FUNDING FOR the employment subsidy scheme has been almost halved, to €135 million.
Some €250 million was originally earmarked for the scheme, launched in August as a way to encourage businesses to keep staff.
Under its initial terms, “vulnerable but viable” exporting companies could apply for a subsidy of €9,100 per qualifying employee.
Last month the Tánaiste announced the scheme would be extended to non-exporting companies, following criticism from business groups that the eligibility criteria were too restrictive.
Yesterday the Department of Enterprise, Trade and Employment announced that €65 million would be allocated to the second phase of the scheme, bringing to €135 million the total allocated.
A department spokeswoman said the drop in funding was due to poor take-up of the first phase of the scheme, and that funds may be increased if there was sufficient demand.
The second phase is open to exporting and non-exporting companies that employ more than 10 people.
Unlike the original scheme, the second phase distinguishes between two categories: employees who work 35 hours or more, and those working 21-35 hours per week.
Employers with workers in the first category will receive a subsidy of €9,100, paid over a 12-month period for each subsidised job, while those in the second category will receive €6,370.
Tánaiste Mary Coughlan said the second phase took account of the fact that many firms had cut working hours.
Enterprise Ireland, which administers the scheme, will begin accepting applications from 2pm on Tuesday. The closing date is December 23rd.
Isme, representing small and medium-sized businesses, strongly criticised the details of the scheme, saying it discriminated against firms employing fewer than 10 employees.
The Irish Exporters’ Association was also unhappy. “Spreading the employment subsidy fund to importers and general traders will inevitably dilute the impact of the fund to support the retention of exports, which is the key route to balancing the exchequer and driving the economy out of recession,” its chief executive, John Whelan, said yesterday.
