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Over 95% on PUP would be financially better off in employment – ESRI

The payment is not a disincentive to employment, new research has found.

Image: Shutterstock/rafastockbr

THE VAST MAJORITY of recipients of the Pandemic Unemployment Payment (PUP) would be financially better off in employment, a new study from the Economic and Social Research Institute (ESRI) has found.

The study, Covid-19 and the Irish Welfare System, indicated that the pandemic payments cut the estimated average income loss for households by more than half.

It states that not all those with “weak financial incentives to work will opt for unemployment or inactivity.” The fresh research found that over 95% of PUP recipients would be financially better off in employment.

It also warns that a substantial proportion of younger people, including students, “may face sharp reductions in income when these schemes are removed”.

“While concerns have been raised that PUP disincentivises employment the vast majority of PUP recipients would be financially better off in employment,” said the ESRI’s Dora Tuda.

The fiscal think tank is recommending that supports be put in place to counteract the sharp drop in young people’s income once the schemes are withdrawn.

“Increasing the youth rate of Jobseeker’s Allowance and grants to those in education could help these groups,” the report says.

It adds that working age adults may also experience income loss in the absence of supports if the economy has a sluggish recovery.

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The ESRI also found that unemployment caused by the pandemic would have decreased household income by an average of 7% without the PUP and the employment wage subsidy scheme (EWSS).

Solidarity TD Mick Barry said this morning that employers groups should call off their campaigns for cuts in the PUP in the wake of the publication of the report.

“For the last few weeks we have heard constant comment from the representatives of some employer organisations to the effect that workers are better off on the PUP and that supports need to be slashed in order to get people back to work,” the Cork North Central TD said.

“The ESRI report undermines that line of argument. It is clear that the way to reduce the amount of money being spent on PUP is to provide work, not to cut the payments,” he added. 

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Céimin Burke

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