The Minister for Finance has said the Government will have a better idea next month what impact the reduction of the employment wage supports is having on vulnerable firms.
Paschal Donohoe said it is difficult to form a view as to the number of employers who may see their viability effected as we move through the phasing out of the Employment Wage Subsidy Scheme, but it should become clearer in March.
“At that point, we will see one group of employers who are not based in the hospitality sector already moved to the lower phase of the EWSS,” he said.
“And at that point we will also begin to see hospitality businesses move off the higher rate of up to €350.”
He added that recognising the risk to firms was the key reason why the Government made the decision to run the scheme for so long.
The movement of businesses off the scheme has long been recognised by the Government as a “moment of risk” for some, he said.
He said many hospitality businesses who move off the scheme in April and May will have been on the higher rate for two years.
“We’ve maintained them at that level for two years because we’ve known these businesses were viable before the pandemic, and this Government has given them every support that we can to get them ready for this moment of change,” he claimed.
He said the issue would be monitored on a monthly basis through the year.
Yesterday, a PwC report estimated that Government pandemic supports have saved at least 4,500 Irish companies from going bust – an average of 50 companies every week.
The report said that while the businesses avoided insolvency, they will need further support to repair their balance sheet.