The Minister for Finance, Public Expenditure and Reform has acknowledged there are anomalies in the Temporary Wage Subsidy Scheme (TWSS), whereby lower paid workers can be worse off in State-subsidised employment that on welfare.

Paschal Donohoe said the scheme was brought in at great speed, and had acknowledged that there would be anomalies due to the breadth of the intervention.

He said he was aware of the gap between the Pandemic Unemployment Payment (PUP) and somebody in receipt of the income subsidy scheme on a very low level of income, and was looking at the issue.

"Obviously there's a real value in maintaining a relationship with your employer, which is what the income subsidy scheme does allow to happen.

"But I do accept there are a number of groups at the moment and a number of companies and employees in particular parts of our economy for whom this gap is an issue," Mr Donohoe said.

He expressed the hope that the scheme will be in place for a "relatively" short period of time.

Sinn Féin TD Pearse Doherty had previously raised the issue of anomalies between the PUP of €350, and the fact that some workers on the TWSS receiving 70% of their normal wage are getting as little as €250. 

Last week, he called for a minimum payment of €350 to be introduced for workers covered by the TWSS, and said it was an insult to suggest that anyone receiving the PUP was profiteering. 

Under the TWSS, the State is prepared to subsidise an employer by paying up to 70% of the normal take-home pay of a worker provided the employer keeps the staff member on the books.

It is hoped that by maintaining the employment relationship between the worker and the employer, it will be easier to reboot the company, and kick start economic activity, when the health emergency ends.

The Government subsidy is up to €410 for workers earning under €38,000, €350 for workers on between €38,000 and €76,000, while workers above that threshold do not qualify for the scheme.

However, there have been reports that some low-wage workers are earning less while continuing to work than those who have been laid off and are receiving the flat €350 Covid-19 payment.

Some part-time workers who were laid off are also reported to be receiving the full €350 payment, leaving them better off than when they were working.

Earlier today, the Labour Party said the TWSS must be reformed to avoid "perverse" situations where lower paid workers are financially better off if they lose their jobs than being kept on by their employer.

Labour's spokesperson on employment affairs and social protection Ged Nash noted that many workers in the worst-affected sectors of non-grocery retail and hospitality were losing out by up to €100 per week if kept on by an employer with the wage subsidy, compared to someone who is laid off and receiving the Covid-19 PUP of €350 per week.

"Not only does this punish those low-wage workers but it also creates perverse incentivises that will inevitably lead to more and more people dropping-out of the labour market.

"This goes against the very rationale for establishing the TWSS in the first place  to maintain the link between workers and their employment."

Mr Nash called for a wage floor of €350 net pay beneath which no one should fall.

He said the crisis had shown the true worth of low-wage workers, including "frontline heroes" working as cleaners, stocking shelves and delivering food.

However, Mr Nash noted that "... this value has never been reflected in their pay, and ironically it remains the case throughout the Covid-19 crisis.

"When we emerge from this crisis, Labour will insist on a concerted national effort to once and for all address the scourge of low pay and insecure work through strengthened collective bargaining laws, the type of which is the norm across decent democracies and a Living Wage for all," he pledged.