Potential legal challenge to influence ‘tapering’ of Covid-19 jobless payments

The Government will try to stave off any potential legal challenges to the fairness of its Covid-19 welfare payments by raising the standard weekly unemployment payout even as it starts cutting the Covid-19 pandemic payments, according to a trade union think tank.
Potential legal challenge to influence ‘tapering’ of Covid-19 jobless payments

The Government will try to stave off any potential legal challenges to the fairness of its Covid-19 welfare payments by raising the standard weekly unemployment payout even as it starts cutting the Covid-19 pandemic payments, according to a trade union think tank.

1.24 million people have lost their jobs or been forced to avail of some type of Covid-19 jobless payment. The Government has talked about “tapering” the level of the €350 pandemic payment to rein in the €1.5bn monthly cost of the schemes, as parts of the economy start-up again in coming months. It has committed to extending the schemes when the current 12-week programme ends at the end of June.

However, Tom McDonnell, co-director of the Nevin Economic Research Institute, the trade union think tank that sits in on Government meetings during the crisis, said it is understood in official circles that gradual reductions in the weekly €350 pandemic payment introduced in March will have to go with increases in the weekly €203 official unemployment payment.

The different level of payments for people who have lost their jobs before Mar 1 and getting €203 a week, and for those receiving the €350 payment after Mar 1, was so stark that there was an understanding the payments would have to coalesce over a number of months, Mr McDonnell said.

A successful legal challenge over fairness would become much more likely as the Covid-19 schemes are extended, if the unemployment payments are not brought closer together, Mr McDonnell said. The scale of the jobless crisis was revealed again in official figures yesterday which showed that 1.24 million people — an unprecedented 65% of the private sector workforce — were either on the live register unemployment count, or were availing of the Covid-19 pandemic unemployment payment, or benefiting from a wage-support scheme, in April. The official count shows that 28% of the total labour force were jobless.

Finance Minister, Paschal Donohoe, has reiterated that the Covid-19 pandemic payment will be tapered over time. He told a PwC accountants’ webinar yesterday that the Government will publish proposed changes to the pandemic payment and wage-support schemes in the coming weeks.

Taoiseach Leo Varadkar said people will lose their eligibility for the Covid-19 pandemic payments if they refuse to accept their old job back, adding that the Government schemes “can’t last forever" and will be withdrawn gradually. He told Pat Kenny on Newstalk: "Bear in mind if you are offered your job and you refuse to take your job back, you’d lose eligibility for that payment. But that hasn’t arisen yet and in some cases that may not arise until Aug."

Meanwhile, the Cabinet has approved a State guarantee to underwrite the travel industry, decimated by the pandemic. Transport Minister Shane Ross received Government proposals to protect the Travel Trade industry. It has been confirmed that ministers agreed to provide a State guarantee for a special form of refund credit note for package holidays booked through Irish-registered travel agents and tour operators.

On the costs, the Department of Finance said the two main Covid-19 jobs schemes cost €1.5bn in April, with the wage-support programme costing €600m, and the pandemic payments costing €900m in the month.

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