A PROPOSED OVERHAUL of the jobseeker’s benefit could change the payment structure to make it directly proportional to the recipient’s previous earnings.

Under a draft proposal for a Pay-Related Benefit system published today, people who have been in insurable employment for at least five years, of which six months must have been in the previous 12 months, would receive 60% of their prior gross income up to a maximum payment of €450 per week.

People who have been in insurable employment for between two and less than five years, of which six months must have been in the previous 12 months, the benefit would be set at 50% of prior gross income subject to a maximum payment of €300 per week.

Others who were working “part-time or on a casual basis” would continue to be eligible for the existing jobseeker’s benefit.

The Journal first reported in February 2021 about the planned changes and the work that was getting underway in government to map out how the new mechanism —a significant change to the current social welfare system — might work.

Currently, recipients of the jobseeker’s benefit are categorised into one of four bands depending on their previous earnings – less than €150, between €150 and €219.99, between €220 and €299.99, or €300 or more.

The corresponding payment rates are €93.30, €134.20, €162.90 and €208, with some increases available if the recipient has a dependant child or adult.

The proposed new system would be directly proportional to the recipient’s previous individual earnings. A minimum and maximum weekly rate of €100 and €450 would be applied.

For example, a person in insurable employment for at least five years who had earned €149 a week would have a calculated rate of €89.40 but should receive the minimum rate of €100, whereas the payment under the current system would be €93.30.

Meanwhile, someone who was working for five years and earning €400 a week would receive €240 under the new system instead of €208.

The benefit would be payable for up to six months.

The proposal is not yet finalised and the government has opened a public consultation to invite feedback.

Minister for Social Protection Heather Humphreys described Ireland as an “outlier” in that “we are one of the only EU countries that doesn’t have a Pay-Related Benefit system”.

“Pay-Related Benefit is designed to protect people who have worked hard all their lives and paid their PRSI. The idea behind it is very simple – it is about softening the blow that workers, who have paid into the system, face when they suddenly lose their job,” Minister Humphreys said.

“Pay-Related Benefit works well across Europe and it can work in Ireland as well – we saw that clearly during the pandemic when a person’s unemployment payment was linked to their prior earnings,” she said.

“I believe the introduction of a Pay Related Benefit system could be one of the key legacies of the pandemic but it’s important that we get it right.”

The minister said that feedback on the draft proposals will be used to help shape the final design of the scheme.