The wages of newly hired workers could be subsidised by the State under a new stimulus plan.
With the new Government keen to reduce the number of people receiving Covid-19 unemployment payments, the plan could see the State subsidise wages of newly hired staff.
The plan, soon to be announced by the Government, would be aimed at helping to stimulate economic recovery, according to the Business Post.
It would be hoped that the new scheme could support businesses as they try to recoup some of the losses incurred over the last four months, while also reducing the number of people receiving the weekly €350 Covid-19 unemployment payment.
At the moment, just under 439,000 people are receiving the weekly unemployment payment.
Meanwhile, the current Temporary Wage Support Scheme is only available to businesses and their staff who were employed before the pandemic began. The incomes of 405,000 employees are currently being supported by the State through this scheme.
It is hoped that the new stimulus plan, in which the State will subsidise wages, will encourage businesses to hire some of those currently on the Covid unemployment payment.
Details of the plan, and the future of the wage support and the Covid unemployment schemes, are expected to be announced by the middle of this month as part of the Government’s July jobs stimulus package, according to the Business Post.
Meanwhile, changes to the pandemic unemployment scheme are already coming into effect this week, and its future remains uncertain.
The original weekly payment of €350 a week will now only go to people who earned €200 or more before the pandemic.
However, those who earned less than €200 a week prior to lockdown will see their weekly payment cut down to €203, the same rate as the standard payment under the Jobseekers Benefit scheme. The scheme is due to expire on August 10.
Members of the business community have insisted that continued State support is needed for economic growth and recovery.
Last week, Fergal O’Brien, director of policy with employers’ group Ibec, called on the new Government to assist businesses as part of the July stimulus package.
He said: “We need to save as many businesses and jobs as possible and it’s urgent that happens over the month of July.
“We need a simple grants system that will work, lower cost loans and support for hospitality and domestic businesses to get people in jobs and back spending.”
On Friday, the Central Bank of Ireland predicted that the Government’s budget deficit will rise to over €23billion this year - and this is before the additional costs under the July stimulus measures are taken into account.
The financial regulator also warned that, according to a worst-case scenario, the deficit could reach over €30billion if the pandemic makes an early return.
However, it also said Government supports for struggling businesses should remain in place for the moment.
