Jack Quann
Jack Quann

11.58 20 Jun 2020


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An economist says the Government's Temporary Wage Subsidy Scheme needs to be targeted at those who need it most.

Conall Mac Coille is chief economist at Davy.

He told Down to Business the scheme should not be a blanket payment to all workers.

"In terms of the Temporary Wage Subsidy Scheme, the point there was to kind of keep workers linked to their previous place of employment - so when the company opened up again it could do so in a much more easy way, and of course to protect people's incomes as well."

"I think as the economy begins to open up... it wouldn't be appropriate that these schemes are still there - but that should be kind of a gradual process.

"Arguably, and ideally, you'd want to target really at the companies that most need it.

"There's very little reason that you should be paying the wages of companies where the company is profitable, for example.

"There's very little reason that we should be giving part-time workers, who are only working one or two hours a week, €203 or €350."

"I think the least we can do is to make sure that it's targeted and it's targeted not at part-time workers who may be living at home with their parents - but it is targeted to households who are struggling to pay their bills.

"We're all in favour of supporting people through this difficult period, but unfortunately targeting these payments in this measure too often gets unfairly tarnished as simply targeting the low paid.

"That's not the point: the point is to give the money to the people who need it the most".

But he said the schemes were a necessity to help the economy cope with the pandemic.

"I think the schemes needed to be implemented.

"What was slightly undesirable about them was that they created - in the case of the €350 payment - an incentive for people not to work.

"The Department of Business and the Government has recognised that that will have to be phased out if you want to open the retail sector.

"The retail sector is based on younger, part-time workers who are often earning close to or just above the minimum wage.

"I think that that scheme will be tapered back, we're seeing that now.

Last week, some 33,000 people closed their claim for the Pandemic Unemployment Payment (PUP) of which 27,600 reported that they were returning to work.

As well as those availing of the Pandemic Unemployment Payment, there are now over 60,600 employers who have registered with the Revenue Commissioners for the Temporary Wage Subsidy Scheme - with at least one subsidy being paid in respect of over 532,000 people under that scheme since it began.

An estimated 400,000 employees are currently being supported by the scheme having received a subsidy in their most recent pay period.

COVID-19 Wage Subsidy Scheme 'needs to be targeted'

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Main image: People walk along a street in Dublin city as more businesses and public amenities re-open. Picture by: unreguser/Xinhua News Agency/PA Images

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Conall Mac Coille Davy Down To Business Economy Ireland Pandemic Unemployment Payment Targeted Payments Temporary Wage Subsidy Scheme Workers

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