Donohoe suggests companies should repay Covid subsidies ‘if not needed’

The Minister for Finance, Paschal Donohoe, has suggested that some companies that claimed taxpayer-funded wage subsidies from the State's flagship €5.7 billion business support scheme should return the cash if they "didn't need it as much as they thought they did".

The minister was responding in the Dáil to a question from Labour TD, Ged Nash, who criticised the Government for not attaching more stringent conditions to the Employment Wage Subsidy Scheme (EWSS).

Mr Nash outlined details of a story in Wednesday’s Irish Times about a company – O’Flaherty Holdings, which distributes Mercedes Benz in Ireland – that claimed almost €1.8 million in wage subsidies last year and then paid a similar amount in a dividend to an offshore company.

The Labour TD said “the interests of the taxpayer had not been looked after” in that case, and he asked the minister if he would, as Mr Nash said he had repeatedly advised, tighten up the scheme to prevent issues such as qualifying companies paying dividends.

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Mr Donohoe said he believed the “vast majority” of companies that claimed EWSS payments needed them but he plans to “consider the issue that came to light today”.

He said some companies had chosen to pay back subsidies, and he wanted to “ask other companies” to consider doing the same.

Earlier on Wednesday, the Department of Finance said it will examine whether a change in the law is required to stop companies that receive taxpayer-funded Covid subsidies from paying dividends to shareholders.

The department confirmed it will consult with the minister and then look again at the legislation underpinning the EWSS to see if it is “necessary or appropriate to go further and legislate for further conditionality on the question of distribution of profits” at cash-rich companies that claim subsidies.

Fianna Fáil TD Jim O'Callaghan called for such companies to be banned from receiving further taxpayer supports.