Many staff are working “in slave conditions”, while waiting to serve out the five-year period before they claim citizenship. The Government has stated that it is cracking down on welfare fraud and claimed to have uncovered 900,000 fake claims totalling around half a billion euro in the last year.
Social Protection and Revenue investigations are under way into suspected welfare fraud by workers in ethnic restaurants who are receiving cash payments while claiming income support and other welfare payments.
Legitimate restaurateurs are understood to have complained after discovering they are being undercut by rivals who pay very low wages.
This allows staff, who have gained Irish citizenship after being here for five years, to avoid tax and make substantially more income through cash payments and welfare fraud.
While the low wages are declared to Revenue on the restaurants’ books, staff can claim income supplements and rent allowance and other supplements, they say.
Low wages are then topped up with tips and other non-declared cash earnings, allowing workers to earn more than staff working in legitimate restaurants who properly pay tax and PRSI.
The practice is said to be widespread and is threatening the restaurants who have been in business for decades and pay PAYE and PRSI.
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