Minister Humphreys publishes draft proposals on a new Pay-Related Benefit for Ireland

proposal represents a major reform of Ireland’s Welfare System for jobseekers
Pay-Related Benefit is the norm in EU Countries
system designed to cushion workers from sudden ‘cliff-edge’ income shock
Minister launches public consultation to get views and feedback on ‘strawman proposal’

The Minister for Social Protection, Heather Humphreys, has today published draft proposals for the introduction of a new pay-related jobseeker benefit payment.

Pay-Related Benefit is the norm in European countries and links a person’s jobseeker’s payment to their previous earnings and work history.

It is designed to soften the income shock that a worker may face if they suddenly lose their job.

The draft proposals for the introduction of Pay-Related Benefit System are contained in a ‘Strawman’ published by Minister Humphreys today.

The ‘Strawman’ paper, which will now go out for public consultation, proposes:

for people who have been in insurable employment for at least five years, of which six months must have been in the previous 12 months, the benefit would be set at 60% of prior gross income up to a maximum payment of €450 per week
for 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
the benefit would be payable for up to six months

As part of the public consultation process, submissions are being invited from all interested stakeholders, including employees, jobseekers, representative organisations, and employers by 28 February 2023.

Today’s approach reflects a commitment in the Programme for Government, 'Our Shared Future', to consider the introduction of a pay-related jobseeker’s benefit.

The Strawman document published today sets out the broad parameters of one potential approach in designing such a scheme.

It is not a final design, and its purpose is to focus minds and frame constructive discussions and feedback through a national public consultation process with stakeholders. The design of any proposal brought to Government may differ significantly from that set out in the Strawman consultation paper.

While the Strawman primarily focuses on jobseekers supports, feedback received as part of the public consultation will also help to inform the consideration of potential changes to other short-term income supports for workers who have to temporarily cease work such as Maternity Benefit, Parental Leave Benefit and Illness Benefit.

Publishing the draft proposals today, Minister Humphreys commented:

“Ireland is 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.

“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.

“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. That’s why I am inviting people today to give their views on these draft proposals. The feedback received during this consultation process will help to shape the choices around the final design.

“I look forward to getting a range of views from across society as part of this consultation and I encourage all stakeholders to submit their views.”

Notes

The Pay Related Jobseekers Strawman document can be accessed at www.gov.ie/PRBConsultation.

Responses to the submission are requested by 28 February 2023 and should be forwarded by email to: PRB@welfare.ie

Details of the dates and venues of workshops hosted by the Department of Social Protection will be posted to the department’s website in due course.

The Strawman sets out the broad parameters of one potential approach in designing a Pay-Related Benefit scheme. The final design will be considered following the consultation process.

The Strawman invites stakeholders to provide feedback on PRSI increases to cover any additional costs associated with a Pay Related Benefit for Jobseekers.

The key features of the proposal set out in the Strawman include:

The Benefit would be paid to employees who:

are under State pension age (66) who are fully unemployed
have a demonstrated strong, recent attachment to the labour force, and
are available for and genuinely seeking paid employment

The Rate of Benefit would be set as follows:

for people who have at least five years paid Pay Related Social Insurance (PRSI) contributions (of which six months must have been in the 12 months prior to their claim), the rate would be set at 60% of the person’s prior gross income subject to a cap of €450 per week
for people who have less than five years prior PRSI contributions but at least two years (of which six months must have been in the 12 months prior to their claim), the rate would be set at 50% of the person’s prior gross income subject to a cap of €300 per week
a minimum rate of €100 would apply
payment would be payable for up to a maximum six months

People working part-time or on a casual basis would continue to be eligible for the Jobseeker’s Benefit scheme. Over time the existing Jobseeker’s Benefit scheme may be adapted and/or a new income tested Working Age Payment model may be introduced whereby payments could be linked each week to a person’s employment earnings (similar to the existing Working Family Payment).

Self-employed people would continue to be catered for under the current Jobseeker’s Benefit (Self-Employed) Scheme.

Minister Humphreys publishes draft proposals on a new Pay-Related Benefit for Ireland

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