Employment Wage Subsidy Scheme rates will be reduced from today as part of a plan to gradually wind it down.
However, business groups and the opposition have called for the support to continue at the full rate because of the impact the most recently imposed Covid-19 restrictions are having on certain sectors.
Last month, 25,900 employers availed of the EWSS, using it to supplement the wages of around 290,400 workers at a cost of €52.7m for the month.
In total, €5.58bn has been spend on the scheme by the Government since its introduction last year.
27,900 employers remain registered for the assistance.
However, as part of its plan to gradually remove this and other supports over time, in order to avoid a cliff-edge for struggling firms, EWSS rates are due to be cut for the first time from today.
The subsidy rate per employee earning between €151.50 and €202.99 will fall from €203 to €151.50.
For workers earning between €203 and €299.99, the subsidy rate will drop from €250 to €203.
Those earning between €300 and €399.99 will see their subsidy rate cut from €300 to €203.
The €350 rate for those earning between €400 and €1,462 will decrease from €350 to €203.
However, businesses across a range of sectors, including hospitality, tourism and childcare, have called for the rates to remain as they are for the time being.
This is because many have seen the recovery in their business stall or go into reverse since the Government announced fresh restrictions and called for people to reduce their level of socialising to stem rising levels of Covid-19.
Last week, Ibec wrote to the Taoiseach to ask that the EWSS be extended until April and that it remain at the rates paid in earlier phases of the pandemic for the experience economy.
Sinn Féin spokesperson on Enterprise, Trade, and Employment Louise O’Reilly has also said the Government should delay the EWSS tapering until the new year.
“The reintroduction of certain public health restrictions for restaurants, bars, nightclubs and the live entertainment sector came as a bitter disappointment to business,” she said.
“However, it also came as a cause of concern for the hospitality sector as a whole as additional advice to work from home and reduce social contacts meant the sector has taken another hit as people adhere to the advice.”
“As ever, the sector is understanding of the worsening public health situation, but it shouldn’t be forgotten that there are workers, families, and businesses affected by the reintroduction of these restrictions.
“Therefore, it is important that the government supports the sector, and the broader economy, by delaying its scheduled tapering to the Employee Wage Subsidy Scheme until the new year.”
The Restaurants Association of Ireland described the cuts as a monumental blow to the sector at a critical time for businesses in the lead up to Christmas.
Its Chief Executive Adrian Cummins said a combination of messaging from Government regarding reducing social contacts and now a cut to the EWSS will cause untold economic damage to a currently financially distressed sector.
Last week the Government’s Economic Recovery Committee discussed the issue of pandemic supports but took no decisions on whether to extend them or not.
A Government source said the tourism and hospitality forum would be invited to meet with Tánaiste Leo Varadkar and Minister for Tourism Catherine Martin on Monday.
The source said the ministers would listen to their concerns and is already deeply aware of the cancellations and changes in business those in the sectors have faced.
They added that the whole of Government is keeping a close eye on the situation and assessing if more supports are necessary.