Covid-19 unemployment support payments to be increased to €350

The Government is to increase the Covid-19 Pandemic Unemployment Support payment for people who have been laid-off due to the virus from €203 to €350.

The payment will also apply to the self-employed affected by the virus.

However, people who are already unemployed due to reasons other than Covid-19 will remain on the usual Jobseekers’ Benefit of €203.

The cabinet has also approved an emergency wage subsidy scheme under which the Government will pay 70% of a workers salary up to a cap of €410 per week net – equivalent to the after tax income of a worker on around €38,000.

Workers earning between €38,000 and €76,000 will be entitled to assistance capped at €350, while workers earning above €76,000 will be excluded from the scheme.

The scheme costing an estimated €3.7 billion will initially run for 12 weeks, and employers will be free to top-up the government’s element of the salary.

The scheme is targeted at companies hit by the collapse of economic activity triggered by Covid-19 – and employers seeking to avail of it would have to demonstrate a reduction in income of at least 25%, along with cash flow difficulties.

It is understood that the aim is to keep employees and employers connected, and make it easier to restart businesses when the crisis ends.

In addition, it was feared that the entitlement of workers on lay-off to demand redundancy payments after four weeks without work in certain circumstance could trigger a tsunami of redundancy claims, payment of which could have driven some businesses to collapse.

In that instance, the state would have picked up the responsibility to pay statutory redundancy of 2 weeks wages per year of service capped at €600 per week.

Informed sources said the scheme will be administered by the Revenue Commissioners, and there will be control checks.

The estimated cost of the wage subsidy scheme is between €3.5 and €4 billion.

It is hoped that payments will continue to flow possibly as early as next week.

Director of CIPD Ireland Mary Connaughton said the measures announced this afternoon will give much needed support for those who have lost, or at risk of losing, their jobs.

“The Government plan to pay 70 per cent of a workers’ salary – up to maximum of €410 per week – where a company in difficulty agrees to continue paying the remainder of the salary, is also to be welcomed,” she said.

Ms Connaughton said the Government now needs to consider how businesses, especially SMEs, that have already laid off staff, can take advantage of the wage subsidy scheme to re-engage and support their staff, and stay afloat.