Slow decline in jobs depending on €1.7bn wage-subsidy scheme
New figures for the number of people and employers needing wage-subsidy scheme, at a cost so far of €1.7bn, suggest the economy could require the continuing support of huge amounts of public money for some time to come.
The latest Revenue figures show the number of people whose jobs are in some way currently supported by the Temporary Wage Subsidy Scheme, or TWSS, fell to 405,000, down by only 5,000 from a week earlier despite the continuing opening up of the most exposed parts of the economy, including construction and retail, in recent weeks.
The number of employers who have received a payment during the lifetime of the wage-scheme rose to 56,900 from 55,500 and the amount paid out under the scheme has risen to almost €1.7bn, according to the Revenue figures.
In the latest week, the cost to the exchequer was €109m, up slightly from the previous week.
That compares with the peak weekly cost of €282m in late April.
The TWSS was introduced in late March as one of two main Government schemes, along with the Pandemic Unemployment Payment, that were urgently needed to keep many firms afloat and to prevent unemployment from soaring to unprecedented levels.
The TWSS was called “temporary” because the scheme which was originally planned to end this month has since been extended through August.
Business groups have said it may need to be extended by many months more.
The Revenue figures show a fifth of all employees in the scheme whose wages are being supported have availed of the programme for 13 weeks, while 2% have tapped it for a period of two weeks.
Taken along with the 465,900 receiving the pandemic unemployment payment and the 225,600 on the official unemployment count, there are almost 1.1 million people whose income depends on some sort of Government welfare payment over three months since the onset of the Covid-19 economic crisis.
Seamus Coffey, UCC economist and former chair of the Irish Fiscal Advisory Council, said the Revenue figures highlight the extent to which the economy depends on services jobs such as retail and hairdressing.
The third phase of the reopening may lead to a more rapid reduction in the numbers availing of the wage-subsidy scheme but if that were not to happen, the recovery could be more drawn out than many expect, Mr Coffey said.
Earlier this week, Revenue said that it was writing to all the firms that have availed of the wage-subsidy scheme to supply documentary evidence that they were eligible to receive the payments.
Revenue continues, however, to have no plans to publish the list of firms who have availed of the wage-subsidy scheme until the programme ends.
Other figures show that a debt warehousing scheme for Vat and employer-Paye payments for firms unable to pay the Revenue during the first three months of the lockdown has amounted to €1.5bn.
Revenue said more than 65,000 firms had tapped the warehousing scheme for liabilities of €853m in Vat and €646m of Paye- employer contributions.
