Covid-19 subsidies to cost €5bn; People on some form of state support reaches one million

The number of people unemployed or receiving some sort of emergency payment amid the Covid-19 economic crisis is in touching distance of one million — just over four weeks after the start of the lockdown.

And the cost of the schemes covering the main €350-a-week pandemic payment and the wage subsidy payment alone has now been budgeted at between €4bn and €5bn over the 12-week period to late June, compared with an original estimate of €3.7bn, the Department of Finance has said.

The huge and rapid increase in unemployment or for people whose wages are subsidised by the Government to the one million level since the middle of March has caught many economists by surprise.

The new numbers include 533,000 people on the main €350-a-week pandemic payment and 210,000 people on the live register claimant count.

In addition, Revenue chairman Niall Cody said that as of yesterday there were 255,000 people availing of the wage subsidy scheme who had received at least one payment since that scheme was launched.

That is an increase of 35,600 people availing of the wage subsidy scheme in the last week.

Finance Minister Paschal Donohoe said he had ordered changes to the wage subsidy scheme “to iron out anomalies” for earners on less than €500 a week, equivalent to €31,000 a year, and for earners on more than €586 a week, or €38,000.

The subsidy rises to 85% of pay from 70% at some wage bands.

“Increasing the wage replacement rate from 70% to 85% on earnings up to €24,400 and the value of the subsidy to €350 on earnings between €24,400 and €31,000 goes a distance in doing what we asked of Government and, importantly, protects jobs and the worker-employer relationship during the emergency to facilitate a rapid recovery,” said Patricia King, general secretary at the Irish Congress of Trade Unions.

Danny McCoy, chief executive of business group Ibec, said the wage support scheme will help both firms and employees.

“It will continue to play a vital role in enabling the economy to bounce back at the other end of this crisis, helping vulnerable firms to stay afloat and keeping their employees engaged whilst protecting the incomes of individuals,” he said.

Meanwhile, the European Commission held out hope for a co-ordinated approach across the EU when the time comes for lifting the health restrictions.

The Commission said its “roadmap” of guidelines is based on science and on expanding testing for the virus.

“At a minimum, member states should notify each other and the Commission in due time before they lift measures and take into account their views,” said the Commission.

“Saving lives and protecting Europeans from the coronavirus is our number one priority. At the same time, it is time to look ahead and to focus on protecting livelihoods,” said European Commission president Ursula von der Leyen.

Dermot O’Leary, chief economist at broker Goodbody, said that the guidelines were important to prevent member states going their separate ways.

Opening up travel between bilateral states will depend on the same health conditions, said Mr O’Leary.