Covid-19 unemployment payments to cost Exchequer €5bn for three months
The Covid-19 unemployment payments will cost the Government just under €5bn for three months, according to an analysis by the Economic and Social Research Institute.
The ESRI also warns that the cap on higher earners in the wage subsidy scheme may encourage firms to lay off those employees rather than retaining them.
The Government has introduced a range of social welfare supports including the Covid-19 Pandemic Unemployment Payment and the Temporary Wage Subsidy Scheme.
This week the Department of Social Protection said 507,000 people have already received the Pandemic Unemployment Payment.
The ESRI has examined the cost and benefit of the schemes.
Under a medium unemployment scenario, the ESRI forecasts that 600,000 jobs could be lost. This, it believes, will cost the Government €4.9bn for three months under the current schemes.
It finds the schemes will cushion the impact on the incomes of lower earners but less so for higher earners.
It warns that excluding higher earners from the Wage Subsidy Scheme may lead to firms laying off these workers, which would go against the purpose of the scheme.
Conversely, it also points out that some lower paid and temporary workers would be better off unemployed than remaining in subsidised but lower paid employment.
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