No plan to abruptly end Temporary Wage Subsidy Scheme

The Minister for Finance Paschal Donohoe has said that while he does not know how long the Temporary Wage Subsidy Scheme will continue, it will not come to an abrupt end.

The Government scheme, which began on 26 March, has allowed employers to continue to pay their employees during the disruption caused by the Covid-19 pandemic.

Speaking on RTÉ’s Morning Ireland, Minister Donohoe said the scheme is currently keeping 400,000 people in a job, and if it were to stop suddenly, that would create the risk of jobs being lost. “The wage subsidy scheme is perhaps the most significant and radical and successful cash injection scheme that has ever been brought in.”

The value of the scheme is recognised by the Government, he noted, and it needs to come up with the right plan for it, going forward.

The Minister also said that a decision regarding reducing the Vat rate for the hospitality sector had not yet been made, but, like all things, it is under review.

“We will make a decision on that matter in July and, of course, the Budget in October allows us to look at that and other tax measures again,” he explained.

The hair and beauty industry is included in the hospitality sector and has been subject to a Vat rate of 13.5% since last year, having been at 9% prior to this.