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Covid costs Pandemic unemployment payment to be reviewed in June - but no 'cliff-edge' ending

Around 465,000 people unemployed due to the Covid-19 crisis are receiving payments of up to €350 a week, costing nearly €140million a week currently.

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Finance Minister Paschal Donohoe has said there will be no 'cliff edges' as wage supports are wound down. Photo: Reuters/Hannibal Hanschke

Finance Minister Paschal Donohoe has said there will be no 'cliff edges' as wage supports are wound down. Photo: Reuters/Hannibal Hanschke

Finance Minister Paschal Donohoe has said there will be no 'cliff edges' as wage supports are wound down. Photo: Reuters/Hannibal Hanschke

Minister for Finance Paschal Donohoe said supports to the Irish economy would continue into 2022 - but the pandemic unemployment payment would be examined in June.

However, he added that there will be no “cliff-edge ending” to pandemic supports.

The minister said that while the Government will be adjusting support “as health circumstances improve” it will not be done in a way that could “undermine our ability to recover”.

Around 465,000 people unemployed due to the Covid-19 crisis are receiving payments of up to €350 a week, costing nearly €140million a week currently.

Minister Donohoe has been chairing the Eurogroup meeting of finance ministers, where it has been agreed a supportive budgetary stance needs to remain in place until next year.

Minister Donohoe said there was a journey ahead to “help the economy recover” and said that €12bn economic supports had been put in place to help society during the pandemic.

However, Mr Donohoe told Newstalk he would be providing “detail in June when we have to make a decision” on pandemic unemployment payments.

But he did warn that the pandemic measures cannot last indefinitely.

"We've lots of emergency measures in place that are costing well over €1bn per month - and we won't be able to continue with those big emergency spending programmes when we get through the health emergency,” he said.

"If we continue for them, we'll either have to borrow at a time in which we won't have to borrow - or at that point, that will force a change in our taxes.”

Higher levels of taxes are an issue “for years to come”, he said and added “it will depend on if we want… a bigger state and government than we have at the moment…”

Further information on the way forward for the Irish State would be forthcoming in the Budget in October, Mr Donohoe stated.

By then, it was hoped health circumstances might “be clearer” when reflecting on the economy. “We have put in place €12bn in support to date,” he said.

“We made clear there won’t be a cliff-edge to that support.”

Mr Donohoe urged the population to continue with social distancing restrictions over St Patrick’s Day, as “more of our children go back to primary schools.”

He said it “would be a pity to mark St Patrick’s Day by making someone you love sick.”

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