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Paschal Donohoe: 'Wage subsidy scheme will not disappear overnight'

The Pandemic Unemployment Payment and the Temporary Wage Subsidy Scheme will be extended beyond the original June end date.

Image: Shutterstock/sebra

FINANCE MINISTER PASCHAL Donohoe has said the wage subsidy “will not be disappearing overnight”.

Speaking to reporters at a press conference on the latest Exchequer figures, the minister said any decisions on the future of the scheme will be based on trying to balance the unwinding of the scheme and keeping people in jobs.

Last week, Minister for Employment Affairs and Social Protection Regina Doherty told the Dáil she will bring forward proposals for some changes to the Covid-19 Pandemic Unemployment Payment and the wage subsidy scheme within the next week or so.

Doherty reiterated that the Pandemic Unemployment Payment and the Temporary Wage Subsidy Scheme will be extended beyond the original June end date.

“As we speak, there are over 400,000 jobs that may not be in place if it was not for the existence of the wage subsidy scheme,” said Donohoe.

The minister added that the government is hoping to make an announcement in the coming days that will outline the “future of the wage subsidy scheme across coming months into the future and the pandemic unemployment payment – we want to give guidance for both of those”.

“I’m absolutely aware that this subsidy scheme is currently keeping hundreds of thousands of citizens in a job who would otherwise may not have one,” he said.

The minister added that this was the purpose of the creation of the scheme.

“I think it’s going to be fair to say that we’ll be very careful with how we adjust it,” he added.

When asked if there will be a lengthy period of adjustment, the minister replied:

“I haven’t decided on that yet. One of the things that we are trying to evaluate at the moment is we are now approaching the end of the first phase of the reopening of the economy. And in a few weeks time we will be able to understand how companies who are on the scheme, how they change their employment and their wage levels as their part of the economy reopens. We don’t have that information at the moment. When we have that information through it will guide us regarding decisions that I make on the rest of the wage subsidy scheme.”

Donohoe said concerns employers have regarding the disappearance of wage subsidy scheme, and the effect that it will have on jobs, is something he “absolutely understands”.

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Having said that, the minister said the wage subsidy scheme can’t continue forever.

“It is a hugely significant intervention in our economy. And it is one that cannot be sustained forever,” he added.

Speaking last month about the extension to the schemes, Taoiseach Leo Varadkar said there can’t be a situation whereby different schemes apply to unemployed.

He highlighted that some people who became unemployed before Covid-19 are receiving Jobseekers Benefit, while those who became unemployed during Covid-19 are on the €350 pandemic payment.

Those that become unemployed after Covid-19 will also have to be placed on a social welfare regime.

“At some point we’re going to need to pull them all together,” he said. 

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