New enhanced unemployment benefit rules passed

Planned new laws aimed at ensuring enhanced benefits for those with a strong work history who become unemployed have passed through the Oireachtas.

Under the new rules, the weekly rate of payment for people who have at least five years paid PRSI contributions will be set at 60% of previous earnings, subject to a maximum of €450 for the first 3 months.

After that, the rate will reduce to 55% of earnings, subject to a maximum of €375 for the following three months.

A further three months will be paid at the rate of 50%, up to a maximum €300 payment.

For those who have between two and five years of paid contributions, the rate will be set at 50% of previous earnings subject to a maximum for €300 per week and six month’s duration.

The benefit will be available to new, fully unemployed people who have a strong and recent attachment to the labour market, and who are available for and genuinely seeking employment.

“At the moment, when a person who has worked hard for twenty years suddenly loses their job, they receive the same rate of unemployment payment as somebody who might never have worked. That’s not fair,” said Minister for Social Protection, Heather Humphreys.

“We need to reward the people who have worked hard; paid their dues; and contributed to the economy through their PRSI contributions. That’s what Pay Related Benefit is about.”

“This is about supporting workers who lose their employment by ensuring they don’t suffer a cliff-edge drop in income.”

The Social Welfare (Miscellaneous Provisions) Bill 2024 will now go to the President for signing.

It is hoped the new scheme will begin later this year when necessary IT systems are in place.

The progress has been welcomed by the Irish Congress of Trade Unions, which said for too long workers have been left to endure a collapse in income and living standards after losing their job.

“The financial fallout for families and a local economy was brought into sharp focus this time last year when the 650-strong workforce in Tara Mines were laid off,” said its general secretary, Owen Reidy.

“Ireland is 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.

“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 continue to pay their mortgage and other bills so as to secure their normal living standards in the short-term while looking for a new job.”

The development will bring Ireland in line with other European countries where similar arrangements are in place.

Also contained in the bill is provision for PRSI rate changes from 2024 to 2028, as previously agreed by the Government.

This will see incremental increases in all classes of PRSI over the coming years, to address long-term sustainability challenges facing the Social Insurance Fund and to help fund the retention of the State pension at age 66.

Under the changes, all classes of PRSI will increase by 0.1 percentage point from 1st October 2024, followed by a further 0.1 percentage point in October 2025, gradually rising to 0.2 percentage points in October 2028.