic welfare payment and a new wage subsidy scheme are the centrepieces of the Government plan.

The pandemic payment is set to rise from €203 to €350 a week by the end of this week.

The State will also fund up to 70pc of wages, to a limit of €410 a week, for those on incomes up to €38,000 a year. It will also provide a subsidy of up to €350 on earnings between €38,000 and €76,000.

General secretary of the Irish Congress of Trade Unions (ICTU) Patricia King said the wage subsidies will help put workers' minds at ease and enable them and their families to meet the immediate challenge - beating Covid-19.

"These measures are essential to protecting the productive capacity of the economy and preventing a depression," she said.

Ibec CEO Danny McCoy said the announcement will play a crucial role in enabling the economy to bounce back at the other end of the crisis.

"It is welcome to see courageous leadership from Government, in particular with the announcement of a temporary wage subsidy scheme and the enhanced unemployment supports and illness payments," he said.

Economist Tom McDonnell of the NERI said the package was not quite as generous as UK Prime Minister Boris Johnson's but was to be welcomed.

"The Dutch are paying up to 90pc in a similar scheme," he said. "But then, the Americans are not doing anything like this. We might have been slow out of the gates but at least we are running around the track."

However, Isme chief executive Neil McDonnell said some businesses are on the brink and will not be able to afford to wait a week to get a refund of the wage subsidy from Revenue. He said a new State loan scheme has too many terms and conditions.

Tax partner at EY Ireland Michael Rooney said we are asking a lot from small business owners, including restaurant bosses and shopkeepers, to pay the remaining 30pc of employees' pay for the next 12 weeks without knowing when the crisis will end.

Irish Independent


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