Legislation that will see higher rates of Jobseeker’s Benefit for people with longer histories of PSRI contributions was signed into law by President Michael D. Higgins on Monday 15^th July.

The new rates have been welcomed by unions as a much-needed modernisation of the social welfare system.

Welcoming the new model ICTU general secretary Owen Reidy said, “For us, this is only the beginning of a shift toward a more European-style social insurance system. Pay-related family leave must be included in the next Programme for Government.”

Owen also strongly criticised the model to date, saying, "Ireland was one of only four EU27 members states, along with Greece, Malta and Poland, to pay the same flat-rate payment to unemployed workers (€232 a week), despite workers paying pay-related social insurance (PRSI) contributions when in employment.”

The new rates will see workers who have five or more years of PRSI contributions prior to becoming unemployed receive 60% of their previous salary, up to a maximum payment of €450 for the first three months.

In the following three months the rate will be reduced to 55%, up to a maximum payment of €375. The three months after will see a reduction to 50%, up to a maximum payment of €300.

Workers with 2 – 5 years PRSI contributions will be able to access 50% of their previous salary, up to a maximum payment of €300 for 6 months, after which they will be put on the standard Jobseekers rate of €232.

There will be no change to the duration of Jobseeker’s Benefit, which will continue to expire after nine months at which point applying for Jobseeker’s Allowance will be necessary to maintain payment.

New rates will not take effect until later this year when the necessary IT systems will been put in place.

While the new rates represent a drastic improvement, the rates remain low when compared to some of our European counterparts. The current rate of €232 represents just 25% of the average weekly wage or 47% of the full-time minimum wage. Pay-related unemployment benefits in Belgium replace 91% of a worker’s wage, while in Denmark a worker can expect 79% of their wages replaced, and 69% in the Netherlands.

PRSI Changes

The legislation includes PRSI rate changes which take effect between 2024-2028. The rates will be increased across all classes in increments throughout the four-year period.

The first increment of 0.1% will go into effect from 1^st October 2024, followed by another 0.1% from 1^st October 2025.  Rates will then gradually rise by another 0.2% up to October 2028.

The PRSI increases are intended to ensure the sustainability of the Social Insurance Fund while maintaining the State pension age at 66.

This plan did, however, draw criticism from Mr Reidy who said: “Unions recognise that social spending must be sustainable. However, the estimated €62 million yield from the 0.1% increase in PRSI contributions this year will be all but wiped out by the decision to simultaneously increase the cut-off point at which employers must pay a full PRSI contribution on behalf of their employees.“

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