High-income workers who lose their jobs would be eligible for welfare at more than double the normal rate under proposals to radically overhaul the pay of jobseekers.
Workers with an employment history will be entitled to social assistance rates of up to €450 under the schemes.
Social Welfare Minister Heather Humphreys is due to present a note to cabinet tomorrow setting out plans to introduce unemployment benefit payments which will be directly linked to a worker’s wages before becoming unemployed.
As part of the major restructuring of the welfare system, a worker with five or more years of PRSI contributions will be entitled to 60% of the gross weekly wage up to a maximum of 450 euros per week.
A worker with a PRSI contribution of between two and five years will be entitled to 50% of the gross weekly wage or up to €300 per week.
An employee must have paid PRSI contributions in six of the 12 months before becoming unemployed to qualify for the higher rates of job search payments.
Those who have been contributing to the PRSI for less than two years will apply the current rate of 208 euros per week. However, it is set to rise to €220 a week in January following a large increase in welfare rates in the September budget.
Under the plan, the higher rates would be paid for just six months before being gradually reduced to normal jobseeker pay.
A government source said: “This is about supporting workers. This is all about ensuring people who have worked for a long period do not suffer a cliff-edge drop in their income. PRSI should be what it says on the tin – Pay-Related Social Insurance,” reports Independent.
The pay-as-you-go benefits approach is intended to ensure that workers who have made financial commitments based on their wages do not face significant debt in the event of job loss.
Minister Humphreys is very much in favor of the proposal she is presenting to cabinet, but she will submit the idea to public consultation and seek employee and employer views before drafting the legislation.
Ms Humphreys has made her program one of her main policy objectives since she was appointed Minister for Social Welfare.
The Covid-19 pandemic laid the groundwork for the government’s pay-linked unemployment benefits scheme which introduced five different Pandemic Unemployment Benefit (PUP) rates for workers who lost their jobs due to distancing restrictions social.
Similar schemes are currently in place in Germany and Estonia, where workers receive staggered social security payments based on their wages.
Speaking in Cavan on Friday, Ms Humphreys said she wanted to introduce the new pay-linked welfare system before the next general election.
It’s something that I’m very committed to, because we don’t want to see people when they’ve been working all their lives suddenly get the bad news they’re going to lose their jobs and then there’s a huge cliff-edge drop in their income,” she said, reports Independent.
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