LAST UPDATE | 21 Nov 2023
HIKES TO PRSI are on the cards after Cabinet gave approval to major changes to social welfare and employment benefits today.
There will be incremental increases in all classes of the Pay Related Social Insurance tax – employer, employee and self-employed – over the coming years.
These increases are intended to support the retention of the State Pension Age at 66.
It will mean that PRSI will increase by 0.1 percentage points for the next two years, followed by a 0.15 percentage point increase in 2026 and 2027. There will then be a 0.2 percentage point increase in 2028.
Significant reforms to the country’s unemployed benefit scheme has also been granted Cabinet approval, paving the way for the creation of a sliding scale system designed to “soften” the financial loss that workers face when they suddenly lose their job.
The aim of the new pay-related Jobseeker’s Benefit scheme is to “cushion” the income drop people experience when they become unemployed.
The plan, which has been well flagged in the last two years, will see unemployed people get a benefit of 60% of their salary to a maximum payment per week of €450 for the first three months after losing their job, €375 for the next three months and €300 for the final three months.
At present, somebody who loses their job after working 20 years receives the basic Jobseekers payment of €220.
Social Protection Minister Heather Humphreys, who brought the new pay related benefit system in a memo to Cabinet today, has previously made the point that Ireland is one of the few countries across the European Union that don’t have a system in place that gives a degree of support that relates to what a person’s income was when they lose their job.
Alongside the welfare reform, Cabinet was also examining proposals on a bypass for Co Limerick, extending the voting franchise for electing University members to Seanad Éireann and a repeal of archaic censorship laws.
Commenting on the social protection proposal, Humphreys said:
“Under these major reforms, people who have a long work history and who have contributed to the system via their PRSI will receive enhance benefits if they find themselves in that awful situation of losing their job.
“This new system represents an enhanced safety net for workers and will help to soften the cliff-edge drop in income that can be faced when a person suddenly loses their job.”
The Fine Gael TD added: “After securing Cabinet approval today, I have now asked my officials to draft the necessary legislation that will see Pay-Related Benefit introduced in the second half of 2024,” the minister said.
Responding to Cabinet’s approval for the new scheme, the Irish Congress of Trade Unions (ICTU) general secretary Owen Reidy said it strongly supports moving from the flat-rate.
“For too long full-time workers have been left to endure a sharp fall in income and living standards after losing their job. The devastation from the recent lay-off of the 650-strong workforce in Tara Mines in County Meath is a pertinent case in point,” he said.
“Ireland is one of only four EU27 member states, along with Greece, Malta, and Poland, to pay the same low flat rate benefits to all unemployed workers (€220 a week), despite workers paying pay-related social insurance contributions when in employment.
“Across the rest of the EU, contributory social welfare benefits are pay-related – the weekly payment is a percentage of a worker’s previous wage – to allow workers to continue to pay their mortgage and other bills so as to maintain their normal living standards in the short-term while looking for a new job that matches their skills.”
Social welfare measures
Humphreys also brought forward a memo to Cabinet on the Social Welfare Bill, which will give effect to a number of measures that she secured as part of Budget 2024.
These are understood to include a €12 increase in weekly payments from January 1st, supporting the likes of pensioners, carers and people with disabilities, and a €10 increase in the Domiciliary Care Allowance, which is paid to families of sick children.
This will bring the rate up to €340 per month.
The memo is also believed to increase the income thresholds for the Working Family Payment by €54 per week, regardless of family size, and extend Parent’s Benefit from seven weeks to nine weeks from next August.
An extension of Child Benefit is also in store for 18 year-olds in full time education from September next year.
Included in this will be changes designed to ensure that long-term carers can access a state pension for the first time.
Censorship laws
Elsewhere at Cabinet today, Justice Minister Helen McEntee sought the repeal of archaic censorship laws.
The Censorship of Publications Acts originally arose from a recommendation made by the Committee on Evil Literature, which had been appointed in 1926 by the Free State.
The Censorship of Publications Board became operational in 1930 and over its lifetime has prohibited over 12,000 publications.
A repeal of the laws is likely due to a feeling among government politicians that the Censorship Board is no longer appropriate in the present day, given the dramatic shift in social policy and societal values in Ireland in recent decades.
The law at is stands allows for the censorship and prohibition of books and ‘periodicals’, or magazines, journals and newspapers, that are considered indecent or obscene, or have an unduly large proportion of space devoted to crime. It does not apply to online material.
Several significant amendments have already been made to the Censorship of Publications Acts, including changes to allow the publication of information on contraception, abortion and divorce.
The ‘Register of Prohibited Publications’ details the prohibition orders in force on books and periodical publications.
However, the Censorship Board and Appeal Board have seen significantly reduced volumes of complaints and appeals over the past 20 years.
It is understood that repeal would be done on the basis that there are other sufficiently robust statutory provisions in place to deal with the circulation, possession and publication of threatening and abusive material.
This includes the Online Safety and Media Regulation Act 2022.
It will also not impact on the prosecution of offences for possession or publication of child abuse material or for circulating threatening material.
Additional reporting by Eoghan Dalton
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