The Pandemic Unemployment Payment will be extended for months, not weeks, the Dáil has been told.

Taoiseach Leo Varadkar said that nobody who was working full-time before the Covid-19 pandemic will see their payment cut, saying it will stay at €350 per week.

However, he said some of those who were working part-time will see their payment reduced.

He said their weekly payment "will still be more than they were earning" on a weekly basis before the pandemic.

Sinn Féin leader Mary Lou McDonald said the cut to the PUP has come as a huge blow, saying people need security and that they are now stressed and anxious about the future.

She said the mantra from Government throughout this crisis has been "we are all in this together", but the plan to cut the payment completely contradicts this message.

Ms McDonald said the emergency is still here and that the Government does not have a clue about the pressures of ordinary people at this time.

She asked the Taoiseach if he was suggesting cutting payments to hundreds of thousands of workers by 40% overnight and she wanted to know what will the proposal mean for people working less than 40 hours per week and what will happen for seasonal workers?

Responding, Mr Varadkar said: "You've got it wrong and by getting it wrong you have caused stress for people who are in receipt of the Pandemic Unemployment Payment today." 

He said he stands over the payment and told the Sinn Féin leader to contrast it to Northern Ireland where her party is in office, where the payment he said was only £100 per week.

Labour Party leader Alan Kelly said the decision is a slight on young people, claiming that they are being discriminated against.

The Tipperary TD said many of them would have moved into full-time work but could not due to the pandemic.

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The co-leader of the Social Democrats, Róisín Shortall, said that some people will lose income "substantially" under the changes.

She says there are many classes of workers and the system needs to be refined.

Ms Shortall said what was done initially was "absolutely right in terms of providing income support and providing support to businesses".

Meanwhile employers' group Ibec has urged the Government to only withdraw income supports gradually, or risk a wave of redundancies in companies still operating well below capacity.

This morning the Minister of State at the Department of Finance said no decision has been made on the future of the PUP.

Speaking on RTÉ's Today with Sarah McInerney, Patrick O'Donovan said the matter will be discussed by Cabinet later this week.

He said the scheme has always been pencilled for review in the middle of June and added that it is "a bit early" to speculate on how the Government will react because the CSO and Exchequer figures only came in yesterday.

However, he also said that the situation going forward is "simply not sustainable".

Sinn Féin's finance spokesperson Pearse Doherty said that while no one is arguing the PUP should be there indefinitely, he said "certainty needs to be provided to individuals" that their payment will be continued.

Speaking on the same programme, he said that if the payment is tapered it will lead to mortgage arrears and people wondering how they will put food on the table.

"It is simply not acceptable and not what is needed in the economy," the Donegal TD said.

He said no certainty has been provided by the Government on this and said sustaining these payments until the end of the year would play a major role in the recovery of our economy. 

Mr Doherty estimated that it would cost €4.1 billion to continue these payments until the end of the year.