Almost 477,700 people are set to receive the Pandemic Unemployment Payment this week - a decrease of 3,666 over the last week, according to the Department of Social Protection.
Meanwhile the numbers claiming the Covid-19 Enhanced Illness Benefit fell by 34% over the last week - from 7,149 to 4,707 - reflecting the drop in overall recorded cases as Level 5 restrictions have taken effect.
The 477,665 figure for PUP claims does not include a further 188,543 people who were recorded on the Live Register at the end of January.
In total, over 666,000 workers are currently entirely reliant on the State for income support.
This week's PUP payments will cost €143.3 million.
Minister for Social Protection Heather Humphreys noted that this week's figures reflected the first reduction in the number of people receiving the PUP since Level 5 restrictions were introduced in late December.
"This is a positive development and shows that the rate of applications for the PUP has levelled off," the minister said.
She added that the majority of counties had fewer people on PUP this week, with most sectors also seeing a drop.
She welcomed the fact that over 10,000 people had closed their claims to return to work, saying it was encouraging for businesses and the economy.
However, she cautioned against breaching public health guidelines to return to work, saying: "I cannot stress strongly enough that people should only be returning to work outside of their own home where it is absolutely essential."
She also reminded the public about means-assessed financial supports - including assistance with heating costs and rent supplement - which are available to those in need during these difficult times.
The minister also welcomed the 34% drop in the number of people claiming the Covid-19 Enhanced Illness Benefit.
She described the reduction as "encouraging", saying it reflected that the efforts people were making to adhere to Level 5 restrictions were paying dividends.
Construction saw the largest weekly drop in PUP claims, with 705 fewer people receiving the payment.
The decrease in the Wholesale/Retail sector was 679, with a reduction of 520 in Manufacturing.
All sectors except Electrical/Gas/Water supply sector will have fewer people receiving PUP this week.
The department said this reflects the number of people who have closed their claims in recent weeks to return to work.
The sectors with the highest number of PUP claims this week are Accommodation and Food Service activities (111,280) followed by Wholesale and Retail Trade (75,927) and Construction (62,197).
The counties with the highest numbers of PUP claims are Dublin (148,879) followed by Cork (48,658) and Galway (25,496).
The top three sectors with the largest number of employees closing their Pandemic Unemployment Payment to return to work are Construction (2,167), Wholesale and Retail Trade (1,785), and Manufacturing (1,308).
Dublin had the greatest number of people closing their claims to return to work (2,526), followed by Cork (1,047) and Kildare (510).
Around half of claimants are receiving the maximum benefit rate of €350 per week.