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Nobody on the pandemic payment is 'living it up', says Finance Minister

The CEO of Supermac’s said the pandemic payment was like ‘winning the lotto’ for part-time workers.

Image: Leon Farrell/Photocall Ireland

Updated May 28th 2020, 4:15 PM

FINANCE MINISTER PASCHAL Donohoe has told the Dáil he does not think people in receipt of the €350 pandemic payment are “living it up”. 

Donohoe’s comment was in reference to a remark made by the CEO of Supermac’s who likened the government’s Pandemic Unemployment Payment (PUP) to “winning the lotto” for many part-time workers. 

Donohoe said: “There is no suggestion from me or anyone in the Government that anybody who is on the pandemic payment is in any way living it up.

“Believe me, I understand the contribution that people on low income make to this society for the work that they do.”

Speaking on RTÉ’s Today with Sarah McInerney this morning, Pat McDonagh – who co-owns the Galway-based outfit – said there is no incentive for workers earning more money on PUP to come back to work, and that the payment needs to be reviewed to “give some people more and other people less”.

McDonagh insisted he has never called for the abolition of the Covid-19 unemployment benefit but said some anomalies have developed over time which need to be addressed. 

“Where we have a mother and son working for us. He’s a student, he worked eight hours a week, he got somewhere between €80 and €100 a week. She was full time, and she has to look after elderly parents, and rightly so. And both qualify for the €350 Covid payment.

“Now I felt, and I do feel that the mother will be entitled to get a bit more than the son who was, as I say, only worked one shift a week, but he equally gets €350. Now, there’s no incentive for him to come back to work because he’s on a winner, he’s won the lotto. 

“Why would he bother coming into work when he can sit at home and get €350 into his account every week,” McDonagh said. 

I think she should be entitled to get probably €450 or €500. And on the other hand, I think the young lad should get no more than what he was making when he was a part-time employee, and that will incentivise him to come back to work.

Speaking on the same programme, Labour TD Ged Nash said he could assure McDonagh that “no one is living high on the hog on PUP”. 

“It’s really offensive and insulting, the kind of language Pat uses, that he’s used referring to the young man that he’s decided to isolate in his comment there as having somehow won the lotto because he happens to be having an income of €350 a week having lost his job through no fault of his own, or in fairness no fault of the business that employed him.”

Nash said there are some people who are on the payment who are taking home a little bit more than they did when they were working, but that real scandal is low pay. 

“Most people I’ve met who lost their jobs through no fault of their own want to get back to work because there’s a dignity about work, but they want to go back to work that ensures that they earn a weekly pay package that allows them to make ends meet.”

McDonagh told McInneary that the business can’t afford to pay employees higher wages to incentivise them back to work because of the way the company has been hit financially by the pandemic. He said the company would be lucky break even this year. 

The Department of Employment Affairs and Social Protection has received over 815,000 applications for the Pandemic Unemployment Payment since it was introduced in March.

The latest figures show that some 579,400 people are in receipt of the payment, but 33,400 of them have recently returned to work and will not receive the payment from next week. 

McDonagh said he wants to see the PUP reviewed as well as the wage subsidy scheme for employers as there are no subsidies for women returning from maternity leave or for new employees. 

In the Dáil today, Donohoe vowed to act to ensure mothers returning from maternity leave “are treated fairly” under the wage subsidy scheme 

The Covid-19 Temporary Wage Subsidy Scheme pays up to €410 per week to an employee of a business that has lost more than 25% of its turnover, on the condition that employers keep those workers on their books.

However, due to an anomaly, women who are returning from unpaid maternity leave and were not on their company’s payroll in January and February are unable to access the subsidy.

Donohoe said he will bring a proposal to Cabinet on Friday to resolve this anomaly.

‘Gaming the system’

The Dail is sitting today to approve €5.5 billion euro in additional funding for the Department of Social Protection to continue to fund social welfare payments.

More than six billion euro has been spent on social protection support and unemployment payments for workers who have lost their jobs due to the pandemic.

Social Protection Minister Regina Doherty said the new payment system is not perfect and was introduced at “breakneck speed”, but rejected claims that people are “gaming” the system. 

“Can I just disassociate myself and anybody else who has wrongly intimated that people are gaming the system.

“Yes, there is fraud, and there is fraud in every system and every other country. We are catching those people but they are in very small numbers. There is nobody gaming the system.

“There are some people getting more from it than they would have been earning in income and there are anomalies with part-time workers.”

Fianna Fail’s Willie O’Dea said TDs are being asked to vote on billions of euro in extra funding without information on how long Covid-19 payments will continue for.

“We’re being asked today to vote in the house on a sum of six thousand, eight hundred and 40 million euro increased money for social welfare payments, which I welcome, of course, but without any information as to the future of this particular payment.”

O’Dea said while it is welcome the Covid-19 unemployment payments will be extended beyond June, people need certainty on the payment.

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“We are still without an announcement on when this will be paid until. It seems to me that the Government were happy to take the plaudits to increase the social welfare payment to 350 euro per week but they want to shirk the responsibility regarding how long this will continue.”

Doherty said she will bring forward proposals for some changes to the Covid-19 Pandemic Unemployment Payment next week.

In a report published this morning, the Economic and Social Research Institute (ERSI) advised against cutting the pandemic payment, warning that austerity measures could worsen the economic downturn caused by the Covid-19 pandemic if undertaken too soon.

Around 8% of employees are on the minimum wage in Ireland. Compared to all employees, minimum wage employees are more likely to be women, work part-time and be in the 15-24 years age bracket.

According to the ERSI’s Quarterly Economic Commentary, nearly 27,000 18-19-year-olds are claiming the PUP, close to 60% of the total number of workers in that age bracket who had a job last year.

Over 93,000, or around 47%, of those formerly-employed workers aged between 19 and 22 are in the same situation.

The border region has been the worst-hit with nearly 30% of the labour force claiming the payment, followed by South-East with 28% and the Mid-West with almost 27%.

- Additional reporting from PA

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