Donohoe running up against 'hypocrisy' of two unemployment payments, says Ictu adviser

Paschal Donohoe is running up against “the hypocrisy” of the weekly unemployment payment of €350 and the much lower €203 payment, as the finance minister juggles the costs with the need to support of the economy, a leading adviser to the Irish Congress of Trade Unions has warned.

Tom McDonnell who heads up the think tank, the Nevin Economic Research Institute said the separate payments - the €350 a week paid to the thousands who lost their jobs since March and the €203 paid to longer-term unemployed who had lost their jobs before March - was unsustainable in terms of justice.

Mr McDonnell said that Mr Donohoe will some under pressure because paying the €350 payment was effectively an admission by the Government that the benchmark €203 payment a week for the regular unemployed wasn't sufficient for people to make ends meet.

Mr McDonnell, who is a member of a government planning committee for the Covid-19 emergency, said he expects the finance minister to start tapering the Covid-19 main payment and the wage-support scheme from August or September, during the final phases of the return to work. 

However, he said there could be constitutional problems extending the pandemic payment and the separate wage-support scheme when they come to an end at the end of June because there is no new government in place.

Mr McDonnell said that extending the €350 a week payment will raise the issue of “economic justice” and the courts would have to decide on the issue if there were ever a legal challenge over the two rates.

He said the economy would suffer more damage if the €350 weekly payment were tapered too quickly and any process wold likely be achieved on a gradual basis.

During Dáil questions, Minister Donohoe said extending the Covid-19 unemployment payment to the end of the year would raise questions about increasing the regular unemployment payment.

The latest figures to last Friday show there are 585,000 people on the €350 a week payment; 464,000 people whose wages are being supported; as well as 215,700 people who were on the regular unemployment count at the end of April.

That means 1.24 million are availing of some sort of Government support accounting for two thirds of all private sector workers.

Minister Donohoe said he was examining the best way to ensure that women returning from maternity leave can tap the wage-support scheme and that it was never the intention to stop new mothers for using it.

Minister Donohoe confirmed that the budget deficit would head close to €30bn this year as the exchequer accounts for the costs of the economic fallout and the hit to tax revenues of the Covid-19 pandemic.

The Government had also injected €13bn into the economy since the onset of the crisis, he said.