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new proposal Pandemic wage subsidies to be extended but PUP will still be cut

PUP due to be reduced to the same level as the jobseekers’ payment in the new year

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Social Protection Minister Heather Humphreys

Social Protection Minister Heather Humphreys

Finance Minister Paschal Donohoe announced just a month ago during his budget speech that EWSS payments would be tapered from December before being phased out entirely by April 2022. Photo: Mark Condren

Finance Minister Paschal Donohoe announced just a month ago during his budget speech that EWSS payments would be tapered from December before being phased out entirely by April 2022. Photo: Mark Condren

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Social Protection Minister Heather Humphreys

The Government is backing away from planned cuts to the Employment Wage Subsidy Scheme (EWSS) which were due to take effect December 1 as ministers grapple with the implications of reintroducing Covid restrictions.

Under a proposal due to be considered by the Cabinet’s high-powered Committee on Economic Recovery on Monday, Finance Minister Paschal Donohoe would delay the scheduled reduction in EWSS rates that were announced in Budget 2022.

Department of Finance officials have been costing out options for retaining the payments at current levels at least through Christmas instead of slashing them by more than 40pc as planned.

It would mean thousands of Covid-hit businesses could keep receiving payroll supports potentially up to a maximum amount of €350 per week per employee through the crucial holiday period.

Senior Government figures believe that further restrictions before Christmas are a “high possibility” amid soaring Covid numbers.

One source said that “nobody would be surprised” if further restrictions were imposed ahead of Christmas as the “writing is on the wall”.

“I think many people have accepted that it will be a quiet Christmas this year and hope for a better year next year,” they said.

The Committee on Economic Recovery, which is headed by the Taoiseach, is also expected to look at what would happen with the Pandemic Unemployment Payment (PUP) if businesses were forced to close due to new Covid-19 regulations.

It is understood the Government is trying to avoid a return of unemployed workers to the PUP and his hoping that maintaining a difference between EWSS and PUP rates will persuade employers to keep staff in their jobs.

The top rate of the PUP was originally €350 but the current highest weekly payment is €250. The payment is due to be reduced to the same level as the €203 jobseekers’ payment early in the new year before being eliminated in February.

Social Protection Minister Heather Humphreys this week insisted that the PUP will not be offered to people who lose their jobs during the current restrictions on the hospitality industry, citing widespread employment opportunities across the sector.

Last January there was a huge wave of workers moving onto the PUP as the country went into Level 5 lockdown.

At the end of October, just shy of 78,000 people were still receiving the PUP – far below the 839,000 who were getting the payment at the end of January.

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By contrast, EWSS payments were still supporting the wages of nearly 290,000 in October, with 25,800 employers taking the subsidies at some point during the month.

However, Mr Donohoe announced just a month ago during his budget speech that EWSS payments would be tapered from December before being phased out entirely by April 2022.

Under his plan, the top rate would be cut from €350 to €203 for the highest paying jobs, while a single lower rate of €151.50 per week would be established.

In March and April any job supported by EWSS would be entitled to just €100. Those changes are spelled out in the Finance Bill, which passed through the Committee stage last week and is now entering the report stage, where it will have to be changed to reflect any new plan that extends into next year.

But business groups representing the pubs, restaurants, retail and small business sectors have all been lobbying for a suspension of the proposed reductions now that the Government has restricted opening hours and told office workers to stay home again.

Some are also lobbying for the Government to fully reinstate the PUP and the Covid Restriction Support Scheme (CRSS).

Direct Covid payments to businesses and workers have cost the State €19bn. A briefing document prepared by Minister Humphreys ahead of Fine Gael’s parliamentary party meeting on Wednesday noted some people are better off applying for Jobseeker payment rather than the PUP because they may be entitled to other benefits such as the qualified adult and qualified child payment.

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