Vast majority on PUP would be financially better off at work – ESRI
Younger people are more likely to suffer from financial hardship when Covid-19 State supports are ceased, according to new research published by the Economic and Social Research Institute (ESRI).
In its latest publication, the ESRI also said that the estimated average income loss for households was more than halved as a result of pandemic payments.
The report also stated that not all those with weak financial incentives to work will opt for unemployment or inactivity, and that the vast majority of PUP recipients (over 95%) would be financially better off in employment.
Students will not be entitled to pre-existing unemployment supports following the withdrawal of the Pandemic Unemployment Payment and the Employment Wage Subsidy Scheme later this year, it said.
In April, 34% of PUP recipients aged under 25 were registered as full-time students, and therefore ineligible for State benefits such as the Jobseeker’s Allowance.
Young adults who are not in education are eligible for a Jobseeker’s Allowance rate that is 45% lower than other groups.
The ESRI is recommending that supports be put in place to counteract the sharp decrease in young people’s income once the schemes are withdrawn.
Researchers found that the estimated average income loss as a result of the pandemic was more than halved, to 3% as a result of the State supports.
Dora Tuda, an author on the report and a Postdoctoral Research Fellow at the ESRI, said: “This study shows the extent to which the social welfare system, including the introduction of the PUP and wage subsidies, supported the incomes of those whose employment was affected by the pandemic.
“This research estimates that the PUP and EWSS halved the magnitude of household income losses,” she said.
“While concerns have been raised that PUP disincentivises employment, the vast majority of PUP recipients would be financially better off in employment,” she added.