Government faces political battle over any changes to Covid-19 payments

The Government faces a political battle over any changes to the special Covid-19 payments, opposition groups have warned, as Minister for Finance Paschal Donohoe again suggests that the payments will not continue indefinitely.

Government income and wage supports introduced in response to the Covid-19 crisis are set to be reduced in the weeks ahead, Mr Donohoe indicated again this morning, though he said they will continue in a modified way beyond their current expiry date of the end of June.

But a Dáil battle over changing the pandemic payments is certain, with People Before Profit TDs warning this morning that they will fight such a move. And in the Dáil on Wednesday, Mary Lou McDonald warned the Government not to cut the payments.

The Temporary Wage Subsidy Scheme and the Pandemic Unemployment Payment, due to expire in June, will continue "in a form", Mr Donohoe told RTÉ radio's Morning Ireland, The payments will continue "in a way that is affordable but also makes sense for our citizens".

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Changes are due to be made on Wednesday to the way the wage subsidy payments are made, to make sure it is more effective for those on lower incomes and the scheme is keeping more than 400,000 people in a job which is critical, said Mr Donohoe. A further 598,000 people are claiming the €350 a week pandemic unemployment payment, according to the latest figures.

Decision

However, Mr Donohoe said the two payments are costing many hundreds of millions of euro each week and that “a pathway for both of those payments” would have to be decided. The level of the payments and how they will be made available are something which the Government will make a decision on soon, he said.

Speaking at Leinster House, People Before Profit TD Richard Boyd-Barrett said: “We put €64 billion into bailing out the banks . . . I think we can well afford to protect the incomes of workers who have lost jobs as a result of a public health emergency and to use the very considerable wealth that exists in this country, to share it out in a fairer way, to ensure that working people and key public services do not suffer pain and austerity on the other side of this public health emergency”.

Mr Boyd-Barrett suggested that the government should introduce “wealth taxes” or target “extremely profitable multinationals who pay little or no tax.” He said there are “plenty of places other than rifling the pockets of workers to protect workers income and jobs.”

The government will continue to help citizens adapt to the huge changes in their living standards, he said.

The latest exchequer returns show the Government’s budget deficit – the difference between what it spends and what it collects in tax – swelled to €7.5 billion in April, more than twice the level recorded at this stage last year.

The forecast deficit could rise beyond €23 billion, the Minister warned, depending on the success achieved in overcoming the public health challenge.

Different timescales

The Government faces difficult decisions on both the wage subsidy and pandemic unemployment payments. On the wage subsidy scheme, businesses are returning to work on different timescales and many say they need an ongoing subsidy if they are not to make people redundant, given the likely lower level of business.

The pandemic unemployment payment of €350 a week is well above the €203 a week basic jobseekers benefit. Taoiseach Leo Varadkar appeared to indicate on the Late Late show that the payment would be available until sectors had reopened, but the issue for the Government is that many workers will not be re-employed immediately. Mr Donohoe indicated last weekend that there could not be three different types of unemployment payments in the longer term – those that applied to people who lost their jobs before, during and after the Covid crisis.

The deaths of another 23 patients were announced by the National Public Health Emergency Team (Nphet) at its briefing on Tuesday. There have now been 1,339 Covid-19-related deaths in the Republic. The total number of cases stands at 21,983.