As the country prepares to enter phase 1 of the rewinding of the COVID-19 lockdown, some of the potential consequences of the €350 pandemic emergency payment are coming to the fore.

Some Co.Wexford based business people have expressed concerns about the payment, and the lack of incentive for some people to return to work when required. This relates in particular to minimum wage staff, those working part time or a small number of hours.

The realities of this dilemma for some workers and employers are obvious when we look at some examples.

Minimum Wage Employees

Take the person on minimum wage (€10.10 per hour) working 40 hours per week. Since the lockdown was called, may of these workers will have received €350 payments. Their usual weekly salary before deductions would have been €404. An individual currently on the payment would be in a position where they have to incur all of the expenses and the potential health concerns of returning to work, for just €54 more than they currently are getting for staying safely at home. The main expenses of returning to work are travel costs, and childminding costs in some cases. The other issue at play is the difficulty some may have in sourcing a childminder. It is a time when most children would still be in school, and under normal circumstances those parents would not have to worry about having to arrange child-minding.

Part-Time and Student Employees

The second category of people who may be reluctant to return to work are those working part-time or students with Saturday jobs. For someone who usually works 9 hours on a Saturday and earns €91, there is not much incentive to leave the €350 payment.

Employers

It is also a dilemma for the employer. Some business people have informed WexfordToday that they are in two minds whether to re-open straight away or not, due to the obvious fears of not being able to make a profit or even earn enough to cover costs, including staff wages. It may be more appealing and less risky for some businesses to remain closed and have staff remain on the pandemic payment.

COVID-19 Payment Going Forward

These considerations must be taken into account by the Government over the coming days. It should come as no surprise to people that the COVID-19 payment may be scaled back alongside the scaling back of the lockdown restrictions, in order to incentivise people to return to work. The rate of €350 across the board may have felt like a bonanza to those not used to earning such an amount, particularly when opportunities for spending have been so limited. It has also provided students with a great opportunity to save, to help deal with many of the expenses which go hand in hand with going to 3^rd level.

One potential course of action which may be decided by the government would be to remove the availability of the payment in stages, to correspond with the phase at which businesses in that particular sector are allowed to re-open. For example, at the point when restaurants can re-open, it would be an obvious time then to stop the payment to those who were working in the restaurant sector. Likewise on the date when pubs can re-open, the government may then decide to stop paying those who were employed in pubs. One would assume under such an approach that if a business was in a position where they had to reduce their staff numbers, then any laid off staff would move off the COVID-19 payment onto the regular unemployment payments.

When contacted, Minister Paul Kehoe told WexfordToday:

“the government are acutely aware of the concerns of some employers. I have passed on the issues raised by those who have been in contact with me over the last number of weeks, and the government are working on plans in relation to this payment going forward.” 

Other Considerations for Students

Another related issue with the payment for students is the possibility that the €350 may be included in the means test or the income criteria for certain entitlements, for example, the SUSI grant scheme for 3^rd level students.

If a student went from earning €50 a week to receiving €350 a week under the COVID-19 payment, this extra income may be enough to put an applicant over the income threshold and either reduce or eliminate any grant entitlements which previously existed.

Likewise, if one of the student’s parents went from earning €200 per week as a part-time employee and has since been in receipt of €350, this may also put some applicants above the income threshold.

These scenarios are particularly relevant for those who would only barely qualify under normal circumstances. It will be interesting to see if any decisions are made in relation to this over the coming weeks, but certainly students and parents should be aware of the possibility of this happening.

The main message is that changes to this payment are inevitable. The government have yet to announce exactly what the changes will be, but we should be prepared for its gradual withdrawal over the coming weeks.